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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (23348)	2/11/2005 9:57:27 AM
From: mishedlo	Respond to of 116555

BCC revises up UK 2005 GDP estimate to 2.5 pct from 2.4 previously UPDATE Friday, February 11, 2005 12:32:00 PM afxpress.com (Updating with additional detail throughout) LONDON (AFX) - The British Chambers of Commerce has revised up its 2005 GDP growth forecast to 2.5 pct from the 2.4 pct estimate made in November It maintained the 2.3 pct projection for 2006 but highlighted that both 2005 and 2006 still represent sharp slowdowns from the 3.1 pct growth achieved in 2004 Both forecasts feature well below that made by Chancellor Gordon Brown during his pre-budget speech in December. Brown said he expects UK GDP growth to be between 3-3.5 pct in 2005 and 2.5-3.0 pct in 2006 Additionally, official data shows that growth in 2004 was 3.1 pct, below Brown's 3.25 pct estimate in December, the BCC pointed out BCC economic adviser David Kern said the slowdown in growth will be mainly caused by lower growth in household consumption, as the cooling housing market, and the increased personal debt burden, both dampen personal spending "Investment and exports, while stronger than in our previous forecast, are most unlikely to fill up the slack created by weaker growth in consumer spending,” he added The BCC sees household consumption growing by 2.3 pct in 2005 and 2.1 pct in 2006 -- well below the 3.3 pct growth estimated in 2004. According to the BCC, the outlook for UK interest rates is uncertain but a rise is still possible, even though such a hike "is unnecessary and potentially harmful." Its central forecast now envisages no change in the benchmark repo rate in the next 5-8 months, followed by a cut to 4.50 pct in the final quarter of 2005. The BCC also believes the pound will weaken over the next 12-18 months, initially against non-US dollar currencies On the fiscal front, the BCC said the government is in danger of breaking its self imposed Golden rule of balancing the budget, excluding investment, across the economic cycle "There is a clear risk that the Golden Rule will be broken without additional fiscal tightening. Tax rises totalling 8-10 bln stg may be needed to avoid breaking the Golden rule," BCC said forexstreet.com

To: zonder who wrote (23348)	2/11/2005 10:14:56 AM
From: mishedlo	Respond to of 116555

Blair, Brown say only Labour can be trusted on economic policy UPDATE Friday, February 11, 2005 11:25:21 AM afxpress.com (Adds further details) LONDON (AFX) - Labour fired its first shots in the war over stewardship of Britain's finances when Prime Minister Tony Blair and Chancellor of the Exchequer Gordon Brown said only their party could be trusted on economic policy In the first of a series of high profile "signing ceremonies" taking place across the country today, the two launched key economic pledges for a third term in office At each event, Blair will sign up to a separate promise to voters on what the party will do if re-elected. Blair and Brown focused on broader economic issues that they feel will win them votes at the next General Election, expected sometime in the spring These included raising the minimum wage, doing more to help first-time home buyers and taking people off incapacity benefit and getting them into work "We'll make sure that the British people get the economy that we need and also that we equip them for that economy in the 21st century," Blair said Brown said he believed "a Labour Government is the only government that can be trusted with the British economy". Each promise -- there are six in total -- will appear on the now-traditional Labour pledge card - a sure sign an election is not far away and campaigning has effectively begun Blair was travelling via helicopter to key marginal constituencies before arriving at Gateshead in the North East for the Labour Party's spring conference On his "pledge tour", Blair also met Education Secretary Ruth Kelly, Home Secretary Charles Clarke and Health Secretary John Reid.