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.
Sainsbury's surprises on the upside
Half-year profits from supermarket giant Sainsbury's today surprised many analysts with pre-tax profits for the period up to £342 million from £258 million during the corresponding period last year. The company also announced sales growth of 3.7% to £11.15 billion however, when excluding fuel sales this figure is a very impressive 7.9% and reflects the growing status which Sainsbury's has in th...Read More
Zavvi calls in restructuring team from Ernst and Young
Zavvi, formerly the Virgin Megastore, has today called in a corporate restructuring team from accounting specialist Ernst & Young as the demise of Woolworths and its Entertainment UK division continues to send tremors through the high street. As we covered recently, Zavvi was forced to suspend online sales of DVDs, CDs and games due to the demise of the Entertainment UK division of Woolworths whic...Read More
UK unemployment at 1.7 million
The number of unemployed people in Britain has risen by more than 100,000 since the beginning of 2007 to reach a total of 1.7 million.According to official government figures, the unemployment rate over the last quarter was up 0.3 per cent on last year at 5.5 per cent, with 13,000 extra jobless people recorded between January and March.But the Office for National Statistics (ONS) says that the num...Read More
Scottish executive under pressure as more job losses announced
When contact lens maker Bausch and Lomb today announced 500 job losses in West Lothian it is clear that nobody in the Scottish parliament expected this. The company is effectively transferring production from West Lothian to the US and Ireland as it looks to consolidate in these difficult economic times. However, a number of Scottish MPs are now calling on the Scottish executive to step in again a...Read More
Independent Scotland may face everyday price increases
12/09/2014 If Scotland votes yes in the upcoming independence referendum many business have advised that they may have to increase prices of goods and services in Scotland. The phone networks BT, EE, O2, TalkTalk and Vodafone are in talks about a joint statement which would refer to "the inevitability of cost increases" for operators . The shops John Lewis, Waitrose and Asda have also sa...Read More