Barclays survey of inflation expectations - 'Basix.'(includes related chronology of events in the UK in 2nd qtr 1996)

Article Abstract:

Expectations of inflation in the UK appear to have changed little in Jun 1996, according to a survey by Barclays. The general public, labor unions, and academic economics have reduced their forecasts for inflation for the year from Jun 1996 compared with their forecasts for Mar 1996. Finance directors and investment analysts have not changed their forecasts, while business economists have revised their forecasts upwards. The retail price index dropped to 2.4% for April 1996 yet the general public foresees inflation of 3.8% for the year from Jun 1996.

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Inflated expectations

Article Abstract:

UK inflation expectations show a view that inflation is expected to rise in the year from Mar 1995. This is true for the general public, with a forecast of 4.3%, while finance directors foresee 3.5% and academic economists foresee 3.4%. The specialist groups foresee a rise to 4.1% for two years from Mar 1995. These forecasts represent an upward revision compared with forecasts made in Sep 1994. Inflation expectations do not appear to have been affected by the UK government's precautionary increase in interest rates.

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UK economy

Article Abstract:

The UK economy has seen stagnant manufacturing output in 1st qtr 1996 as export markets in Europe have been weak, but the service sector has performed well. Earnings growth should be above inflation in 1996 which will help retail sales. Economic growth is likely to be boosted by investment and could reach above trend levels for 2nd half 1996. The medium-term prospects for the economy appear favorable as inflation is subdued and growth is solid.

Manufacturing industry, Manufacturing industries, Gross domestic product, Services industry, Service industries

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