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BOE downgrades growth and states inflation will fall next year

Graham_Devon
Graham_Devon Posts: 58,560 Forumite
Part of the Furniture 10,000 Posts Combo Breaker
in Debate House Prices & the Economy
http://www.bbc.co.uk/news/business-20324359

Seems a bit deja vu.
The Bank of England has cut its UK growth forecast to 1%, with recovery "slow and protracted" and inflation staying higher than previously thought.

Continuing global economic fragility meant the previous forecast of about 2% was unlikely to be achieved, it said.

Delivering the Bank's quarterly report, governor Sir Mervyn King said recovery would follow a "zig-zag" pattern.

He added the bank had not "lost faith" in the quantitative easing programme as a way to stimulate the economy.

The quarterly report said inflation would not now fall towards the government's 2% target until mid-2013, rather than in the first half of next year as previously thought.
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Comments

  • IveSeenTheLight
    IveSeenTheLight Posts: 13,322 Forumite
    Graham_Devon wrote: »
    http://www.bbc.co.uk/news/business-20324359

    Seems a bit deja vu.

    Is it unexpected?
    Most people would predict a slow recovery given the circumstances
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • shortchanged_2
    shortchanged_2 Posts: 5,546 Forumite
    IveSeenTheLight wrote: »
    Is it unexpected?

    To some on here, yes.
    Why are we here?......................because we are not all there.
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    IveSeenTheLight wrote: »
    Is it unexpected?
    Most people would predict a slow recovery given the circumstances

    Someone did start a thread a little while ago though (think it was Graham) showing that this recession was unusual compared to previous recessions in that the recovery was shallower. Past recessions show the economy accelerating rather than limping out of recession.

    Maybe that'll happen this time too but we're just not at that point yet.
  • IveSeenTheLight
    IveSeenTheLight Posts: 13,322 Forumite
    wotsthat wrote: »
    Someone did start a thread a little while ago though (think it was Graham) showing that this recession was unusual compared to previous recessions in that the recovery was shallower. Past recessions show the economy accelerating rather than limping out of recession.

    Maybe that'll happen this time too but we're just not at that point yet.

    I would agree, once we are at a point of sustainable growth, I would expect there to be an upturn.

    We can see already that the time to get to that point is longer than previously and with no real visibility of growth in the short future, I do think we'll limp along for a couple of years yet.
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • ILW
    ILW Posts: 18,333 Forumite
    Is it unusual to see relatively high inflation during a world slowdown?
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    ILW wrote: »
    Is it unusual to see relatively high inflation during a world slowdown?

    As high as 2.7%?
  • Wookster
    Wookster Posts: 3,795 Forumite
    But according to some, hpi will be storming, so buy now, don't miss the boat!
  • IveSeenTheLight
    IveSeenTheLight Posts: 13,322 Forumite
    Wookster wrote: »
    But according to some, hpi will be storming, so buy now, don't miss the boat!

    Even with nominal stagnation, why put off what you can buy today as opposed to rent for years hoping for a nominal fall.
    :wall:
    What we've got here is....... failure to communicate.
    Some men you just can't reach.
    :wall:
  • GeorgeHowell
    GeorgeHowell Posts: 2,739 Forumite
    ILW wrote: »
    Is it unusual to see relatively high inflation during a world slowdown?

    It's stagflation and occurs when the inflation is not demand driven.
    No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.

    The problem with socialism is that eventually you run out of other people's money.

    Margaret Thatcher
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    wotsthat wrote: »
    Someone did start a thread a little while ago though (think it was Graham) showing that this recession was unusual compared to previous recessions in that the recovery was shallower. Past recessions show the economy accelerating rather than limping out of recession.

    Maybe that'll happen this time too but we're just not at that point yet.

    There's nothing to replace financial services in the short to medium term. That's the issue.

    Takes years for businesses to grow in size. (Even with adequate finance available).
This discussion has been closed.
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