Are we poised is to see the third leg of the credit crunch crisis?
After the initial credit crunch hit the US and began to spread around the world there was a period when many observers believed concerns had been overdone and the markets and economies around the world would return to "normal". However, we then saw a second leg which impacted upon the worldwide financial sector, stock markets, government budgets and other vital elements of "everyday life". However, there are growing concerns that we could be poised to see the third leg of the credit crunch hit the worldwide economy!
Earlier this week we saw concerns appear regarding the Greek economy, which has struggled due to the downturn, with a massive increase in the Greek government budget deficit. There is also the ongoing situation in Dubai which, despite government claims that it is "under control", still has some way to go before it is totally resolved. As a consequence, there is growing fear in the money markets that more governments around the world will struggle to raise funds needed to see them through the short to medium term, a time when the worldwide economy and local economies should start to turn the corner.
The danger is that if economies are starved of potential financial investment in the short term we could see a sharp U-turn and a further lurch downwards. This could literally push the worldwide economy into a depression, never mind a recession!
UK retail figures come under scrutiny
The Office for National statistics has come under a renewed attack today after releasing retail sales figures for November which showed a 0.3% rise in the month and a 1.5% rise over the year. This is totally at odds with the feel and appearance of the UK high street and has caused many to question whether these figures are in fact correct. This is not the first time that official statistics and fi...Read More
UK families and the £1250 a year tax rise to cover runaway government debt
A report by the Institute for Fiscal Studies (IFS) ahead of the government's budget on 22 April has highlighted the severe deterioration in the finances of the UK economy. The IFS believes that the UK government has yet to account for the losses to the tune of £130 billion from various funding arrangements with nationalised UK banks. As a consequence, the government will need to find around £39...Read More
Interest rates set to remain on hold
While the Bank of England often has a unique style of conveying its thoughts to the market, director Paul Tucker seems to be a little more forceful. He has come out to suggest that the Bank of England MPC (of which he is a member) will not be looking to reduce interest rates in the immediate future as inflation is still on 'amber'. His comments were gratefully accepted by the currency markets an...Read More
Could the problems of Greece have a domino effect in Europe?
Today's announcement that the Greek economy is in a very difficult situation to say the least has highlighted the fact that the financial blue skies which so many people see above them are still a long way away. The recent debt problem in Dubai would appear to have focused the minds of some people upon the fact that the worldwide economy may be recovering in general but there are still many econom...Read More
UK banks must be allowed to grow again
In what is turning out to be a significant flip-flop of government policy, Treasury Minister Lord Myners has today suggested that UK banks must be allowed to grow again so that they can compete on a worldwide stage. This comment, while aimed at the Conservative party policy of reducing the impact and strength of the UK banking sector, is totally at odds with earlier suggestions by both Alistair Da...Read More