A clutch of top UK economic forecasters on Thursday swept under the rug predictions for another 50 billion pounds of gilt purchases they thought would take place starting just in a few weeks.
News that the UK economy bolted ahead at a 1.0 percent quarterly pace in the three months to September – nearly double the consensus prediction in the Reuters Poll and easily more than twice the last measured growth rate in the United States – was probably a good enough reason on the surface.
But most agree the main reason was an extra work day compared with the prior quarter – when the Queen’s Jubilee celebrations left vast swathes of the country idle – along with a spending boost from accounting for tickets for the Olympic and Paralympic Games.
No forecaster is expecting that momentum to carry through to the end of the year. Even the most optimistic of the bunch are expecting very modest growth, even if there have been clear signs the UK labour market is doing better.
Barclays, which just last week quietly dropped its prediction that the Bank of England would cut Bank Rate further from a record low of 0.50 percent – despite having left it there for several years and making pretty clear it would be more of a hassle to cut it than to leave it alone – said on Thursday that more government bond purchases would no longer take place either.