Do many folks question UK's divergence from European policies? Aren't they doing better across the channel?
I read something about US capital flowing to Europe and high wage economies? Was that on the list? Thought I filed it bkut can't find. This would be an example of the countervailing forces in capital movement I guess.
UK economy 'will go to brink of recession'
Britain's economy is getting worse with exports continuing to fall, the Bank of England said.
It warned that the economy would go to the brink of recession with growth "close to zero" in the first half of 1999.
The worsening outlook emerged in the Quarterly Inflation Report by the bank's Monetary Policy Committee which sets interest rates.
Last week the MPC cut interest rates to 5.5 per cent saying the cut was needed to counter the worsening international economic situation.
In the report, the bank said that international conditions had led to a "sharp deterioration in prospects for the world economy" since its last report in November.
The report said: "The probable consequences of these international developments and risks for the UK are weaker export growth."
The worsening outlook for exporters added to the bank's wider view that a sharp contrast existed between the performance of manufacturing and service sectors, with manufacturing growth being hit harder.
GDP growth, the key measure of economic performance, will be between 0.5 per cent and 1 per cent in 1999, according to the report.
This was lower than the forecast of 1 per cent made in November and the bank said GDP growth would be close to zero in the first half of this year.
A fall below zero, which is already being predicted by some economists, would mean the UK was technically in recession.
But the bank said in its report that the slowdown would be temporary and that it expected economic growth to recover in 2000.
The sharp slowdown does mean that the bank is set to hit its target of underlying inflation at 2.5 per cent for the next two years, it said.
But it added there was "considerable uncertainty about that forecast".
It also said that some members of the MPC believed the inflation forecast should be closer to 2.3 per cent.
The future of interest rates would "depend on how the outlook for inflation evolved", the report said.