Bush Announces Mortgage Agreement The agreement would freeze interest rates for up to five years for some of the two million homeowners who bought houses recently with subprime loans.... Read Full Article Scientist At Work | John Holcomb: Army’s Aggressive Surgeon Is Too Aggressive For Some As head of the Army’s Institute of Surgical Research, Col. John Holcomb is working to change the way the military takes care of its wounded.... Read Full Article Gerber Recalls Cereals Gerber is recalling some of its baby food over a potential choking hazard.... Read Full Article Market Place: S.E.C. Changes Its Tune On Letting Foreign Securities Leave The S.E.C. plans to make it easier for foreign companies to withdraw their securities from U.S. markets, so long as those securities primarily trade overseas.... Read Full Article 3 Department Store Chains Exceed Estimates J. C. Penney, Kohl’s and Nordstrom reported first-quarter profits that surpassed estimates and they increased their full-year earnings forecasts.... Read Full Article |
Experts Challenge Brown Over Growth OutlookThe Chancellor’s decision to retain the Treasury’s existing assumption that the economy’s average, “trend” rate of growth over the long term will be 2.75 per cent, rather than to cut this to 2.5 per cent from next year, as previously planned, was challenged by leading economists in evidence given to the Commons Treasury Committee. The experts also questioned Mr Brown’s optimistic forecast for UK growth next year of at least 2.75 per cent, and as fast as 3.25 per cent. The Chancellor’s decision last week to continue to assume a faster “trend” growth rate of 2.75 per cent flatters the Treasury’s financial forecasts, but the move was justified by Mr Brown on the basis that strong inflows of migrants into Britain would keep boosting the size of the workforce in coming years, permitting faster growth of the economy without inflation. That analysis by the Treasury is backed by a number of City institutions, but it was challenged at yesterday’s post-Pre-Budget Report hearing. Martin Weale, director of the National Institute of Economic and Social Research (NIESR), said in a submission to the committee that the Chancellor’s “assumption that immigration will continue at the 2005 level is questionable”. “It seems most unlikely that these very high levels of immigration are going to continue, and, indeed, the policy with respect to Romania and Bulgaria is designed specifically to prevent this,” Mr Weale said. He added, however, that “only hindsight will tell whether the change to the trend (assumption) is justified”. Mr Weale also sounded a warning that while the Treasury was banking on the proceeds of strong inflows of foreign workers in boosting growth, it had taken no account of any potential extra costs imposed on public spending. Although the NIESR director noted that since many immigrants from Eastern Europe were young and this limited any cost to the taxpayer from their presence in Britain, he argued that it was “unlikely that there will be no upward pressure on public spending”. Mr Weale was joined by other economists in casting doubt on the Chancellor’s robust view of growth prospects for next year, with the expert panel voicing warnings that business investment, exports and consumer spending could all fall short of Mr Brown’s optimistic prognosis. Bridget Rosewell, of Volterra Consulting, said: “I think the nervousness of the consumer is still a particular issue.” 2.75%: The Treasurys new estimate of the future trend rate of growth Source: Pre-Budget Report 2006 Tag CloudExternal InformationAdditional InformationGoogle Hiring Engineers Abroad...Suits: This Time, Santa Has Been Too Naughty... H&R Block Is Shutting Lending Unit... Merck to Pay $671 Million in Settlement... Where Am I?News Main Page - Business - Experts Challenge Brown Over Growth Outlook |
i8news.com |