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Report
from the UK
BoE raises interest rate to rein in inflation
The Bank of England (BoE) has voted to raise interest rates by 0.25% to 5.5% to rein in inflation and curb
consumer spending. Business and employers accepted that the latest rise was ¡°necessary¡± but added caution was
needed in future so not to slow UK growth too much. UK retail sales growth slowed to 2.4% in April as opposed to
6.8% the same month last year. The British Retail Consortium (BRC) warned that the figures could signal a
longer-term retail slowdown, in line with Bank of England thoughts.
Business confidence improves despite strong pound
Manufactures have continued to shrug off the impact of the strong pound, according to a survey by the
Confederation of British Industry (CBI) that reported a marked improvement in business confidence. It was the
first time since February 1995 that the quarterly regional trends survey showed better results across all the UK
regions. Total new orders improved in every region for the first time since May 1995 and most expected further gains.
For many years, builders and contractors have complained about the planning system in the UK. Now the CBI has
come out strongly urging the government to change the system, particularly in relation to energy and transport, to
prevent costly delays. Investors need greater security, which would be provided by an improved planning process.
House prices signal easing in the market
House prices rose by 1.1% in April caused by a shortage of available property, according to the Halifax. The annual
rate fell to 10.9% from 11.1% in March. Halifax said that there was accumulating evidence of a slight easing in the market.
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