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.
When will we know the recession is over?
Industrial output figures for October were released today with many analysts dismayed by the lack of growth in the UK economy despite hopes that the final three months of 2009 would bring in a new era for the UK business arena. This now begs the question, when will we know the recession is actually over? We have seen many contradicting figures over the last few months indicating the UK economy...Read More
John Lewis announces a 13% fall in sales
Another day another downbeat report in the retail sector with retail bellwether John Lewis announcing a 13% fall in weekly sales compared to the same period last year. This comes on the back of last week's 14% reduction in sales and confirms what is an alarming trend on the high street. As Christmas approaches there are real worries about the financial standing of many well-known retail companies...Read More
Bank 'might cut rates again'
A further cut to interest rates from the Bank of England is expected later this week.Groups including the British Chamber of Commerce (BCC) believe that the Bank rate will be reduced from its current level of two per cent.The markets have priced in a 50 basis point reduction to 1.5 per cent - which would be the lowest official rate in the Bank's 300-year history.Reducing the Bank rate generally le...Read More
Alistair Darling is confident the UK has left the session, again!
Yet again Alistair Darling has suggested that the UK economy has left the recession behind and is now moving back towards a phase of economic growth. However, until we see the figures for the fourth quarter of 2009 many people are still sceptical because of past disappointments regarding economic data. Even if it looks, on the surface, as if the UK has pulled out of recession we do need to see col...Read More
Renewed rise in inflation puts pressure on savings
News this week that inflation has picked up to 1.5% from 1.1% has been broadly welcomed by analysts and researchers because ultimately it means in the short term that the UK economy is showing signs of life. However, putting aside the potential problem of increased inflation, there is also concern for those with significant savings in the UK who are currently attracting minimal interest rates....Read More