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.
G20 leaders promise $1.1 trillion of additional finance
The G20 summit in London surprised many with confirmation that a $1.1 trillion rescue package will be made available in the short to medium term. Interestingly, G20 members have agreed to make additional finance available to the International Monetary Fund which will now have around $750 billion to "play with". There is also $250 billion of emergency aid available to emerging countries, an extra $...Read More
Childcare costs spiral for families
29/12/2014 Research from insurance giant Aviva shows that one in ten UK families see one parents wages go entirely toward childcare and commuting costs. About 43% of people use childcare to enable them to go back to work, but the report concluded that juggling the costs of childcare is proving frustrating for parents. Business leaders have now called for the government to take action to c...Read More
Bank holds interest rates
The Bank of England has held interest rates at 5.5 per cent.Following May's quarter-point hike to the current base rate, the monetary policy committee (MPC) approved the hold in their June meeting earlier today.The decision comes as no surprise to analysts, who have pointed out the significant psychological impact two successive rate hikes would have on consumers' spending. Two years have passed s...Read More
Kraft Foods encouraged to increase Cadbury offer
Despite the fact that the Cadbury board has refused to even contemplate a bid from Kraft Foods, currently pitched around £7.50 a share, it seems as though investors in the UK chocolate giant are more than happy to talk numbers. At a time when the Cadbury's directors are looking towards the takeover panel to issue a "put up or shut up" notice to Kraft Foods, institutional investors have made it kn...Read More
Johnston Press breaks the mould
Johnston Press has broken away from the general news sector with confirmation that the company will be charging readers for access to various news channels within its local and national titles. The Worksop Guardian, the Ripley & Heanor News and the Northumberland Gazette are part of a pilot scheme to charge readers five pound for a three month subscription or else direct them to buy the newspapers...Read More