Following the Bank of England’s Quarterly Inflation Report there seems to be some optimism about the prospect of GDP growth over the next four years. They predict growth of 2.9% in 2015 and 2.6% in 2016 & 2017. The last time the UK enjoyed growth in excess of 2.5% over four consecutive years was around the turn of the millennium.
Unemployment is expected to continue to decline down towards 5% and inflation to average 1.2% next year and 1.7% the following year.
Mark Carney, the Governor of the Bank of England, commented that he was expecting to have to write to the Chancellor to explain the reasons for CPI falling below 1% and the minutes of this month’s MPC meeting, released on Wednesday, were as expected with 2 members voting for a rate hike, leaving the committee continuing to have a 7 – 2 split.