UK: on the way

Article Abstract:

UK interest rates look set to rise in May 1995, to curb inflation which could be fueled by the weakness of pound sterling. Corporate earnings upgrades are higher than downgrades and profits are expected to grow by 14% in non-oil and non-financial services sectors. Rising exports to Jan 1995 have helped engineering firms, though this could change. Construction companies have fared less well, with downgrades. Retail banks have fared better than merchant banks in terms of earnings.

Profits, Corporate profits

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Contrasting fortunes

Article Abstract:

UK engineering firms have seen a rise in exports and weak domestic demand. Overall growth is affected by a slowdown in the increase in export growth in 1995. Shares in engineering firms have performed well since 1992 but this may not continue. Companies which are exposed to US markets are most likely to suffer problems due to slower economic growth in the US. Markets such as housebuilding and automobiles are likely to be affected, though the aerospace market could perform well.

Motor Vehicle Parts, Motor Vehicle Parts Manufacturing, Engineering Services, Aircraft & Parts, Aerospace Product and Parts Manufacturing, Engineering for Construction Industry, Automotive parts, Engineering firms, Construction engineering

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Beware false prophecies

Article Abstract:

The UK economy has undergone structural changes, and this affects measurement of the output gap, according to HSBC Greenwell. The ideas of an output gap has become fashionable and if the gap is narrowed, inflationary pressure could increase. It is not easy to measure the output gap due to changes in the UK economy such as an erosion of the power of labor unions, and privatizations. Other factors influence inflation such as competition levels and expectations.

Measurement, Gross national product

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