Unstable Economic Growth Rate Of United Kingdom

The economy of UK will keep dipping in and out of growth this year. According to Sir Mervyn King, the chief of Bank of England the UK economy will “zigzag” this year. The quarterly inflation reports of the bank stated that the economy will grow by about 1% and forecasts inflation will continue to fall in the coming months but now it now predicts inflation will decline towards 1.8% by 2014, not as low as the previous estimate of 1.3%.
Chief of Bank of England warned that the euro zone crisis remained a big risk. UK unemployment rose by 48,000 to 2.67 million in the three months to December, the smallest rise in almost a year. Though some of the business survey is showing a pick up in the economy at the start of this year, but said this may not last. It also forecast that inflation would drop to the government’s target of 2% by the end of 2012 and will fall further next year.
The fear is generating that UK is slipping back into a technical recession; the governor reiterated his warning that the recovery is likely to be ‘slow and uncertain. The inflation of UK is falling from its peak but it will stay above the target. The economy of UK has just suffered a quarter of contraction and could slide into a technical recession. Disruptions to the supply of oil could pose an upside risk to the inflation outlook. The extra Bank Holiday for the Queen’s Diamond Jubilee made it even harder than usual to interpret the official estimates of growth. The hard times remained tough and challenging for the UK economy, and there remained a number of factors that were completely unpredictable. Moreover there is no easy or quick remedy to tackle the current economic situation. Apply for quick finance at payday loans no credit check @ and get finance without any type of verification.
The slowdown in inflation would help economic recovery as people’s spending power became less squeezed. According to the reports released on Tuesday showed that Consumer Prices Index (CPI) inflation slowed to 3.6% in January, from December’s rate of 4.2%. The inflation chart appears to show that CPI will drop to around 1.8% in two years, higher than its November forecast of 1.27%. Millions of UK people spending power reduced sharply. The Bank is predicting a pick-up in growth to about 1.8% in 2013.