The Office of National Statistics reported today that fourth quarter growth came in at 0.8%, beating expectations, with the growth from a year ago being 3% (see graph).
Unemployment also started falling in the fourth quarter dropping to 5.5% from 5.6%, with the claimant count also dropping.
The above could explain the Bank of England's surprise rate rise in January. However minutes out today show that the decision to raise rates was narrow - just 5-4, in favour.
As bloomberg noted, the naysayers were mainly bank officials - Deputy Governor Rachel Lomax, Chief Economist Charles Bean, Executive Director of Markets Paul Tucker, were joined by David Blanchflower, one of the external members, in voting for no change. The last time this many bank officials voted against the governor was in September 2000. What's worrying the naysayers is the state of the global economy. The jury is still out on what is happening in the American economy. Imports into the American economy did not rise in the fourth quarter, always a signal that consumers are cutting back.
1 comment:
The US economy has to be a concern, although I thought that it was healthier than 5 years ago.
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