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.
British Airways strike to go ahead
After days and weeks of speculation regarding the Unite union's decision to ballot members on strike action, it has been confirmed that last-minute talks today have failed. While no details have been released, travellers can expect days of chaos ahead of, during and after the official strike action commences. This is a body blow for British Airways, and Gordon Brown will certainly be concerned abo...Read More
Pound under further pressure after short term rally fades
Sterling is today under further pressure after the short term rally over the last couple of days begins to fade amid concerns that the UK economy is struggling and interest rates are set to fall in the short term. After touching 98p to the euro just a few days ago there had been something of a short-term rally but even this is hitting the buffers as the realisation that the UK is in serious troubl...Read More
Sterling hits more trouble in the currency markets
The sterling exchange rate fell further today after a report by the Centre for Economics and Business Research suggested that UK interest rates could remain at 0.5% for another two years. There was also a suggestion that the sterling dollar exchange rate could fall to around $1.40 and the UK currency could potentially fall to parity with the euro.
Sentiment has turned sharply agains...
Unemployment reaches 11-year high
Unemployment in the UK has reached an 11-year high, totalling 1.82 million people, according to the Office for National Statistics.The unemployment rate increased by 0.4 per cent during the third quarter, equivalent to 140,000 people, to reach 5.8 per cent currently.An increase of 0.5 per cent in the rate, or 182,000 in the total, was recorded over the year.In terms of claimants, there was a rise...Read More
The power of deflation
At the moment inflation is around about 1% (as measured by the retail price index) which is well under the government's target of 2%. On the surface this may sound like good news, meaning that prices are increasing at a lower rate than expected, it could be the precursor to a serious bout of deflation which could literally push the UK economy into a depression and have serious implications for the...Read More