Economic outlook: United Kingdom

Article Abstract:

The UK economy saw GDP up by 0.7% in the third quarter of 1996 with healthy consumer spending throughout the year. There was a strong case for fiscal tightening in the Autumn 1996 Budget with consumer spending rising and government borrowing running at unsustainable levels. The government aims to hold spending departments to a cash rise of just 2.3% in 1997/98 and interest rates are expected to rise. The UK is not expected to be a founder member of the European Monetary Union scheduled for 1999 as the pound has little track record of recent exchange rate stability against the DM. Growth in consumer spending will be reinforced by the windfall gains as some building societies convert to public companies.

Administration of Urban Planning and Community and Rural Development, Economic Development NEC, Economic development

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United Kingdom

Article Abstract:

The British economy is expected to grow by 2.2% during 1998 and by 1.3% in 1999, assuming there is no further increase in base rates. Exports have fallen dramatically and the pound is likely to become weaker. The decision by the Monetary Policy Committee to raise interest rates as a means of controlling inflation may reduce the rate of economic growth and push the United Kingdom into, at worst, a recession, or a significant slowdown in growth. Unemployment is expected to increase.

Financial Forecasting, Economic forecasting, Business forecasting

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