United Kingdom

Article Abstract:

The UK economy should grow by 3.3% during 1997, and by 1.9% in 1998. The strength of sterling will lead to the fall in growth, but strong domestic demand, boosted by windfall payments from building societies to consumers, will cushion the effects of falling exports on the UK economy. Trends indicate that consumer spending will grow by 4.5% in 1997, and by 3.6% in 1998. The government plans tight controls over public spending, and the PSBR should drop to 10 billion pounds sterling in 1997. The underlying inflation rate should be 2% by the fourth quarter of 1997, and average 2.2% in 1998.

Exchange Rates

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Europe

Article Abstract:

Growth in the European countries continued its 1996 decline and stagnation to stand at 1.3% in the first quarter of 1997, but export activity should lead to stronger growth in the remaining portion of 1997 and in 1998. Inflationary pressure is low, with the harmonized European figure sinking to 1.5% in May 1997. This trend should continue through 1997, which will allow interest rates to stay low. Major European countries are unlikely to achieve the Maastricht target of 3% budget deficits during 1997. A more detailed scrutiny of the French, Italian and German economies is presented.

Italy, Europe, Germany, France

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UK forecast in detail

Article Abstract:

UK government spending is rising a little more slowly than anticipated, with total central government cash outlays in the first eight months of the financial year 1999 to 2000 only 4% higher than the year-earlier period, compared with the Budget prediction of a rise of 4.3% for the whole of 1999 to 2000. The Treasury has revised its forecast of public sector net borrowing to a surplus of 2.1 billion pounds sterling. Consumers are now less cautious about borrowing, but are still extremely price-sensitive.

Personal Consumption Expend, Forecasts and trends, Consumption (Economics), Expenditures, Public, Public expenditures

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