UK 2Q GDP surpasses all expectations - Fastest Pace In 4 Years

Graham_Devon

No one can discount this as anything but good results.

What it doe's make me ponder is where this leaves interest rates, QE, all the stimulus kind of stuff.

Will QE still go ahead even though we now have decent growth?

Will the BOE still disregard inflation and keep rates at 0.5%?

StevieJ

Graham_Devon wrote: »

No one can discount this as anything but good results.

What it doe's make me ponder is where this leaves interest rates, QE, all the stimulus kind of stuff.

Will QE still go ahead even though we now have decent growth?

Will the BOE still disregard inflation and keep rates at 0.5%?

Yes because their policies are going to snuff out the growth.

chucky

Graham_Devon wrote: »

Will QE still go ahead even though we now have decent growth?

Will the BOE still disregard inflation and keep rates at 0.5%?

a bit of a contradiction there - you can't really have more QE and then increase rates

for the upteeeeenth time - interest rates are not the only way to tackle inflation

growth will probably be killed by current policy anyway

tomterm8

chucky wrote: »

a bit of a contradiction there - you can't really have more QE and then increase rates

for the upteeeeenth time - interest rates are not the only way to tackle inflation

Actually, I think there is still rumours of an operation twist type scenario, which is a form of QE... it shifts the yield curve around, by buying at one end of the yield curve, and selling at the other.

Graham_Devon

chucky wrote: »

a bit of a contradiction there - you can't really have more QE and then increase rates

for the upteeeeenth time - interest rates are not the only way to tackle inflation

growth will probably be killed by current policy anyway

It's two different questions, therefore, no contradiction.

Just wanted to clear that up before what I have said is confused. Now I've cleared it up, knock yourself out, but let's keep this on topic, it is afterall some good news.

Really2

It is forecast to fall for the next 2 q's at least.

So I presume they (BOE) will act on future forecasts rather than knee jurking on what has just happened.

Graham_Devon

Chaos_A.D. wrote: »

What's the alternative, keep borrowing money that we can't afford and dress it up as 'recovery'?

Why break a habit?

chucky

Chaos_A.D. wrote: »

What's the alternative, keep borrowing money that we can't afford and dress it up as 'recovery'?

you don't cut off someone's leg if you can treat the wound

tomterm8

Chaos_A.D. wrote: »

What's the alternative, keep borrowing money that we can't afford and dress it up as 'recovery'?

Well, given that these results actually mean that we're growing faster than forecast, and the fiscal deficit is naturally contracting very much faster than expected as the economy comes nearer to closing the output gap, maybe the alternative is to let the deficit close naturally?

Rather than following the Latvian precident where they made cuts on the same order as the conservatives are planning, the economy went into a tailspin, government debt is worse after 3 years of cuts than when they started, and unemployment is well over 20%?

Radionotme

A lot of comments on this story around the web seem to focus on the fact that it's construction pulling these figures up, and that the construction data is only based on surveys and could well be revised down.
Still, better to have a surprising figure higher than expected, rather than one lower than expected!