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.
Central banks warned about complacency
A meeting of global leaders in Toronto has seen the emergence of a strongly worded warning to worldwide governments reminding them of the need to slash budgets and a future need to move base rates higher sooner or later. This warning is also aimed at central banks which are effectively independent operators who monitor local and global economies. So what does this warning mean? There is no doub...Read More
UK exports continue to grow
At a time when the UK economy needs all the help it can get the CBI has today revealed an increase in UK exports with weak sterling finally filtering through into the small business arena. More and more smaller businesses are reporting an increase in demand from overseas although there are concerns about profit margins being squeezed due to higher commodity and raw material prices. This is welc...Read More
IMF suggests worldwide GDP to fall by between 0.5% and 1.5%
The International Monetary Fund (IMF) is alleged to have collated data that shows that the worldwide economy would be shrink by between 0.5% and 1.5% as measured by GDP during 2009. The IMF then sees a gradual recovery in 2010 with the worldwide economy set to improve by between 1% and 2%. So what does this mean for the future?
While the worldwide fall of up to 1.5% in GDP is worryi...
Bank of England Set To Keep Rates At 5%
As we approach the next Bank of England MPC meeting there is literally no scope for the bank to change rates at the moment. As we have said on so many occasions, inflation is running away while the economy is literally crashing around our feet. Then we have the infamous split in the MPC with one member looking for a rate reduction, one for a rise and the rest looking for no change. Do not expec...Read More
Is The UK Now Suffering From Migrants Returning Home?
Over the last few years the subject of migrants flocking to the UK from the likes of Poland has been at the centre of much controversy and debate. When the UK economy was going well there were complaints that many of these new visitors to the UK were taking much needed employment and causing problems for the domestic work force. However, after a period of sustained growth for the UK economy it s...Read More