Bank of England cautious on UK economy
The Bank of England has revised various forecasts regarding the UK economy amid concerns that the exit from recession will be slower and longer than expected. While the Bank of England last week suspended the quantitative easing program, the bank's governor Mervyn King has today suggested that the program may return and it is too soon to end the program completely. So where does this leave the UK economy?
On the plus side the Bank of England believes that the inflation rate in the UK will fall below the 2% target and indeed should settle at around 1.2% for the next two years. This is welcome news as UK inflation has spiked higher recently with concerns that UK base rates will have to rise in the short to medium term to combat this. However it is the reduction in growth forecast for the UK economy which is most alarming with the Bank of England now settling for a 3.2% increase in GDP by 2011 against a 4% forecast released in November 2009.
There is also concern for consumer spending with many families still needing to rein in their spending to suit the new economic climate. However, it is the significant reduction in forecast growth in the UK economy which is most alarming.
Share this..
Related stories
Riots add to woes in Greece
The Greek authorities are coming under more pressure as the announcement of wage cuts in the public sector sparks a number of riots across the country. This is the latest stage in what is certain to be short-term pain for medium to long term gain but this is no good for those caught up in the Greek budget deficit issue. Despite coming out fighting last week and complaining about the speed at wh...
Read MoreProperty company Minerva in trouble
It has been revealed that UK property company Minerva has fallen into "negative equity" in a reflection of what is still a very difficult UK property market. The current share price is just over 30p although the net asset value of the company has fallen from a positive 187.7p last year to a rarely seen liability of 28.8p per share as at 30 June. So what does the future hold for Minerva?
RDR – Will you pay for Financial Advice?
On the 31st December 2012 changes made to advice standards under the Retail Distribution Review (RDR) will mean that Independent Financial Advisors (IFA’s) are no longer able to claim commission on leads they generate for companies while offering financial advice to consumers. What this means for consumers is that free financial advice will no longer be available through IFA’s in most situa...
Read MoreIs it time to stop throwing good money after bad?
As the reality of the $1.1 trillion G20 funded rescue package hits home today many people are starting to question whether it is time to stop throwing good money after bad. The UK economy has received literally billions upon billions of pounds of taxpayer's money and despite all the fanfare of the $1.1 trillion G20 package we have seen no return on the significant investment so far in the UK econo...
Read MoreLast ditch bid to avert postal strike
Unions and Royal Mail management are today in talks regarding planned strikes which will literally cripple the UK postal system. These last-ditch talks have been scheduled as we approached the first official strike date after which point many people believe it would be difficult for both parties to get around the negotiating table. Is there hope for the immediate future?
The very fa...