Can the Great British Consumer keep us growing?

Article Abstract:

Retail sales are continuing to grow in the UK, while services and manufacturing are declining. It takes time for people's behaviour to change, so consumption is likely to slow down gradually during winter 2001 to 2002 as the reality of the economic situation starts to become clear.

Forecasts and trends

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Can we carry on just spending our way out of economic trouble?

Article Abstract:

High consumer spending is ensuring that the UK economy does not enter into recession. However, questions must be raised about whether this trend can be sustained, especially as a significant proportion of spending is funded by borrowing. It is important for people to gradually build up their savings again and for interest rates to stay low.

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How to pick up the clear signals

Article Abstract:

Those seeking to gain a clear picture of the state of the UK economy should be cautious about listening to borrowers, who present their views forcefully and produce a political bias towards low interest rates. It is also important to avoid misleading economic data. More attention should be given to employment trends, which are a forward-looking indicator, to corporate profitability and to tax receipts. It is unclear how the Bank of England will react to developments in these areas.

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