Interest rate pressure eases

Date: 06 December 2006   |   Author: Rupert Saunders

The acceptance of a faster economic growth rate will reduce the pressure on the Bank of England Monetary Policy Committee to raise interest rates.

However, UK inflation in October remained at 2.4% - well ahead of the 2.0% target that the Bank is supposed to maintain. Increases in university fees were offset by falling fuel prices.

Other economic highlights of the Chancellor's speech included:

• Budget deficit reducing and in surplus by 2011 (deficit and debt lower than our competitors; no further borrowing necessary to pay for extra spending)
• Greater sale of Government assets, such as land and buildings, to be examined
• Greater enforcement of minimum wage (50% increase in enforcement budget)
• Greater investment in education (90% of adults with 5 or more GCSEs by 2020; 4m adults with A-level or equivalent by 2020)
• Sir Digby Jones to advise government on greater employer investment in employee training
• Investment in transport will reach £9.6bn next year (Government to consult of new planning authority for infrastructure projects)

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