| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Follow Finfacts on Twitter

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : UK Economy Last Updated: Aug 8, 2012 - 4:21 PM

UK GDP growth will be zero in 2012 - - Bank of England
By Finfacts Team
Aug 8, 2012 - 2:21 PM

Email this article
 Printer friendly page
The fan chart depicts the probability of various outcomes for GDP growth.  It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves reaches £375bn (bond buying/money printing program) and remains there throughout the forecast period.  To the left of the first vertical dashed line, the distribution reflects the likelihood of revisions to the data over the past;  to the right, it reflects uncertainty over the evolution of GDP growth in the future.  If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that the mature estimate of GDP growth would lie within the darkest central band on only 10 of those occasions.  The fan chart is constructed so that outturns are also expected to lie within each pair of the lighter green areas on 10 occasions.  In any particular quarter of the forecast period, GDP growth is therefore expected to lie somewhere within the fan on 90 out of 100 occasions.  And on the remaining 10 out of 100 occasions GDP growth can fall anywhere outside the green area of the fan chart.  Over the forecast period, this has been depicted by the light grey background.  In any quarter of the forecast period, the probability mass in each pair of identically coloured bands sums to 10%.  The distribution of that 10% between the bands below and above the central projection varies according to the skew at each quarter, with the distribution given by the ratio of the width of the bands below the central projection to the bands above it.  In Chart 1, the probabilities in the upper bands are the same as those in the lower bands at Years 1, 2 and 3. 

UK GDP (gross domestic product) growth will be zero in 2012, the Bank of England forecast to day.

In its quarterly Inflation Report released Wednesday, the Bank's Monetary Policy Committee says the UK economy will not grow overall in 2012 in spite of an expected return to growth in the second half of the year, ending a double-dip recession that began in the last quarter of 2011.

In its May report, the Bank had forecast growth of 0.8% for the year but GDP fell by 0.3% in the first quarter and 0.7% in the second quarter.

"Unlike the Olympians who have thrilled us over the past fortnight, our economy has not yet reached full fitness. But it is slowly healing," said Mervyn King, the Bank's governor.

Consumer price inflation, currently 2.4%, may drop to the government's official target of 2% by the end of the year and fall below target next year, the report said.

"The labour market has remained surprisingly resilient in recent months. Private sector employment has grown robustly and unemployment has edged downwards. Although welcome news in its own right, the resilience of employment, combined with the weakness of output, means that productivity growth has been unusually low. That continues a recent pattern of both weak output and productivity growth that is difficult to explain. We cannot be sure how persistent that weakness will be, and that is one reason why the Committee has lowered its forecast for growth," King added.

The report says exports fell over the four quarters to 2012 Q1, reflecting both a broad-based slowing of global demand growth and the United Kingdom’s lower share of world trade.  Business surveys suggest that Eurozone GDP contracted in 2012 Q2, with activity subdued in several member countries and declining markedly in some.  Growth has also moderated in the United States and a number of emerging economies.  The sterling exchange rate has appreciated somewhat over the past year, particularly relative to the euro.  If that were to continue it could make it harder for British producers to compete in world markets.

The Bank said that at home, output is estimated to have contracted for three consecutive quarters, such that the level of output in 2012 Q2 is estimated to be lower than in the middle of 2010.  But the scale of that fall probably exaggerates the weakness of underlying demand growth.  Much of the contraction in the first half of this year reflects unusually large declines in measured construction output.  Falls of that magnitude appear out of line with industry surveys and seem unlikely to persist.  Moreover, the additional Jubilee bank holiday is likely to have depressed output markedly in Q2.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.

It's a simple fact that in the prevailing economic climate, the provision of high quality content cannot be sustained through advertising alone. 

Business executives who put a premium on time and value high quality information, should use our service.

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

UK Economy
Latest Headlines
UK in 28th rank of 30 advanced OECD nations for health resourcing: Economist Intelligence Unit
Business on a Shoestring: Keeping startup costs low in UK and Ireland
UK "underlying growth has stopped"
41,000 London properties held by foreign companies - 90% in tax havens
UK GDP rose 2.6% in 2014 up from 1.7% in 2013
Northern Ireland private economy contracted in December 2014
Northern Ireland may have a 12.5% corporation tax rate from 2017
UK moves ahead on 'Google tax' despite criticism
PwC charged with "selling tax avoidance on an industrial scale"; indulging in "scams"
Income inequality damages economies; Rich-poor gap highest in 30 years
Cameron warns of risk of another global recession
Only 80,000 of 1.1m UK jobs added since 2008 were full-time employee positions
UK added 112,000 jobs in third quarter; Pay inches above inflation - first time in 5 years
Germany and UK agree to restrict 'patent box' tax incentives to local R&D
German retailer Aldi to create 35,000 new jobs in UK by 2022
UK GDP growth slowed in the three months to September
UK retail sales fell in September; Tesco, Debenhams, Foxtons report market stress
UK faces more austerity and less chance of tax cuts
Globalization, the underclass and the need for a new model - Part 2
Northern Ireland PMI shows sharp increase in activity
UK economic growth revised up - above pre-recession level
London world’s most expensive city for companies to locate employees
UK retail sales in August best performance since January
UK economy added more net jobs in past 4 years than rest of the EU combined
UK to announce stiffer penalties for offshore tax evaders
UK economy since launch of the euro in 1999
IMF says British pound overvalued
UK profit warnings reach highest first half total since 2011
UK GDP up 3.1% in 12 months to end Q2 2014; Economy overtakes pre-crisis 2008 peak
Wealthy foreign students overtake finance professionals as renters in prime Central London areas
UK attracts most inward investment projects since records began in 1980s
Trends in UK and US part-time and self employment since 2008
UK labour participation at 73% - highest in decade; US at 63% - lowest since 1978
More than 20,000 client names of Jersey tax haven bank leaked
UK house prices overtook their 2007 peak in Q2 2014
UK recovery continues at robust pace
UK employment rose again at a record pace in the three months to April
UK tax revenues rose to record in 2013/2014 with help from tax dodgers
Overseas visits to London in 2013, up 43.5% in 10 years
UK economy grew 0.8% in Q1 2014; Almost back to 2008 peak