Press Room: 05 Feb 10
Economics - Week's data ending 5 February 2010
- The Bank of England's Monetary Policy Committee (MPC) voted to hold its £200 billion Asset Purchase Programme (quantitative easing) and to keep interest rates at 0.5% at its February meeting. The Committee noted that this stock of past asset purchases and the low Bank rate would continue to provide a substantial stimulus for some time to come. The CBI expects a small rise in interest rates in mid-2010, as the economic recovery will mean that the Bank will have to make a start in returning monetary policy towards more normal levels.
- The CIPS/Markit Purchasing Managers' Indices (PMIs) continued to point to expanding activity in the services and manufacturing sectors in January, for the ninth and fourth consecutive month respectively. However, while activity in the manufacturing sector rose at its fastest since October 1994, growth in the service sector had slowed somewhat on recent months.
- The Bank of England reported that lending to households remained weak in December and the number of mortgage approvals fell slightly, after having edged upwards for the past twelve months. In addition, while lending flows to non-financial companies picked up slightly for the second month running, they remained well below their long-run average.
- According to Nationwide, house prices rose for the ninth month running in January (by 1.2%), and were 8.6% higher than a year ago - the fastest annual increase since October 2007. However, the 3 month-on-3 month rate of growth slowed slightly further, indicating some deceleration in underlying house price inflation.
- The Gfk index of consumer confidence edged up slightly in January, after modest declines in the previous two months.
Source: CBI Business Update - Week ending 5 February 2010
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