UK economy shrank .2 percent in the first quarter as per the number released by the Office of National Statistics (ONS). It is against consensus estimate of 0.1% growth and follows a negative growth of .3% in the final quarter of 2011. Latest figure is based on about 40% of the information it will be used to calculate the final number. Current number constitutes only the first estimate by the ONS.
David Miles from the Bank of England’s interest rate-setting Monetary Policy Committee said in an interview with Bloomberg on Tuesday that “it wouldn’t be a great surprise if the GDP number was a small negative number”.
But he added: “It’s perfectly possible to think that the underlying growth position of the economy is stronger than the headline GDP numbers. In fact, I think that’s probably true.”
On the other continent, US continues with its â€˜wait and watch policyâ€™ and making no changes in its monetary strategy.Â The central bank also did not change the forecast that â€œexceptionally low ratesâ€ will be here until late 2014. The officials said the economy is growing moderately and that the pace is likely to pick up in future.
â€œWe see monetary policy as being approximately in the right place at this point,â€ Federal Reserve Chairman Ben Bernanke told reporters at a press conference. He also mentioned, â€œOur intention is to maintain highly accommodative stance of policy for the foreseeable futureâ€.
News from UK and US were more or less on expected lines as all major economies of the world juggle between contraction and expansions.