During the summer, the Bank of England promised to keep the benchmark rate at 0.5% at least until the unemployment rate falls to 7% and the economy starts transferring signals of a strong pace of recovery. Recently, positive signs became more and more visible, as the unemployment rate decreased to 7.7%, raising the hopes to see the labour market remarkable improved by 2015. Still, other parameters need to be considered, as the inflation which remains at 2.7% and threatens to be nearing to 3%. In this case, a further increase in the interest rate needs to be considered. In the meantime, the stimulus program is maintained as it needs to stay in place until the economy prove to be as strong as needed in order to have this aid removed.
The governor Mark Carney has no intention of removing the actual program, on the contrary, he is seriously considering new ways of better stimulating the economy, as it takes all necessary safety measures since the high level o instability in the world’s economy and especially in the European economy.
The main indicator of economic growth last released was the quarterly GDP, which was up 0.8%, beating the expectations of 0.7%, fact that gave momentum to the economy of the United Kingdom. The services sector, which accounts for most of the activity in the British economy, increased with 0.7%. Even if the evolution of the economic growth is still under the rhythm imposed in 2008, given the whole European picture, United Kingdom is finding itself among the countries with the brightest results. It also tends to give momentum to the Euro zone, showing improvements, even if there are countries that need more time in order to find their stability.