In the context of an European economic climate that strives to inspire stability, United Kingdom struggles to remain the third economy in Europe and this month the Monetary Policy Committee is confident on a better performance of the economy, with the level of output at the end of the second quarter up with 0.7%.
The quantitative easing program is keeping its purchasing pace at 375 billion pounds this month, for fear of affecting inflation (officials predicted a growth of 0.5% this quarter comparing with the last quarter were was registered an increased with 0.3%). Furthermore, an increase in the program would also complicate the transition to a normal economy which would not be sustained by such measures at a certain point in the future. Thereby, increased stimulus are negatively influencing inflation but there is a justified need of those stimulus to improve the labor market. The interested rate is kept at 0.5% and the inflation is expected to exceed the present target (2%) in the short run. Summing up, a better outlook of the U.K.’s economy is expected on the long term but, these expectations may change according to the situation in the Euro zone.