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Sterling has today picked up sharply after weeks and weeks of pressure and selling by investors. This comes just ahead of the MPC meeting to decide their next move on UK base rates and until just a...
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Tuesday 26th August 2008
A recent survey by the CBI has highlighted the fact that the UK economic slowdown is spreading to new areas of the economy. The professional services sector, which includes the likes of lawyers and accountants, is set to see profits fall over the next 12 months even though these are services which many thought to be more recession proof than most.
When you take into account that the slowdown is now hitting all areas of the UK economy and figures last Friday confirmed that the UK economy did not grow in the three months to June, it seems as though a recession has never been more inevitable. For every vaguely optimistic report we seem to see ten more which offer the now common doom and gloom scenario. There are more and more people concerned that the government and the Bank of England seem to be sitting on the fence, but what can they do?
There is no funding left in the public purse, interest rates cannot fall as inflation would receive a new boost, interest rates cannot rise as this would kill the economy and pay deals are coming in at around about the level of inflation and above. The UK has a very tricky situation to work through and it will take some time and involve a fair amount of pain! |
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