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Report
from the UK
Inflation surges in tandem with economic growth
The Bank of England has enough room to manoeuvre to allow interest rates to stay at 4.55%, according to Ernst and Young Item club. Consumers and the government would also put the brakes on growth as they cut back after years of heavy spending. The group also expects inflation to slip below government targets of 2%, which would make unnecessary raising interest rates. However, inflation has in fact risen, with the Consumer Price Index (CPI) surging to 2.5% in June from 2.2% in May, the
highest since 1997. The Retail Price Index (RPI) also rose from 3% to 3.3% in the same time period.
The UK economy grew at its fastest rate in two years in the second quarter of 2006 according to the Office of National Statistics (ONS). Growth came mainly from the service sector, but figures are likely to increase pressure on the Bank of England to raise interest rates, in spite of Ernst and Young¡¯s comments. The unemployment rate,measured by the Labour Force Survey, rose by 90,000 to 1.65 million or 5.4% of the work force in the three months to May, the highest since October 2000.
Mortgage lending rises to record level
Gross mortgage lending reached £32.2 billion in June, the highest monthly figure on record, according to the Council of Mortgage Lenders (CML). Furniture retailer MFI has sunk £45 million into the red and announced it could be about to sell off its stores. Furniture sales are forecast to remain slow until 2007, but higher inflation will draw in imports.
Supermarkets to use timber in new branch stores
Two supermarket groups are considering using timber in the construction of new stores in order to enhance their environmental credentials, TTJ reported. Asda and Tesco approached FinnForest Merk to discuss whether it can design, supply and install timber building methods for new supermarkets. Tesco is considering glulam for the structural and load-bearing elements and panel systems for the building envelope. Meanwhile, Asda wants timber instead of steel frames as well as panel systems for its new stores.
Report
from Netherlands
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