Economic commentary

Quarterly Bulletin 1987 Q4
Published on 01 December 1987
  • Share prices have fallen sharply on the world's major stock markets since mid-October. The Federal Reserve indicated its readiness to increase liquidity; interest rates have fallen, including cuts in UK base rates to 9%. The dollar weakened towards the end of the month.

  • Until the fall in share prices, there had been an increase in long-term interest rates among the major overseas countries, partly reflecting a rise in inflation. Some firming of short-term rates was associated with tighter monetary conditions.

  • Growth remained moderate overall among the major overseas countries in the first half with robust growth in the United States, Canada and Japan and weak growth in continental Europe.

  • The United Kingdom is one of the fastest growing economies among the major industrial countries. GDP rose by almost 4% in the year to the second quarter.

  • The growth of manufacturing output has been particularly strong and has been accompanied by higher productivity. There was a further rise in capacity utilisation, according to the latest CBI survey.

  • In the second quarter, all elements of private demand rose; consumer spending rose further in the third quarter. The strength of demand contributed to a deterioration in the visible trade deficit in the second and third quarters.

PDFEconomic commentary

Other Quarterly Bulletin 1987 Q4 articles

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