Region’s firms are key to UK recovery

Spencer Dale

‘North-West has a relatively strong manufacturing base’ — Dale
INFLATION will fall back sharply next year, according to the Bank of England’s chief economist.

Spencer Dale made his prediction during a visit to Oldham yesterday — only 24 hours after the rate of consumer price inflation rose to 5.2 per cent.

It matched the record level set in September, 2008, and Mr Dale admitted a “dark cloud” is pushing on the UK and confidence had been dented.

Speaking to the Chronicle after meeting members of the Oldham Business Leadership Group at the Clough Manor Hotel, Denshaw, he said: “We should see a sharp fall back in inflation next year.

“As inflation falls back, the pain that many households have felt because of inflation rising more quickly than their earnings, some of that squeeze on households income should start to ease.”

Mr Dale, who is a member of the Monetary Policy Committee, which is responsible for setting interest rates, announced efforts to rebalance the economy were being hindered by slow growth in our main export markets. But he explained the UK economy was growing in the summer and he placed a strong element of that rise on the manufacturing sector in the North-West.

He said: “It had not been growing as quickly as we wanted it to grow, but it had been growing.

“A real key driver of that growth was the manufacturing sector, particularly that sector which we were exporting to the rest of the world.

“The North-West has a relatively strong manufacturing base and as a result of which, they have been in a perfect position to benefit from that.

“Over the last few months what has been going on in the rest of the world has started to dampen those prospects and the story I hear from businesses here, is they have been seeing a slowing and slight easing in export growth and they are less confident now than they what they were.”

Mr Dale’s Oldham visit was part of the MPC’s tour of the region.

He explained the visits act as “listening and learning” forums, which will be then reported back in London to the rest of the committee.