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Bank Of England Warns Uk Recovery Will Be Weaker Than Hoped

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http://www.telegraph.co.uk/finance/economics/7938287/Bank-of-England-warns-UK-recovery-will-be-weaker-than-hoped.html

Britain faces a weaker economic recovery and higher inflation for longer than previously hoped, the Bank of England forecast today.

Economic expansion will peak at 3pc next year, weaker than the 3.6pc the Bank was expecting just three months ago. Today's Inflation Report also forecast that inflation will remain above the Bank's 2pc target for much of next year.

Mervyn King, the Bank's Governor, said at a press conference that while "the UK recovery is likely to continue, the overall outlook is weaker," than at the last forecast in the spring. Today's forecasts reflect the wider threat of simultaneous slowdown in Europe and the US, Britain's two biggest trading partners, as well as the austerity measures announced in the Coalition government Budget.

The twin predictions underline the dilemma facing the Bank's Monetary Policy Committee (MPC) over the future course of interest rates. There is already an emerging split on the MPC over whether the real fight now is against inflation - which has remained above the bank's target for much of the last two years, or shoring up a recovery that's losing steam.

Sterling, which has enjoyed a strong run since the General Election, tumbled almost two cents to $1.5680 within minutes of the Report's release, as traders digested the prospect that interest rates are likely to remain low. The FTSE 100 was down 1.7pc.

While the Bank expects inflation to be higher than 2pc for much of next year, it's predicting that will ease in 2012.

Inflation "has been pushed down further ahead in response to a rather weaker outlook for GDP growth, itself partly reflecting the additional fiscal squeeze announced in the emergency budget," said Jonathan Loynes of Capital Economics. "There is further support here for our long-held view that interest rates are going nowhere for a long time."

Experts have warned that if inflation remains stubbornly above the 3pc level - it stood at 3.2pc in June - pressure will only grow on the MPC's nine members to raise interest rates, or risk losing the confidence of financial markets.

Mr King hit back at those critics today, saying that inflation is not "in some sense out of control or permanently above target."

Despite the Bank's official forecasts pointing to an acceleration in growth next year, Mr King has taken every public opportunity since the financial crisis to make clear a recovery will be long and slow.

The Bank's decision to keep interest rates at a record low of 0.5pc for the last 18 months has been credited with limiting the scale of repossessions and encouraging what business lending from banks there has been.

What a plonker...

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Mr King hit back at those critics today, saying that inflation is not "in some sense out of control or permanently above target."

Outright lie.

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The UK will face more darkness and lower temperatures as winter approaches Concrete Jungle forecast today.

Less daylight and colder temperatures will peak at 3pc next year, weaker than the 3.6pc that Concrete Jungle was expecting just three months ago. Today's daylight and colder temperatures report also forecast that daylight and colder temperatures will remain above the 2pc target for much of the winter.

Concrete Jungle, the Governor, said at a press conference that while "the UK daylight and temperatures are likely to continue decreasing, the overall outlook is weaker," than at the last forecast in the spring. Today's forecasts reflect the wider threat of simultaneous slowdown in Europe and the US, Britain's two biggest trading partners, as well as the austerity measures announced in the Coalition government Budget.

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Govt. announces plans to extend summer through to the following spring.

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Mr King hit back at those critics today, saying that inflation is not "in some sense out of control or permanently above target."

Outright lie.

Surely the whole point of monetary policy is to stop inflation getting out of control by ... er I don't know ... acting to restrict supply.

Once it is 'out of control' it is by definition too late.

bank of england.pdf

bank of england.pdf

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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