U.K. slightly more upbeat on economy
Even though the U.K. recession is over, a survey of business confidence is making some feel better about the current state of the economy. But it's not time for Britain to celebrate just yet. Stephen Beard reports.
City workers walk through London's Canary Wharf (Shaun Curry/AFP/Getty Images)
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TEXT OF STORY
Bill Radke: The Bank of England is expected to keep U.K. interest rates historically low today. They're at 0.5 percent, the tiniest in the bank's 315-year history. As Stephen Beard reports, there's some evidence these low rates are working.
Stephen Beard: Nobody says definitively that the British recession is over. Key indicators are still sending a mixed message. But there's been a flurry of excitement over one recent figure -- the PMI, or Purchasing Managers Index for the service sector. It's a survey of business confidence. After contracting for a year, this week it moved into positive territory.
George Buckley is with Deutsche Bank. He says it's just possible the U.K. economy may be already emerging from recession. However he warns it's far too early to celebrate.
George Buckley: We might see a very short period of economic growth, and then you start to see some sort of W-shaped recession. One way you think you're coming out but you go straight back in again and that's certainly a risk.
Analysts say that so great is the level of personal and public debt in Britain that the critical moment for the British economy will come when interest rates start to rise.
In London, this is Stephen Beard for Marketplace.
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