UK set for balanced growth, but confidence dips

Link: MPC keeps interest rates at 4% (

The latest BDO Stoy Hayward ‘poll of polls’ presented a generally bright outlook but found optimism set to fall for the first time since October 2002.

Easing inflationary pressures would not be enough to prevent another interest rate hike – albeit a moderate one – over the next two months, the poll found.

The firm’s Business Trends report contained good news for Gordon Brown, saying the chancellor was on target to meet the lower end of his 3 to 3.5% growth target.

Chris Grove, partner at BDO, said: ‘The rising inflationary pressures implied by last month’s report have receded, confirming that significant interest rate hikes to control inflation are unlikely to be required, which will be a relief to most companies.’

‘But in order to ensure medium-term stability, we expect that the Bank of England will increase rates either this month or next.’

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