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Bank of England has upgraded its growth forecast ....

padington
padington Posts: 3,121 Forumite
in Debate House Prices & the Economy
Carney says recovery has taken hold ....

http://www.theguardian.com/business/2013/nov/13/bank-of-england-inflation-report-and-uk-unemployment-data-live
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Comments

  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    2.8% GDP growth for next is pretty punchy given the ongoing problems in Europe. Still even there we are starting to see the first little embers of a possible recovery.

    Interesting times. Managing to return all these extraordinary policies to normal ones will take some doing. I don't envy Mr C.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    But to be a sustainable, we need to see growth in real wages (ie, pay rises need to beat inflation not lag behind it) to sustain consumption growth.

    Found this to be an interesting comment. How low will the rate of inflation fall?
  • ILW
    ILW Posts: 18,333 Forumite
    Thrugelmir wrote: »
    Found this to be an interesting comment. How low will the rate of inflation fall?
    Is consumption growth required when we can export?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ILW wrote: »
    Is consumption growth required when we can export?

    Carney also said that Threadneedle Street isn't banking on a Eurozone recovery.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    Thrugelmir wrote: »
    Found this to be an interesting comment. How low will the rate of inflation fall?

    Normally the mechanism is wages rise as unemployment falls rather than inflation falling below wage increases.
  • michaels
    michaels Posts: 29,261 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Generali wrote: »
    Normally the mechanism is wages rise as unemployment falls rather than inflation falling below wage increases.


    But we do have the Eurozone on deflation watch and a lot of recent UK inflation has been in 'international tradables' which could all see delfaton if the BRICS are less strong/supply is good and now also strong pressure on 'administered' prices (such as water, utilities, council tax) perhaps it is worth putting the UK on deflation watch again too?
    I think....
  • ILW
    ILW Posts: 18,333 Forumite
    Generali wrote: »
    Normally the mechanism is wages rise as unemployment falls rather than inflation falling below wage increases.
    Normal has all gone. We are expecting up to 1 million low paid immigrants over the next few years. Many are grads who will work for minimum wage.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    michaels wrote: »
    But we do have the Eurozone on deflation watch and a lot of recent UK inflation has been in 'international tradables' which could all see delfaton if the BRICS are less strong/supply is good and now also strong pressure on 'administered' prices (such as water, utilities, council tax) perhaps it is worth putting the UK on deflation watch again too?

    The UK is off deflation watch for me for now. M4 growth is starting to accelerate.

    Disinflation might be imported but that's different to deflation IMHO.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Generali wrote: »
    Normally the mechanism is wages rise as unemployment falls rather than inflation falling below wage increases.

    The UK may well follow the Eurozones deflationary path. The debt overhang still very much exists. A problem which has to be faced down the road.
  • black_taxi_2
    black_taxi_2 Posts: 1,816 Forumite
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    I think I will be mortgage free before interest rate rise

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