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.
What will happen to the UK currency in the short to medium term?
As the UK economy is officially in recession there are serious concerns about the future direction of the UK currency. As UK national continues to move higher and higher, with some experts suggesting it will end up anywhere between £1 trillion and £3 trillion, domestic and overseas investors seem set to shun the UK for the foreseeable future. It has also been revealed that an influential select...Read More
Stronger focus urged to help rural poor
Calls are being made for greater help to be extended to poorer communities in rural areas, amid concerns that rural regions in developing countries are being neglected with regard to ongoing aid efforts.A new report from the National Audit Office (NAO) makes the point that rural poverty must be a key area of focus in tackling poverty if the Department for International Development (DFID) is to mee...Read More
Is deflation still a major problem?
Only a few days ago the inflation figures surprised on the upside and many analysts believed this was the beginning of the end of the recession. However, today's release of the August monetary policy committee notes suggest that Mervyn King, and two other members of the MPC, believe the economy is still struggling and deflation could be a major problem in the weeks and months ahead.
EBRD revises its forecast for emerging European economies
The European Bank for Reconstruction and Development (EBRD) has today reduced its forecast for GDP growth within the emerging European economies for 2010 and 2011. It would appear that austerity measures taken by various governments around Europe will have a major impact upon the short to medium term performance of economies and could indeed push some economies back into recession. The EBRD has...Read More
Federal Reserve ready to act if necessary
Even though the US Federal Reserve has confirmed there are no imminent plans to provide additional support for the US economy chairman Ben S Bernanke today confirmed that the authorities are ready to act as and when required. While the US Federal Reserve has no current plans to provide additional finance to the markets it is the very fact that it is being considered which has spooked some investor...Read More