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.
Bank Of England Balance Sheet To Be Released
The Bank of England will tomorrow release its balance sheet for the year ended 31st March 2008 and it should make very interesting reading after the last 12 months. There is already speculation regarding the level of debt owed by Northern Rock with figures expected to show that even in the current environment the groups has increased payments and is now down to around £19 billion. However, most...Read More
When Charity Begins At Home
When organisers of the Absolute Return for Kids (Ark) charity dinner sat down to discuss their hopes for the event, they were forced to scale down their target from the £28 million raised last year to a ‘mere’ £15 million. However, on the night the dinner managed to raise a mighty impressive £25 million, at an event where tickets cost a staggering £10,000 each.
Economic experts demand rate cut to 2%
As we near D-day for the next possible reduction in UK interest rates many experts are now forecasting a fall to 2% in order to try and refloat the UK economy. The Bank of England appears to have taken on a totally alien strategy over the last few weeks and has been more susceptible to suggestions from third parties and the government.
While there has been some criticism about the a...
National Sickie day to cost £30 million!
The number of people calling in sick today is expected to peak at 350,000 on what employers are calling National Sickie day. It is unclear exactly why so many people are expected to call in sick today for what is clear is that it is set to cost UK businesses around £30 million! The survey also found that many employers in the UK are now accepting communication via e-mail and text rather than t...Read More
UK GDP Contracts, as Triple-Dip Threatens
The UK economy shrank by 0.3pc in the last four months of 2012, making the possibility of entering into recession for the third time since 2007 all the more likely. The Office for National Statistics (ONS) said that the fall in GDP was most likely down to a reduced output from the North Sea and manufacturers. This comes as a massive blow to the coalition government, who just three months ago we...Read More