United Kingdom.

Temporary Slowdown in the United Kingdom In the United Kingdom, GDP growth will slacken to 1.7 percent in 2005, one reason being a more modest increase in household consumption. The slowdown will be temporary, however, and GDP will pick up again in 2006 and 2007 (see Diagram 49). The slower growth of consumption in 2005 will be due partly to a tightening of monetary policy beginning in the latter months of 2003 and extending through August 2004, when the policy interest rate (the base rate) was raised to 4.75 percent (see Diagram 50). The higher interest rates were a factor in slowing the ris...