Economic commentary

Quarterly Bulletin 1986 Q2
Published on 01 June 1986
  • The fall in oil prices has strengthened the down ward pressures on inflation among the major industrial countries.
  • Lower oil prices have improved the prospects for a resumption of economic growth, although there was a slowdown in the growth of industrial production among industrial countries in the first quarter.
  • The prospects for a more sustained period of growth have also been enhanced by the fall in the dollar and in interest rates in early 1986. But some risks remain, including protectionist pressures.
  • In the United Kingdom there has been a slowdown in the growth of output since the second quarter of 1985 and there has been a further rise in unemployment since the end of the year. But domestic spending continues to rise.
  • The growth of manufacturing productivity has slowed, reflecting slower growth of output. Unit wage costs continue to rise faster than those of our competitors.
  • There is likely to be a strong increase in real earnings this year, with the increase in retail prices falling to 2¾% at an annual rate in May and underlying earnings continuing to rise at 7½%.
  • The growth of liquidity remains strong, as the private sector continues to adjust to the improved availability of credit following the liberalisation of the financial system.

PDF Economic commentary

Other Quarterly Bulletin 1986 Q2 articles

Was this page useful?
Add your details...