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.
Five buyers chasing every home in the UK
It has been revealed that on average there are five potential buyers chasing each and every home up for sale in the UK at the moment. While in a normal market this would be welcome news and see prices pushed further and further ahead, in this particular market, where transaction levels are still fairly low, many people are concerned that a bubble is brewing which could pop at any time. So what is...Read More
Can We Trust MPs To Look After Our Finances?
Over the last few months there has been a ground swell of support amongst MPs to increase their salaries to take into account a whole host of expenses which they look set to lose in the short term. There has even been talk of MPs being paid a bonus for attending the House of Commons, something which is totally unheard of in the private sector. So can we trust MPs to look after the public purse w...Read More
Is Alistair Darling putting the UK financial markets at risk?
A number of prominent tax experts in the UK have stepped forward to criticise Alistair Darling's "smash and grab" with the introduction of a new banking tax on financial sector bonuses. This is a situation which has been ongoing for some time, with both regulatory costs and tax costs increasing for financial firms in the UK, but one which is starting to affect the competitive edge of the UK financ...Read More
UK swine flu danger level increased
After reports that the two suspected swine flu outbreaks in Scotland have been confirmed the UK government has moved the danger level in the UK significantly higher. While there are no reasons for significant alarm the fact that swine flu has officially entered the UK, with a further suspected case in Manchester, is causing unrest amongst scientists and the government.
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Halifax attracts the wrath of UK consumers
The Halifax financial operation, now part of the Lloyds banking group, has today attracted significant criticism from the general financial sector as well as UK consumers. In response to the ever-changing banking arena, which has been heavily influenced by recent consumer crusades, the Halifax will from 6 December be charging each and every customer for various financial services which until now m...Read More