Report likely to see growth trimmed back
Feb 8 2010 by Peter McCusker, The Journal
The forecasts could show a bigger spike for inflation than previously thought in the first half of 2010 before the slack in the economy opened up by the slump brings prices back down.
This has caused some twitchiness among the more hawkish members of the committee, with some hinting at a tightening of policy sooner rather than later.
The Governor warned in January the patience of UK households would be “sorely tried“ in the months ahead by the temporary impact of the inflation spike, with the outlook for wage growth minimal.
But the Bank is also likely to stress again next week the extraordinary level of uncertainty over its forecasts - not just over the strength of the recovery but by the level of Government belt-tightening following the general election.
Travel giants Thomas Cook and Thomson Holidays owner TUI Travel will go head to head in trading updates next week with the focus on prospects for the all-important summer season.
TUI - first up on Tuesday - said in December that demand for summer holidays this year had held up despite “exceptional fuel and currency driven cost inflation“ as well as lingering economic gloom.
The firm, which owns First Choice, was also pleased with early booking patterns for the summer, as hard-pressed consumers cling to holiday plans. Thomas Cook, which posts first quarter results on Thursday, also said in November that summer bookings were on track and cheered the City with better than expected profits of £308m.
The firm, which carries around six million UK holidaymakers a year, expects “continued strong growth“ from destinations such as Turkey and Egypt as customers shun eurozone countries due to the weakness of the pound.
Mr Ellis added: “We believe that, whilst the consumer outlook remains uncertain, demand has held up well and that the summer vacation remains a priority consumer purchase: consequently we expect a positive update.
Telecoms giant BT has already boosted market hopes ahead of its third quarter results on Thursday, having recently upped full-year revenues guidance.
