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.
What could we expect from a Conservative government?
As rumours continue to circulate around Westminster that Gordon Brown is set to announce a snap election in March, thoughts are now moving forward to next year and the potential for a Conservative government. What can we expect from the new Conservative party? Will it be any different from the Labour Party? The truth is that whichever party wins the next election, or gains minority control of t...Read More
Couple plan cut-price 'credit crunch wedding'
A credit crunch-hit Devon couple have not let the financial crisis derail their wedding plans.Instead, Christopher May and Odette Fenwick will go ahead with the ceremony next weekend on a budget of just £500, the Daily Mail reports.The tight-fisted twosome are spending just £40 on the buffet, while 19-year-old Odette's wedding dress is setting her back just £52.A bargain bucket £43.50 civil ce...Read More
Gordon Brown announces 100,000 new jobs in the public sector
If this headline looks familiar it is because this is a rehash of an announcement made weeks ago regarding the rescheduling of many public sector projects including the building of schools, housing and various environmental programs. Gordon Brown has finally put some meat on the bone of this idea with today's confirmation of the program which is expected to require billions of pounds of UK taxpaye...Read More
UK retail sales stagnant in September
In a disappointing development for those who believe the UK recession is now over it has been revealed that UK retail sales were stagnant in September with consumer spending less on food and clothing as they continue to tighten their belts and save as much money as possible. While this is the second month of stagnation in retail sales, after a number of better-than-expected figures in previous mon...Read More
Ellesmere Port and the fears for Vauxhall
The Vauxhall operation at Ellesmere Port in the north-west of England appears under serious threat as the UK car market continues to fall to new lows. As we covered in one of our earlier articles the car manufacturing industry as a whole has written to the Treasury requesting assistance in the short term in the form of financial borrowings.
While these demands are likely to be ignor...