The Bank of England has lowered its economic growth forecast for next year, warning that Britain faces a “choppy recovery” amid great uncertainty about the outlook for the US and the eurozone.
The downbeat assessment from the British central bank yesterday echoes warnings from the US Federal Reserve that the pace of economic recovery is slowing — raising fears about a double dip recession.
“It will take many years before bank balance sheets and fiscal positions return to anything like normal,” said bank Governor Mervyn King, after unveiling the Bank of England’s latest quarterly report.
The British central bank now expects GDP growth to peak at about 3 percent annually — down from its forecast in May of 3.4 percent growth — and predicts that inflation will stay above its 2 percent target until the end of next year.
However, it adds that inflation is likely to fall below that target in 2012, to about 1.5 percent, even if the bank raised interest rates from their current record low, signaling that the British economy may need more emergency stimulus.
Britain’s top shares were sharply lower at midday yesterday, as banks led a broad-based sell-off after the Bank of England inflation report echoed worries in the US over the economic recovery.
By 10:46am, the FTSE 100 index was down 85.86 points, or 1.6 percent, at 5,290.55, having shed 0.6 percent to 5,376.41 on Tuesday. Lloyds Banking Group, Barclays and Royal Bank of Scotland fell 3 to 3.6 percent.
“Markets have been struggling to see the positives for the last few days and they have looked vulnerable ... What we have seen in the last 24 hours has added to concerns that the stock market recovery has got ahead of the real recovery,” chief market strategist at IG Index David Jones said.
The British central bank’s change in outlook from just a few months ago reflects a weakening in consumer confidence, the persistence of tight credit conditions and faster fiscal consolidation via government spending cuts.
Britain has experienced a change in government since the bank’s last quarterly report, with the new Conservative-led coalition making it a priority to lower the country’s massive budget deficit via spending constraints. Its plans to raise the consumer sales tax from the start of next year are a key factor in the revision of the forecasts.
“The overall outlook is weaker than that presented in the May inflation report,” King said. “Business and consumer sentiment have shown signs of softening, measures of financial fragility remain elevated and there is great uncertainty about the outlook for both the United States and our most important trading partner, the euro area.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day