Review of the UK economy in 2003.

During the year 2003 UK economic performance has been steady. Output growth has been positive and inflation has stayed within its target band. However, there are causes for concern in that growth has been below its long run average rate and inflation has crept above the central target rate of 2.5% per annum. The stock market has recovered somewhat since the sharp falls observed in 2001 and 2002 but is still some way below its previous high value. The international environment has remained volatile and has acted to increase uncertainty in the domestic economy. Finally, the government’s spending plans look set to create financing problems as low growth has led to lower than expected tax receipts.