Thursday, March 15, 2007
The UK economy will perform better than previously thought in 2007, the CBI has said, although it thinks interest rates will rise again soon.
The employers body is predicting growth of 2.9% in 2007, ahead of its previous 2.7% forecast. "The economy will enjoy better than expected growth this year as consumers continue to spend and businesses invest in their companies," said Ian McCafferty, the CBI's chief economic adviser.
The CBI expects the Bank of England to keep a "tight grip" on monetary policy despite an expected fall in inflation. It expects rates to rise soon to 5.5% and remain there throughout 2008.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6450787.stm
Strong consumer and business confidence appear to be underpinning very healthy growth projections in the UK. Consumption and investment are both key components of GDP, and hence growth in consumption and investment feed through into growth in GDP. Moreover, improvements in the investment rate push actual investment above break-even investment (the amount of investment needed to offset depreciation, for example), increasing the capital stock, and hence output in the long-run.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Chapters 4 and 9 (at principles and intermediate level, respectively) describe the various components of aggregate demand and illustrate the determination of national income. Chapter 8 also discusses the effect of investment on economic growth in the long run. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
The employers body is predicting growth of 2.9% in 2007, ahead of its previous 2.7% forecast. "The economy will enjoy better than expected growth this year as consumers continue to spend and businesses invest in their companies," said Ian McCafferty, the CBI's chief economic adviser.
The CBI expects the Bank of England to keep a "tight grip" on monetary policy despite an expected fall in inflation. It expects rates to rise soon to 5.5% and remain there throughout 2008.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6450787.stm
Strong consumer and business confidence appear to be underpinning very healthy growth projections in the UK. Consumption and investment are both key components of GDP, and hence growth in consumption and investment feed through into growth in GDP. Moreover, improvements in the investment rate push actual investment above break-even investment (the amount of investment needed to offset depreciation, for example), increasing the capital stock, and hence output in the long-run.
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Chapters 4 and 9 (at principles and intermediate level, respectively) describe the various components of aggregate demand and illustrate the determination of national income. Chapter 8 also discusses the effect of investment on economic growth in the long run. Find out how to get LiveEcon at http://www.liveecon.com/. Download this blog as a Blogcast via the website.
# posted by Sam @ 19:07 
