The Bank of England has recently decided to maintain the interest rates at their present level.
Following this, the head of Central London commercial research, James Roberts, said that he would have preferred to see the Bank take a more cautious, wait-and-see approach in order to further advance the Quantitative Easing, as the actual condition of the UK economy still seems uncertain.
Last month, the first estimate of Q3 GDP was released which was based on 44% hard data and 56% computer forecasts.
However, The possibility that those computer forecasts are backwards looking should not be ignored. This may indicate that when more real data becomes available, the figures are revised upwards.
It has been seen that in the last ten years, on five different occasions, the GDP figures have increased between the first estimate and final data by a level sufficient to wipe out the Q3 contraction.
In any case, it seems impractical to consider that a trading nation like the UK could still be in recession when its largest trading partners are expanding again?
The London office market has shown some improvement, as the Q3 figures were relatively good.
But the long-term risk of unnecessary further stimulus advancing into the London economy is still there, together with inflationary consequences that will have to be faced later.
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