The MPC was confident that the Q1 dip in growth was purely temporary and that much of it would be revised away. The backcast (the Bank’s forecast of what will be the final estimate of GDP for each quarter) shows Q1 growth at 0.5% compared to the ONS first estimate of 0.3%.Moreover, to support its bullish view, the MPC cites the strength of consumer confidence, especially in terms of plans for large purchases, which now even exceeds 2007 levels. Also, investment intentions, whilst weakening are still above the long term average. Growth has been revised down by roughly 0.3pp each year.
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