While U.K still managed to get through the first quarter of this year without being severely hit from the worst financial crisis in the United States since the Great Depression and the worst housing trouble since early 1990s.

The U.K economy grew by 2.5 percent in the first quarter of 2008 slightly below the 2.6% expected by analysts and the prior estimate of 2.8%, while on the quarter the economy grew by 0.4% unchanged from median estimates and below the 0.6% reported for the last three months of 2007.

The slowdown in growth levels remains an issue for the BOE to deal with, yet rising inflation rates led the members of the MPC to disagree as the vote went 3 ways for the first time in almost two years, however the majority was for a quarter percentage point cut off interest rates to take it down to 5.00 percent.

The Services sector was a major concern for markets, yet it remained in the growing zone, while the manufacturing reported a better performance than the previous quarter, but the total production however declined in the first quarter of 2008.

While the Euro Zone released today the M3 money supply which rose in March on an annual basis by 10.3 percent below median estimates of 10.6% and the prior estimate of 11.3% which suggest easing inflationary pressures in the 15-nation economy, especially as the ECB are struggling to tame upside risks to inflation.

Mr. Trichet said yesterday that the current elevated levels of the Euro could affect Euro Zone growth, stressing that the current policy should be able to drag down inflation rates over the medium-term.

While the BOE are still struggling to find their balancing act between downside risks to growth and upside risks to inflation, their main focus remain on growth especially as they try to solve the ongoing freeze in the credit markets and providing more solutions for the U.K banks to help them weather the storm!

The general consensus in the markets remains hopeful that the US economy will be able to pick up sooner than expected, yet I'd say we should wait till the earnings season is over, as the current fundamentals are still not taking their effects properly, and improvement still seems to be far from here, and the journey still continues dear reader…