Mervyn King plays down the threat of inflation
Mervyn King, the governor of the Bank of England, has this evening played down the threat of inflation in the UK suggesting that inflation is just as likely to under shoot its target as to overshoot. This is the first major speech from Mervyn King since August and would appear to suggest, just prior to the issue of October MPC minutes, that there is some debate within the committee as to the direction of the UK economy.
Mervyn King has many months suggested that UK inflation is not a reliable measure of economic activity and the underlying strength of the UK economy. He has for some time believed that inflation will fall back to within the banks 2% target rate in the short to medium term without any major action from the authorities. Indications that the UK economy is beginning to weaken, after a period of relative buoyancy, would seem to support this belief although so far the figures have refused to fall into place.
The Bank of England is beginning to give the impression of a body which is frustrated by the relative strength of inflation despite numerous attempts to talk down the threat of inflation in the UK.
Gordon Brown urges banks to confirm losses
In a move which is sure to cause yet more friction between the government, UK banks and taxpayers Gordon Brown has come forward to suggest that the UK banking sector should be more forthright with confirmation of losses. If the government is aware that losses are being "hidden" or not disclosed in a forthright manner then why on earth have they already invested billions upon billions into the sect...Read More
UK base rates remain at 0.5%
Even though the vast majority of analysts had expected UK base rates remain at 0.5% after today's meeting, this is the 17th straight month in which UK base rates have remained unmoved. We are entering a very difficult situation for the UK government and the Bank of England because ultimately there is a need to reduce the budget deficit, feed liquidity requirements for the UK economy while also att...Read More
UK credit rating at risk
Standard and Poor's, one of the leading credit rating agencies, has today confirmed that the UK's Triple-A credit rating is in danger. In what could turn out to be a highly damaging revelation, Standard and Poor's is placing the UK credit rating on watch pending the outcome of the forthcoming election. The credit rating agency is waiting to see which political party gains power and what plans t...Read More
Has the UK pound risen too quickly?
The CBI has today revealed a significant falloff in export orders in the UK over the last four weeks due in the main to a recent bounce in the exchange rate of the UK pound against other leading currencies. As the UK pound fell more than 30% against the dollar many people had pinned their hopes on an eventual recovery in the UK being linked directly to the exchange rate. However, amid signs that t...Read More
CWU warns of more crippling strikes for UK post
The Communication Workers Union has today reiterated the fact that if talks do not resume after next week's planned strikes there will be further industrial action in the run-up to Christmas. While many people had expected a flurry of strikes as we approach the festive period, this is clarification that the union is starting to play hardball and looking for the UK government and Royal Mail managem...Read More