Is inflation a threat to the UK recovery?
This week sees a number of vital economic statistics in the UK with concerns that the rate of inflation is set to spike upwards in the early part of 2010. Recent figures have shown an increase in the cost of raw materials, much of which came from the upward movement in the price of oil, which will have an impact upon inflation. So what else do we need to monitor in the short term?
There is also concern that the government's refusal to maintain VAT at 15%, and instead return it to 17.5%, will also place further upward pressure on the cost of living in the UK. In what is becoming a more difficult scenario by the day, the Bank of England is also under pressure because of the strategy regarding UK base rates which have remained at 0.5% for some time. If inflation does begin to take off, and the Bank of England does not respond quickly enough, we could move towards a situation where the rate of inflation spirals out of control and we need to see a significant increase in base rates in a very short space of time.
The ability to increase base rates and make borrowing more expensive is a very basic tool in the economic UK government's toolbox but one which has proven very effective over the years.
Recession in Britain set to last 18 months
City analysts today warned the government that the British economy is set to witness a recession which could last up to 18 months. Capital Economics predicts that the gross domestic product for the UK will fall for the first time since the recession of 1990, down by 0.2%. However, it has also been warned that these predictions may be fairly conservative ones - with analysts preparing for even larg...Read More
Interest rates expected to remain unchanged
Analysts are predicting a decrease in interest rates - but not until February at the earliest.A poll of experts has suggested that the Bank of England's monetary policy committee (MPC) will not lower the base rate when it announces its monthly decision this month, with most people expecting it to keep interest rates at their current level.Last month, the MPC lowered the base rate by 0.25 per cent...Read More
Government introduces further air passenger taxes
The UK government has received a stinging rebuke from the airline industry as we approach 1 November, the day when the UK government introduces yet more passenger taxes. Under the new regime a family of four travelling to Kenya, Thailand or South Africa would be forced to pay an additional £200 on top of the price of their tickets due to the increased taxation.
Various changes to t...
Why is Gordon Brown suddenly the pariah of Europe?
As the worldwide economy entered what has been one of the most difficult recessions in living memory, Gordon Brown suddenly sprung up as a well-respected and renowned statesmen. His revolutionary policy to spend, spend, spend his way out of the UK recession was followed by many in Europe and looked upon favourably by other developed and developing countries. However, over the last few weeks Gordon...Read More
SFO looking for talks with BAE Systems
The Serious Fraud Office has this evening offered to talk with BAE Systems regarding bribery allegations in a last ditch attempt to avoid what could be a very embarrassing court case for all players involved. As we mentioned last become, BAE Systems is being taken to court by the Serious Fraud Office (SFO) years after allegations of bribery and corruption materialised in the Middle East.