As the MPC meets on Thursday they are faced by a dilemma: whether to believe the latest GDP data telling us the UK is still in recession or the growing amount of data that we are past the worst and at the start of a long uphill climb towards growth.
The record of success in using the early survey data to indicate the growth of the economy is pretty poor. Remember last quarter the first release data had us contracting by nearly 1% while the later figures showed a contraction of some 0.6%. At a time when the statistics are telling us one thing I think we should believe what we are seeing: that we are close to zero - if not mildly positive - growth and that the MPC should hold back from extensive injections of liquidity into the system for fear of starting a credit led bout of inflation in due course.
For sure any signs really are fragile, but they are there. Whether it is a slowdown in corporate insolvencies or growing retail numbers, we are seeing indications that the markets are starting to re-structure and turn to thoughts of growth.
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