The Bank of England’s Inflation Report and outlook for the British economy dominates this week’s news. The Bank’s Governor, Sir Mervyn King, commenting on the deteriorating position regarding inflation said, “We face the rather unappealing combination of a subdued recovery, with inflation remaining above target for a while.” Talking about the prospects for economic recovery King added, “we may be in for a period of persistently low growth.”
The downbeat message coming from the Bank of England sounds like a late autumn UK weather forecast. As if to underline the gloom, in the short term the Governor warned that there was a good chance that the economy would contract again in the fourth quarter as the temporary boost from the Olympics disappeared. (At least there is Christmas to look forward to!)
So unsurprisingly in Friday Brief this week we lead on the Bank of England’s Inflation Report and the prospects for GDP growth. Developments in the world economy and particularly in the Eurozone will have the biggest influence on future prospects. Overall the message is disappointing with growth rates likely to be below the historical average rate of around +2.5% for the next couple of years.
We include the latest figures from Europe which support this disappointing outlook. GDP in the Eurozone for the 3rd Quarter showed -0.1% fall, while the latest industrial data from Eurostat shows a fall in total output for the Eurozone of minus 2.5% (compared to August).
On a more positive note, the MTA is calling for entries to its Annual Manufacturing Awards. This is a chance for the sector to celebrate the best achievements over the past year and show that innovation thrives in UK engineering based manufacturing. Entries though must be received by 11 January.
Have a good weekend.