Though Mervyn King sounded downbeat at the press conference and refused to rule out further asset purchases under the quantitative easing programme, the Bank’s new forecasts are more upbeat and predict higher inflation, compared with three months ago. In particular, the Bank’s fan charts suggest growth will recover to around 4% over the next couple of years. But it seems to be retaining its dovish stance on policy. The inflation report is here.
Unemployment figures, meanwhile, continued the very encouraging recent pattern. The new Labour Force Survey total for July-September, 2.46m, suggests unemployment fell in both August and September, The LFS rate dropped from 7.9% to 7.8%, and employment rose by 6,000 over the latest three months. Pay growth was very weak at 1.2% but these numbers represented very good news. More here.
Originally published at David Smith’s EconomicsUK and reproduced here with the author’s permission.