mpc.theyserveforyou.com

mpc: 26 The balance of news on the month was consistent with a stronger overall picture for output and prospective inflation. Sterling had fallen by over 2%. Indicators from the world economy suggested that the recovery in activity was continuing broadly as previously expected, but consumer price inflation had risen in the United States and the euro area, and oil prices were materially higher. In the United Kingdom, the ONS provisional estimate of Q1 GDP growth had been surprisingly weak, but other evidence was consistent with a higher figure; indicators of consumption suggested continuing strength, and household borrowing growth had increased further; house price inflation had increased and indicators of housing activity were also robust. Business confidence was buoyant, investment intentions remained bright and, over a longer perspective, government spending growth was adding to the pressure of demand on resources. Labour market conditions were tightening, even though it was not clear how rapidly. Consumer price inflation had fallen, and was well below the target. It was, however, expected to rise in the next few months, though it was difficult to judge the extent of underlying pressure. It was possible that geopolitical risks had increased, but it was not clear whether, if any of those risks materialised, higher or lower inflation would result in the medium term.