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Economy To Grow This Year, Says Mpc Man

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http://www.thisismoney.co.uk/news/article....e_id=2&ct=5

Economy to grow this year, says MPC man

Sam Fleming, Daily Mail

17 August 2009, 7:17am

Britain's battered economy should start growing again this year, according to a Bank of England policymaker.

Dr Andrew Sentance, a member of the Bank's interest rate-setting monetary policy committee, said: 'I expect to see a return to growth in the second half of this year.

'However, there are two big uncertainties over how quickly Britain will recover. The first is the extent to which constraints on bank lending will hold back spending and business activity. The second is the momentum of recovery across the global economy.'

Dr Sentance said the stock market has risen strongly since March, the housing market 'appears to be turning', and consumer and business confidence have 'recovered significantly'.

Historically low interest rates of 0.5%, a competitive exchange rate, government tax and spending measures, the Bank of England's quantitative easing programme, which has flooded the economy with cash, and an improved global economy have all played a part in boosting the UK economy, he said.

However, analysis from Citigroup today gave a more pessimistic forecast, claiming economic activity in Britain will not recover to previous levels until 2012.

The havoc wrought by the credit crunch, coupled with increases in unemployment, will ensure it takes much longer for the UK to rebound than after previous slumps.

Citi said that it took three to three-and-a-half years for gross domestic product to return to previous levels after the past three large recessions. But the investment bank predicts it will take between four and five years to return to 2008 activity levels.

The predictions come after the Bank of England said the country was on the cusp of a recovery, but that it would be 'slow and protracted'.

Citi's gloomy forecast is a stark reflection that this is no ordinary recession, as Britain's banks, households and government are all struggling to pay off historic debt burdens. A lack of credit will be a particularly damaging drag on any recovery, said Citigroup economist Michael Saunders.

With businesses struggling financially, investment could fall by around 18% this year, the largest drop in the last 100 years, and won't return to 2007 levels until 2013, he predicted.

The forecasts come ahead of inflation numbers due tomorrow. These are expected to show that consumer prices are still rising 1.5% a year, well ahead of July readings for the euro zone and the US, which are both in deflation.

While things are not looking good on this side of the Atlantic, data due out this week is likely to show that a US economic recovery is within reach.

Analysts believe figures from the US Commerce Department will show builders broke ground on new homes in July at the fastest pace in eight months.

Other figures are likely to show sales of existing homes climbed, manufacturing in the Northeast of America strengthened and the economic outlook has improved.

GDPchanges_450x270.jpg

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GDP will rise? No shit Sherlock.

GDP= private consumption + gross investment + government spending + (exports - imports)

The bit in red has been pumped up by QE to replace the bit in blue.

What happens when the QE stops?

Edited by MOP

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CLOSING DOWN

!!Sale Must end March 2010!!

!!£220 Billion in debt must be sold!!

Brewster

We must be crazy , but be quick this offer may end March 2010.

Six days after the Bank of England ramped up its so-called quantitative-easing program of debt purchases,

the U.S. Federal Reserve said it was winding down similar plans as it shifts focus from economic recovery to inflation control.

Don't have any cash?, we will buy your mortgages!!!

Apply now.

http://www.bloomberg.com/apps/news?pid=206...id=az6P8KRqBgcc

:P

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GDP will rise? No shit Sherlock.

GDP= private consumption + gross investment + government spending + (exports - imports)

The bit in red has been pumped up by QE to replace the bit in blue.

What happens when the QE stops?

We get to pimp our national treasures like Jordan to raise cash.

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yeah sure, GDP may well go positive this year (more likely next year). But will it last?? Find me a pundit who can credibly tie their shoelaces who says the recovery will not be weak and protracted (and feel like an ongoing recession). Then once you've found that rare pundit, slap him sharply round the face (using the back of the hand) and tell him not to be such a c**t.

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