BoE to give steady growth for Britain as Bank says sluggish start to the year just a blip

GDP has bounced back following the slow start to the year, which saw growth in the first three months slow from 0.7 per cent in 2016 to 0.3 per cent this year.

And the UK has seen a rise in employment combined with strong business surveys, which helped to convince economists that poor numbers seen in the first quarter of 2017 were just a blip.

Independent economists have now increased forecasts for the year ahead – raising their GDP predictions from 1.6 per cent to 1.7 per cent.

And the BoE is expected to predict steady growth for the UK despite concerns Brexit could have dramatically hit the UK economy after the June 23 vote last year.

Mark Carney will present the latest Inflation Report on Thursday, revealing a document which shows the Bank’s latest growth and inflation predictions as well as outlining any risks to the economy.

But he is also expected to announce that he will leave interest rates untouched from its current 0.25 per cent rate.

Pressure has continued to grow over calls for the Bank to adopt a tighter monetary policy by raising interest rates, with external member Kristin Forbes voting at the last meeting for a 0.25 per cent hike.

But the committee voted eight to one to maintain the current level, which was cut last August from 0.5 per cent in response to the Brexit vote.

The difficulty of analysing the state of the economy was highlighted today following the release of two conflicting sets of data.

According to Visa’s consumer spending index, household spending growth slowed last month before rising by just 0.5 per cent in April compared with the same period in 2016.

The figures are down from one per cent in the 12 months to March and experts claim the rate is one of the slowest seen in three years.

But by contrast, the Institute of Chartered Accountants in England and Wales’s (ICAEW) index monitoring sentiment shows business confidence is on the rise – the first time since the middle of 2016.

ICAEW’s director of business Stephen Ibbotson said: “It’s encouraging to see that confidence is starting to rise after a sustained period of decline.

“Yet against this improved sentiment, businesses are not investing in staff and wages and may well be waiting to see what happens in the political arena, particularly in relation to how EU negotiations play out.”