Gloomy UK outlook

Grim Outlook for UK Economy

A leading government think tank has forecast a grim future for the UK economy. The National Institute of Economic and Social Research (NIESR), said on Thursday, that the UK economy grew by just 0.1% in the period from April to June 2011 after just 0.5% growth over the first three months of the year and the 0.5% decline at the end of 2010.

If the think tank forecast is correct, it would highlight the fact that the current trend is ste to develop into something more worrying. 

The Bank of England (BoE) is aware of potential difficulties ahead and this is the reason why interest rates were left at a record low for a 28th month in a row.

Inflation remains above target and there are worrying signs of inflationary difficulties in the UK’s fragile economy.
Market expectations continue to suggest that there is no chance of a UK interest rate increase until the middle of next year.

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