Optimistic CBI forecasts turn in manufacturers' fortunes
Wednesday 28 July 1999
Optimism rose slightly in the latest quarter, its first improvement since October 1997, the Confederation of British Industry said. It said a turnaround in manufacturers' fortunes was in sight, while one City economist raised his forecast for a rise in interest rates next week to one in five. But optimism about export prospects over the year ahead deteriorated a little further in the face of the strong pound. The CBI said that unless sterling fell back on the foreign exchanges, the Bank of England should cut rates by another 0.25 per cent later this year.
Nick Reilly, chairman of the CBI's economic affairs committee and head of Vauxhall Motors, said he believed rates were at the right level, given signs of a domestic recovery. But he added: "If inflation pressures prove as weak as our present forecast, the next move in rates should again be down later this year."
The survey showed 21 per cent of firms were more optimistic about business than four months ago while 16 per cent are less optimistic, giving a positive balance of 5 per cent. This compared with balances of minus 6 per cent in April and minus 40 per cent in January.
But all other indicators, including output and orders, fell - although at a slower rate than the last survey in April. Mr Reilly said: "Things are less gloomy ... but these trends need to be confirmed if we are to look positively at the long-term future."
Economist Adam Cole of HSBC said the sharp rise in optimism pointed to above-trend GDP growth. "The rise in overall business ... is further evidence that rates do not need to fall further," he said.
Kevin Gardiner of Morgan Stanley, in a note written before yesterday's survey, said the probability of a rate rise at the August meeting was between 15 and 20 per cent. "For a money market that has not seriously considered the possibility, this would be traumatic," he said.
It would be the first tightening of monetary policy since June 1988.
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
- 3 Disney heiress Abigail disowns her share of family profits in West Bank company
- 4 The secret report that helps Israel hide facts
- 5 Israel's propaganda machine is finally starting to misfire
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Disney heiress Abigail disowns her share of family profits in West Bank company
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...