Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

A meeting held by the Bank of England’s Monetary Policy Committee (MPC) earlier this month resulted in the verdict that interest rates should not be increased despite the likelihood that inflation will continue to rise to 5% up from 4.5%, well above the initial hopes of a maximum of 2%.

The meeting was called by the MPC in order to consider its options for how best to help the UK’s struggling economy. The committee acknowledged the biggest economic problems that have risen, such as decreased consumer demand and consequently dwindling retail sales; the slowing of the housing market and a reduction in exports and output, and deliberated on how best to address these issues.

Quantitative Easing was considered as a possible solution. However, it was decided by a vote that this measure is not appropriate just yet. Adam Posen was the only member to vote in favour of introducing Quantitative Easing now. Over the past few months, Posen has maintained that rising inflation does not impose as much threat to the economy as weak growth and therefore the Quantitative Easing programme should be expanded to incorporate a further £50bn for economic stabilisation. Recently, there has been conjecture as to whether the continuing uncertainty over the economy will cause other MPC members to endorse his opinion.

The chief UK and European economist at IHS Global Insight, Howard Archer, has further confirmed the speculations with his prediction that the MPC will go ahead with the increase of £50Bn by the end of 2011. He expressed his doubt that interest rates will be increased either this year or next year but confirmed that it is likely the Bank of England will introduce Quantitative Easing in the near future.

The MPC also recognized that it could do more to support the economy, an admission that was well received by businesses. David Kern, chief economist at the British Chambers of Commerce highlighted that although the decision to implement Quantitative Easing remained unchanged, there was definitely a sense that the MPC is in preparation to increase the programme.

Yesterday, the International Monetary Fund lowered its expectations for economic growth in the UK this year by 0.5%.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

More posts by this author
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

Architects and Tax

Architecture is a highly diverse sector when it comes to tax. It’s partly down to the type of businesses that carry out…

Read More

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.