British Economy Beats the Odds
The British economy finished 2004 with a growth of 3.1% even with a decline in production and a disappointing holiday season for the retail industry.
“Despite the continued downbeat forecasts of some outside commentators, today’s figures and last week’s public finance data confirm … the UK has entered 2005 on course to continue its record period of growth with historically low inflation and interest rates,” stated Paul Boateng, chief secretary to the Treasury.
Though Chancellor Gordon Brown predicts a 3 to 3.5% growth for the current financial year, many don’t see this as a likely outcome.
“His prediction that the economy will expand at a similar rate in 2005 continues to look too optimistic, however, given the growing evidence that the housing market downturn is beginning to slow household spending while industry continues to contract,” said Jonathan Loynes of Capital Economics.
Over the last 4 years, Britain has experienced an average annual growth rate of 2.5%.
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