Industry woes

Article Abstract:

There are signs of a slowdown in the British economy, such as a risein undemployment from Nov 1999 to Jan 2000, a drop in manufacturing output, and slower growth in lending by banks and building societies. Inventories have risen, and higher interest rates and petroleum prices could mean slower growth. Interest rates may be raised again in April 2000. There is concern about accelerating wage inflation, and about rising service sector inflation, while an easing of fiscal policy is likely to boost demand, leading to further interest rate rises.

Economic indicators

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UK economy: policy dilemmas

Article Abstract:

UK inflation prospects for 1997 appear favorable, according to Goldman Sachs, but there could be problems over the longer term. A strong pound sterling has helped keep inflation low, but tighter labor markets and rising house prices and earnings could push up inflation. The balance of payments could also be affected by the high value of the pound. A strong pound could mean that interest rates cannot be raised enough to control consumer spending, though a drop in the value of the US dollar could help lower the value of the pound.

Administration of General Economic Programs, Currency Stabilization Programs, Currency stabilization

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UK economy: rates up

Article Abstract:

UK interest rates could rise, according to Goldman Sachs, though undelying inflation may still fall. The rise in the value of pound sterling is likely to depress inflation, but the pound is linked to the US dollar and if this falls then the pound is also likely to fall.The result could be a drop in the value of 10% by spring 1998. Initially inflation is likely to drop and the pound will remain strong, but this could change by fall 1997 and monetary tightening is likely to occur following the fall.

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