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 would be left for the Bank of England if stripped of power?
With the Labour government set to think the unthinkable and strip the Bank of England of key powers with regard to the regulation and operation of the financial sector, many are now asking what would be left for the Bank of England if this were to happen. This is a bank which has been central to the UK financial system and overall economy for hundreds of years and a bank which has a reputation unr...Read More
What Other Tools Do The MPC Have At Their Disposal?
While many countries around the world have a number of tools at their disposal with regards to kick starting an economy, the UK way has always been to use the stick of interest rates to beat life into or slow down the economy. But what other options do they have at their disposal?
Aside from interest rates the main tool the Bank of England has is the ability to increase and reduce...
Will the Bank of England revamp its quantitative easing programme?
Tomorrow's meeting of the monetary policy committee could be one of the more eventful of recent times with opinion split as to whether the Bank of England will inject more money into the quantitative easing programme or let it run its course when it hits £200 billion limit. The "clever money" would appear to be on a suspension or closure of the quantitative easing programme although there are con...Read More
Corporate failures still a worry in the north-west
It has been revealed today that 245 companies in the north-west of England failed in February against 290 in the corresponding month in 2009. While this is a significant 15.5% reduction in corporate failures, the figures are still way too high and very uncomfortable for businesses and banks in the region. The rate of corporate failures in the north-west of England is the highest outside of London...Read More
Euro under pressure as dollar heads higher
As the situation in Greece, Portugal, Spain and other Eurozone economies continue to worsen there is increasing pressure on the Eurozone which has seen the dollar and sterling move higher. Despite the fact that the euro was put forward by many as the future "golden currency" it has come in for severe criticism and severe pressure over the last few days. There are serious concerns that Greece, P...Read More