Education bill amendment calls for private schools which become academies to retain right to select pupils on ability MPs are preparing to vote over whether to increase the number of academically selective state schools. An amendment to the education bill, which will be debated in the Commons today, calls for independent schools to be allowed to keep the right to select pupils on ability if institutions opt out of the private sector and turn into academies. If MPs vote for the amendment, it will be included in the education bill and could eventually become enshrined in law. Selective state schools – or grammars – are a politically fraught topic for the coalition, in particular the Conservatives. Four years ago, a row broke out after David Willetts, then the Tory’s education spokesman, spoke out against grammar schools, arguing that they entrench disadvantage. David Cameron tried to calm a row that then ensued among Conservative MPs in favour of the schools. Cameron argued that the debate was “pointless”. He said history had shown that creating grammar schools was “extremely difficult and … often leads to them being very unpopular and they are then got rid of”. Graham Brady, Conservative MP for Altrincham and Sale West, resigned from the frontbench over Cameron’s comments. Last year, Brady asked Michael Gove, the education secretary, whether he would allow there to be more selective state schools where parents wanted it. Gove responded: “My foot is hovering over the pedal. I’ll have to see what my co-driver Nick Clegg has to say.” The amendment to the education bill was tabled by Brady and has the support of at least 38 Conservative MPs, including John Redwood and David Davis. The economic climate has made many parents decide against sending their children to private schools. Seven private schools have so far become academies. The number of private schools considering becoming academies is not known. There are 164 grammar schools in England. Anthony Seldon, master of Wellington college, said that becoming an academy would not be “the move of choice” for many, but that financially they may have no alternative. Andy Burnham, Labour’s shadow education secretary, described the amendment as an “audacious bid” to expand selection in state schools. “This reveals the Tory party’s true instincts on education – an ever more divided and elitist school system,” he said. “We know this is what Michael Gove wants too, but this blatant attempt by his backbenchers reveals that we are in a real battle to protect a fair education system. Labour is fighting for fair admissions for all families, while the Tory party are siding with the few not the many. The Lib Dems need to decide whose side they’re on.” The bill also gives headteachers greater powers to exclude violent and aggressive pupils and ensures heads have the final say on whether to expel a pupil from their school. At the moment, parents are allowed by law to appeal if their child is excluded and, if successful, can overturn a head’s decision. Other reforms contained in the bill give teachers new rights to search pupils for forbidden items, such as pornography, phones, video cameras or anything they believe might cause harm, and removes the requirement for teachers to give a day’s notice of a detention. A spokesman from the Department for Education said the government opposed Brady’s amendment. “We have no plans for more selective schools. If this amendment does go through, which we don’t think it will, it would be for the government to decide whether or not to allow an independent school to continue to select if they became an academy.” School admissions Schools Grammar schools Academies Education policy Liberal-Conservative coalition Jessica Shepherd guardian.co.uk
Continue reading …Education bill amendment calls for private schools which become academies to retain right to select pupils on ability MPs are preparing to vote over whether to increase the number of academically selective state schools. An amendment to the education bill, which will be debated in the Commons today, calls for independent schools to be allowed to keep the right to select pupils on ability if institutions opt out of the private sector and turn into academies. If MPs vote for the amendment, it will be included in the education bill and could eventually become enshrined in law. Selective state schools – or grammars – are a politically fraught topic for the coalition, in particular the Conservatives. Four years ago, a row broke out after David Willetts, then the Tory’s education spokesman, spoke out against grammar schools, arguing that they entrench disadvantage. David Cameron tried to calm a row that then ensued among Conservative MPs in favour of the schools. Cameron argued that the debate was “pointless”. He said history had shown that creating grammar schools was “extremely difficult and … often leads to them being very unpopular and they are then got rid of”. Graham Brady, Conservative MP for Altrincham and Sale West, resigned from the frontbench over Cameron’s comments. Last year, Brady asked Michael Gove, the education secretary, whether he would allow there to be more selective state schools where parents wanted it. Gove responded: “My foot is hovering over the pedal. I’ll have to see what my co-driver Nick Clegg has to say.” The amendment to the education bill was tabled by Brady and has the support of at least 38 Conservative MPs, including John Redwood and David Davis. The economic climate has made many parents decide against sending their children to private schools. Seven private schools have so far become academies. The number of private schools considering becoming academies is not known. There are 164 grammar schools in England. Anthony Seldon, master of Wellington college, said that becoming an academy would not be “the move of choice” for many, but that financially they may have no alternative. Andy Burnham, Labour’s shadow education secretary, described the amendment as an “audacious bid” to expand selection in state schools. “This reveals the Tory party’s true instincts on education – an ever more divided and elitist school system,” he said. “We know this is what Michael Gove wants too, but this blatant attempt by his backbenchers reveals that we are in a real battle to protect a fair education system. Labour is fighting for fair admissions for all families, while the Tory party are siding with the few not the many. The Lib Dems need to decide whose side they’re on.” The bill also gives headteachers greater powers to exclude violent and aggressive pupils and ensures heads have the final say on whether to expel a pupil from their school. At the moment, parents are allowed by law to appeal if their child is excluded and, if successful, can overturn a head’s decision. Other reforms contained in the bill give teachers new rights to search pupils for forbidden items, such as pornography, phones, video cameras or anything they believe might cause harm, and removes the requirement for teachers to give a day’s notice of a detention. A spokesman from the Department for Education said the government opposed Brady’s amendment. “We have no plans for more selective schools. If this amendment does go through, which we don’t think it will, it would be for the government to decide whether or not to allow an independent school to continue to select if they became an academy.” School admissions Schools Grammar schools Academies Education policy Liberal-Conservative coalition Jessica Shepherd guardian.co.uk
Continue reading …Education bill amendment calls for private schools which become academies to retain right to select pupils on ability MPs are preparing to vote over whether to increase the number of academically selective state schools. An amendment to the education bill, which will be debated in the Commons today, calls for independent schools to be allowed to keep the right to select pupils on ability if institutions opt out of the private sector and turn into academies. If MPs vote for the amendment, it will be included in the education bill and could eventually become enshrined in law. Selective state schools – or grammars – are a politically fraught topic for the coalition, in particular the Conservatives. Four years ago, a row broke out after David Willetts, then the Tory’s education spokesman, spoke out against grammar schools, arguing that they entrench disadvantage. David Cameron tried to calm a row that then ensued among Conservative MPs in favour of the schools. Cameron argued that the debate was “pointless”. He said history had shown that creating grammar schools was “extremely difficult and … often leads to them being very unpopular and they are then got rid of”. Graham Brady, Conservative MP for Altrincham and Sale West, resigned from the frontbench over Cameron’s comments. Last year, Brady asked Michael Gove, the education secretary, whether he would allow there to be more selective state schools where parents wanted it. Gove responded: “My foot is hovering over the pedal. I’ll have to see what my co-driver Nick Clegg has to say.” The amendment to the education bill was tabled by Brady and has the support of at least 38 Conservative MPs, including John Redwood and David Davis. The economic climate has made many parents decide against sending their children to private schools. Seven private schools have so far become academies. The number of private schools considering becoming academies is not known. There are 164 grammar schools in England. Anthony Seldon, master of Wellington college, said that becoming an academy would not be “the move of choice” for many, but that financially they may have no alternative. Andy Burnham, Labour’s shadow education secretary, described the amendment as an “audacious bid” to expand selection in state schools. “This reveals the Tory party’s true instincts on education – an ever more divided and elitist school system,” he said. “We know this is what Michael Gove wants too, but this blatant attempt by his backbenchers reveals that we are in a real battle to protect a fair education system. Labour is fighting for fair admissions for all families, while the Tory party are siding with the few not the many. The Lib Dems need to decide whose side they’re on.” The bill also gives headteachers greater powers to exclude violent and aggressive pupils and ensures heads have the final say on whether to expel a pupil from their school. At the moment, parents are allowed by law to appeal if their child is excluded and, if successful, can overturn a head’s decision. Other reforms contained in the bill give teachers new rights to search pupils for forbidden items, such as pornography, phones, video cameras or anything they believe might cause harm, and removes the requirement for teachers to give a day’s notice of a detention. A spokesman from the Department for Education said the government opposed Brady’s amendment. “We have no plans for more selective schools. If this amendment does go through, which we don’t think it will, it would be for the government to decide whether or not to allow an independent school to continue to select if they became an academy.” School admissions Schools Grammar schools Academies Education policy Liberal-Conservative coalition Jessica Shepherd guardian.co.uk
Continue reading …
• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …• UK economic growth likely to be just 1.7% in 2011 • Inflation likely to hit 5% in the coming months • Mervyn King admits outlook has darkened since last report The Bank of England has cut its growth forecasts for the UK economy and admitted that inflation will probably remain above the government’s target both this year and next. Governor Mervyn King said the short-term outlook for the UK had deteriorated since the Bank issued its quarterly inflation report in February. Inflation is now likely to hit 5% in the coming months, in a further blow to households. He insisted, though, that the medium-term “big picture” had not changed significantly. The Bank estimated that Britain will grow by around 1.7% during 2011, down from February’s forecast of 2% growth and in line with the latest forecasts from the independent Office for Budget Responsibility. In 2012, GDP is expected to be around 2.2%, down from an earlier estimate of close to 3%. This is weaker than the OBR forecast of 2.5% growth. On inflation, King said that higher commodity and import prices, and the increase in the standard rate of VAT, was pushing up the cost of living more rapidly than expected in February. He said that higher utility bills were likely to drive the consumer prices index (CPI) up to 5% this year. CPI, which fell back to 4% last month , was likely to remain above the 2% target until the end of 2012, the Bank predicted. Three months ago it had forecast that CPI would drop back to 2% next year . “There is a good chance that inflation will reach 5% later this year and it is more likely than not to remain above the 2% target throughout 2012, boosted by the increase in VAT, higher energy and import prices, and some rebuilding of companies’ margins,” said the Bank. King added that such forecasts contained “a great deal of uncertainty”, given the volatility of commodity prices. After the forecasts were drawn up, the Bank watched the oil price plunge by 10% last Friday, suggesting an easing of inflationary pressures, only for it to rally at the start of this week. The Report, published on the first anniversary of the formation of the UK coalition government, warned that its fiscal consolidation will continue to hinder economic growth over the next two years. Angela Eagle, Labour’s shadow chief secretary to the Treasury, argued that the new forecasts showed that George Osborne’s economic plan needed reworking. “This latest downgrade of the growth forecast from the Bank of England follows three downgrades by the Office for Budget Responsibility. A year ago the OBR was predicting growth of 2.6% under Labour’s plans, something which now looks like an impossible prospect,” said Eagle. “As the governor rightly noted, the UK economy is still 4% below the level it was at before the global financial crisis, while GDP in the US has now surpassed its pre-crisis peak.” UK growth looking weaker King predicted that the recovery from recession was also likely to be volatile, but his long-term view of economic growth prospects had not changed markedly. “The most likely outcome for growth in the medium term is somewhat weaker than in the February report, reflecting a delayed recovery in consumption and a less pronounced boost from net exports,” said King. “But the downside risk to that outcome is judged to be smaller than in February, so that from the two-year point of the forecast onwards, the average outcome, taking into account the balance of risks, is broadly unchanged.” The pound strengthened against the dollar after the report was published, gaining around half a cent to $1.646. Traders had expected that the Bank would cut its growth forecasts, especially after the UK economy grew by just 0.5% in the first three months of 2011 compared with the Bank’s forecast of a 0.8% expansion. Looking at inflation in the medium term, the Bank’s monetary policy committee believed that the chances of CPI being above or below target in the medium term were roughly equal. Some City economists said that there was now slightly more chance of the Bank raising borrowing costs during 2011. “The Bank of England’s inflation report suggests that in the Bank’s view, the market has perhaps gone a little too far in not expecting an interest rate rise this year. While lowering their growth forecast, the BoE have actually increased their CPI profile,” said James Knightley of ING. “As for the growth view, they remain above consensus and state that ‘business surveys and the growth in employment over recent months suggest that underlying activity may have been stronger than indicated by official output data’,” Knightley added. Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club, described the Inflation Report as “relatively dovish”. “The changes to the forecasts look eminently sensible in the context of the sharp rises in energy prices since the February forecast. The forecast remains very much a story of short-term pressures from commodities, but very subdued underlying pressures dragging down inflation over the medium term,” Goodwin commented. Economic growth (GDP) Bank of England Inflation Economics Interest rates Mervyn King Graeme Wearden guardian.co.uk
Continue reading …CBS Finds Sympathetic College Student to Use to Promote Obama’s Push for ‘Dream Act’
May 11, 2011 No Comment
Pedro Ramirez knows his “future depends on” President Barack Obama’s success in passing “immigration reform,” specifically the “Dream Act,” CBS’s John Blackstone asserted in a Tuesday night story which corroborated the need for Obama’s quest by holding up Ramirez as an innocent victim. “He is student body president at California State University at Fresno where he'll graduate this month following years of accomplishment,” Blackstone heralded, “until his parents admitted to him they've been living here illegally since he was three years old. Last year he joined other young undocumented immigrants pushing for passage of the Dream Act. It would award legal residency to children brought to America before they were 16 as long as they graduate from high school and go on to college or the military.” Linking Ramirez’s plight to Obama’s policy solution, Blackstone asserted: “On the Texas border today, the President called for those who want immigration reform to help push an entrenched Congress.” CBS News political analyst John Dickerson soon helpfully pointed out: “The most specific thing the President can talk about at the moment is how much tougher he's been on illegal immigrants than in previous administrations.” Blackstone concluded: “Meanwhile, in the next few weeks some 65,000 students who came here illegally as children will graduate from high school, but for now they'll face a life in the shadows in America.”
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