UK: lagging inflation

Article Abstract:

UK inflation could rise due to a skills shortage pushing up wage rates, according to Merrill Lynch. Unemployment could drop to under 7% in 1997, Merrill Lynch argues, and this could lead to higher average wages. Wages are the most important business cost, so higher wages will tend to mean higher inflation. Inflation is subdued over the short term with competition between retailers and low mortgage interest rates, but the rise could occur some 12 months from Sep 1996.

Publisher: FT Business
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1996

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Growth optimism

Article Abstract:

Richard Jeffrey from Charterhouse forecasts stronger economic growth than expected for the UK in 1996. Consumer spending should help boost growth. Windfalls from sources such as the National Grid flotation should also aid growth. Consumer spending grew by 1.8% in 1995, and could rise to 3% in 1996. Inflation is likely to be subdued, aided by restraint from retailers. The Bank of England may press for higher rates of interest, and rates could rise from spring 1996.

Publisher: FT Business
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995

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Subjects list: United Kingdom, Economic aspects, Inflation (Finance), Inflation (Economics)
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