There are more questions than answers...

At the tail end of 2010 the economy slowed. Various pundits have put this down to the amount of snow and ice in December - I don't know how many of you spotted one or two car manufacturers were quick off the mark in taking the opportunity to offer the fitment of winter tyres to your cars?  Anyway, I digress.  Recent headlines suggest that the UK economy has shown signs of further recovery during the first quarter of this year with retail sales rising unexpectedly during March.

 

This has raised hopes of a decent pick up of GDP in the first quarter, the results of which are due at the end of April.  This, in turn will have an impact in determining when the Bank of England goes about raising interest rates.  Some experts continue to speculate that a rate rise will happen in May, while others seem to be erring towards August. 

 

Although there has been the above mentioned rise in retail sales during March, the first three months of the year have in fact been relatively slow.  In fact, in recent news headlines, we have seen various retailers saying that trading conditions remain slow, and very recently; big hitter Dixons issuing a profit warning.

 

Clearly, the decision on interest rates is critical.  The question is when (I doubt it's if) they rise, what will be the effect on businesses - big and small, short and long term?