Friday, Jun 29, 2007
UK economic strength add weight to rate rise
BBC News: UK economy still growing strongly
The strong growth will reinforce expectations of a rate rise next week.
The Treasury has estimated that the long-term sustainable growth rate of the UK economy is about 2.5%.
Speaking to the Treasury Select Committee on Thursday, Bank of England governor Mervyn King said that inflationary risks were "still on the upside" despite "tentative signals" of slowing consumer spending.
The Bank of England has raised interest rates four times in the past year to 5.5%, but some analysts expect rates to reach 6% by the end of the year.
Posted by lukeskywalker @ 11:07 AM (203 views) Add Comment
5 Comments
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1. royston said...
Of course the economy is still growing. The average Brit is liquidating everything they can get their hands on in order to consume (dress / decorate their houses) like Chavs. In such circumstances, businesses flourish and consumers / wage-earners flounder.
2. dohousescrashinthewoods said...
I think there's something quite profound in that Royston.
3. sold 2 rent 1 said...
"the long-term sustainable growth rate of the UK economy is about 2.5%."
This is only possible if we keep long-term debt growth rates at 10%, which is clearly not sustainable.
The above statement is fundamentally flawed
4. sold 2 rent 1 said...
Good graph of US debt and growth
http://www.thelongwaveanalyst.ca/downloads/American_Dept.doc
The UK is similar
5. Ash4781 said...
IMO recent troubles at HMV and Flopp show that people are starting to seriously look at what they are spending. Still come Christmas ships' full to the brim with fresh tat will be unloaded.