Bank of England February Report significant points:
- There has been a softening of UK growth forecasts from 2.5% to 2.2%
- Spare capacity in UK is 0.3% of GDP and unemployment is below 5%, which leaves little room for manoeuvre within the current downturn – this may lead to price pressure
- A corporate cash balances are high (lessons learned from the recession) and because lending from the non-banking sector has grown, any issues within the financial sector are not expected to have a catastrophic effect on a globally resilient UK
- Global growth outlooks are fuelling the 7% drop in equity; growth expectations amongst emerging economies have dropped significantly as a result of the drop in commodity prices (Less investment and bank lending tightening). Growth expectations in advanced economies has risen (where 75% of our exports go to)
- Oversupply is the reason why the oil prices are dropping. Some commentators are expecting prices to drop to $10 a barrel
- Productivity in the UK is rising but more business investment is required to consolidate
We will continue to keep you updated with all of the latest financial and accounting news and hope that you have found our Bank of England February 2016 Inflation Report Summary useful.
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