Bank of England Promotes "Cautious Optimism" Theme
The Bank of England's quarterly Inflation Report, published today, continues the "cautiously optimistic" tone that currently dominates the British economy.
Governor Mervyn Kings's opening address talked of a "more bouyant picture ahead" but it was tempered with a warning that businesses and households must continue to spend prudently.
The UK's rate of inflation has been and will remain volatile for some time, with the Bank expecting it to jump up in 2010 following the reintroduction of VAT at 17.5% and higher petrol costs.
The general tone the Bank's message is in line with what the British public want to hear - the worst is over. They'll tolerate the warnings about spending carefully, as long the consistent trail of economic bad news is coming to an end.
As if to confirm the Bank's words, the lastest unemployment figures, also released today, whispered the same cautious message. Yes, unemployment is still rising - to 7.7% of the working population. But the rate of increase has slowed to the lowest level for 18 months.
As ever, the public's confidence has a vital part of play in the economy. The Bank of England, like almost everyone else, doesn't want to dampen the glimmer of hope that's starting to shine through.