Spain suffers cut from Standard and Poor's
Credit rating agency Standard and Poor's has today reduced the credit rating on Spanish national debt from AAA to AA. This is a major blow for the Spanish economy and the Spanish government and comes amid signs that the Greece debacle is now affecting other European economies. Yesterday we saw Portugal suffer the indignity of a credit rating downgrade and experts believe more downgrades are on the way.
The ongoing problems within the Eurozone have impacted upon the euro itself which has come under significant selling pressure over the last few days. Despite the fact that only a few days ago it looked highly unlikely that any European country would default on its national debt, the chances of this happening have increased dramatically over the last 48 hours. There is also concern that the global economy could be impacted by the debt problems within Europe and we could move back towards another worldwide economic downturn.
Even though the UK stock market was fairly steady today, compared to yesterday, we did see significant falls in France, Germany and Spain and there is growing concern amongst investors. Despite the fact that the German authorities appear to have been dragging their heels regarding a solution for the Greek debt problem, it was the German government who today called for a "speeding up" of negotiations between the Greek government, the IMF and the European Union.
If the fall in the pound is correct has the currency been overvalued for years?
While the fall in the rate of sterling against the euro has caught the headlines the currency has also fallen against the likes of the dollar which has serious implications for both import and export businesses in the UK. However, many people are now wondering, as the currency continues to collapse against the leading currencies of the world, has sterling been overrated and overvalued for many yea...Read More
Alistair Darling admits unemployment will rise further
In a serious blast of reality for those looking at the UK economy through "rose tinted glasses" even Alistair Darling has admitted that unemployment is set to increase for some time yet. Unemployment hit 2.2 million last month which is the highest level since Labour came to power in 1997 although many believe this could be just the tip of the iceberg.
While Alistair Darling was unwi...
Where next for UK base rates?
Despite the fact that many experts, only a few weeks ago, still believed that UK base rates would bottom out at 0% it now appears as though the Bank of England's Monetary Policy Committee (MPC) is set to take a pause this month. It would seem that the introduction of quantitative easing and the apparent threat that inflation could rise substantially in the medium to longer term will see UK base ra...Read More
Why are consumers so mixed in their views on the future?
If anything, the last six months has shown how difficult it is to forecast the future direction of the UK economy with any certainty. Consumer spending has on the whole fallen sharply over the last few months yet there were pockets when it appeared a recovery may just be around the corner. However, today's survey from the CBI suggests that the UK high street is again suffering from a slump in sale...Read More
Retail spending increased in July
Despite the fact that there is doom and gloom surrounding the UK economy and more recently we saw downbeat comments from a number of leading retailers, retail spending actually increased by 1.1% in July. While there is no doubt that the World Cup and warmer weather did have an impact upon consumer spending in July, if we look below the line the situation is maybe not as upbeat as it could be? E...Read More