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Has the latest UK budget postponed any UK base rate rise?

Many analysts believe that UK base rates, currently held at 0.5%, are unlikely to increase until at least the second quarter of 2011 after the recent budget and the perceived impact this will have on economic growth. Over the last few days we have seen figures released from the UK government in relation to potential job losses in the public sector and a massive argument has ensued between the Conservative/Liberal coalition government and the Labour Party.

Prior to the emergency budget announced by George Osborne, the vast majority of analysts had expected a UK base rate rise in the first quarter of 2011 but slowly and surely this date is being pushed further and further back. If we see a weakness in the UK economy in the latter part of 2010 and the early part of 2011 this could yet again postpone any future UK base rate rise. There is certainly a feeling of doom and gloom amongst UK analysts at the moment and the revelation earlier this week that figures released by the Office for National Statistics may be "unreliable" has sent shockwaves through the analytical arena.

If we are unable to trust the figures provided by a UK government office then what basis can we use to forecast future economic activity?

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