UK services still booming
Saturday 04 April 1998
With this confirmation of a dual economy - booming services and limping manufacturing - the Bank of England's Monetary Policy Committee still faces a tough dilemma when it meets next week. Official figures for industrial output due on Monday are expected to confirm this pattern.
City experts expect the decision on Thursday to hinge, once again, on the vote of Eddie George. The minutes of February's meeting, the latest published, showed the Governor's casting vote to have been decisive in keeping rates unchanged at 7.25 per cent.
Yesterday's survey of services by the Chartered Institute of Purchasing and Supply showed buoyant activity, with the index at 60.3, a fraction lower than February but well above the 50 "boom-bust" watershed.
New business and the backlog of work increased, at a slightly slower pace than the previous month, while employment and prices rose at a faster rate. A third of all firms said they had more new business, and blamed their inability to meet current demand on staff shortages.
Respondents said they had to offer higher pay to attract new staff and retain existing staff, with the result that costs rose sharply for the 21st month running. The one negative note came from a sharp fall in optimism about future prospects.
Kevin Darlington, an economist at ABN Amro, said: "This survey is unlikely to tip the balance at next week's MPC meeting, but if it heralds firmer GDP growth in the first quarter or higher underlying pay growth, we might only have to wait until May for the next rate rise."
- 1 What happens to your body when you give up sugar?
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
- 4 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 5 Why you're almost certainly more like your father than your mother
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Saudi Arabia executions now at 'unprecedented rate' after kingdom kills four more in two days
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
End of the licence fee: BBC to back radical overhaul of how it is funded
Nigel Farage promises Ukip will not 'stigmatise' would-be migrants – and says he wants 'everyone to speak the same language'
Ex-head of MI6: 'We shouldn't kid ourselves that Russia is on a path to democracy'
Most people think legal tax avoidance is just as wrong as illegal tax evasion, poll suggests
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...