Just how different are the outlooks for the UK and US economies?
With the minutes of the Bank of England’s Monetary Policy meeting published yesterday it becomes apparent that the UK economic outlook is looking positive and while the global economic outlook was dimmed, particularly the US and Eurozone, the general outlook was positive.
The most encouraging note in summary was that “The economy was starting to return to normal“. The bank has indicated that interest rates will rise sooner than the financial markets expected although the first qtr dampening of mortgage approvals was of concern.
“The optimism balances in the CBI survey of consumer, business and professional service companies had risen in May to their highest levels since the survey began in 1998“.
Meanwhile the US Outlook has a number of analysts concerned. Over at US Economic Outlook the view is deeply pessimistic. “Every four to six years, the U.S. experiences an economic slowdown. It happens like clockwork. The current bull market is now in its fourth year.“.
The IMF has cut its projections for the US through to 2017 in their latest annual review. Some of the early statements paint a bleak picture. “In the early part of this year, as a harsh winter conspired with other factors (including inventory drawdown, a still-struggling housing market, and slower external demand), momentum faded in the U.S economy.”
The IMF outlook for the US is also dampened. “Potential growth is forecast to average around 2 percent for the next several years, below both historic averages and the outlook assessed at the last Article IV consultation”
Has the road just forked between the UK and US economies? With the Uk increasingly isolated from the Eurozone and its troubles just what road will the UK be on in 5 years time? There are no solid answers but surely a great subject for a dinner or breakfast debate?