Soaring confidence attributed to Bank's guidance on interest rates
Monday 17 March 2014
Businesses have brought forward spending plans as a result of the Bank of England’s forward guidance policy on interest rates, giving a fillip to Governor Mark Carney’s flagship initiative, research has found.
The policy, under which the Bank will not consider raising rates until unemployment has fallen to 7 per cent, has drawn criticism as the jobless rate falls rapidly towards the target.
But the financial data firm Markit’s survey of more than 700 businesses showed 57 per cent of respondents are more confident about the economy thanks to guidance, while one in 10 have brought forward capital spending plans.
But there was also a warning for Mr Carney in the latest evidence of a runaway housing market from the website Rightmove, which revealed the average asking prices of property across the UK hitting a record of £255,962 in March, up 1.6 per cent or £4,000 on last month and beating the previous peak in July last year.
Last week Mr Carney said the Bank was watching the market “very closely”. It can recommend the Government’s Help to Buy scheme be reined in if necessary.
Markit’s research found that construction firms had responded most positively to forward guidance, while manufacturers had also been encouraged to accelerate spending plans. Hiring intentions have also increased, according to the survey. Chief economist Chris Williamson said: “Forward guidance is reported to be having a direct overall positive impact, most notably by boosting investment and hiring intentions.”
This was backed up by the manufacturers’ organisation EEF, which said the positive outlook was leading to record recruitment and investment plans. A survey of more than 300 companies showed strong trading conditions were spreading to all UK regions.
EEF chief economist Lee Hopley said: “This is the most positive set of indicators for some time, demonstrating that we’ve not just turned the corner, we’re actively heading down the right road.”
Rightmove director Miles Shipside meanwhile reported “a greater sense of urgency among buyers”.
“The property market is starting to unlock after years of being handcuffed by fragile consumer confidence and a lack of low-deposit mortgages,” he added.
- 1 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 2 Oil tanker with $100 million cargo goes missing off Texas coast
- 3 George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
- 4 Saudi Arabia executes 19 in one half of August in 'disturbing surge of beheadings'
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Lady al-Qa’ida: On the trail of Dr Aafia Siddiqui, the world’s most wanted prisoner
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...