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.
South West trains announces 480 job cuts
The unions are this evening outraged at plans to axe 480 jobs with South West trains only days after the company announced substantial fare increases for passengers. There is concern that the rail providers are using the current downturn as a way to trim their costs and trim their staff numbers when in reality they are faring better than average.
It is also worth reminding ourselves...
German authorities back Greek bailout plan
The German authorities have today stepped forward to confirm that while the Greek authorities have yet to take up the offer of the European Union and International Monetary Fund bailout package the offer is still there in the background. The Greek government confounded many sceptics by rejecting the latest offer with the government now looking to refinance debts in the short-term without taking on...Read More
Retail spending increased in July
Despite the fact that there is doom and gloom surrounding the UK economy and more recently we saw downbeat comments from a number of leading retailers, retail spending actually increased by 1.1% in July. While there is no doubt that the World Cup and warmer weather did have an impact upon consumer spending in July, if we look below the line the situation is maybe not as upbeat as it could be? E...Read More
Fourth-quarter economic data disappoints market
While strictly speaking the UK economy has now moved out of recession, unless the figures released by the Office for National Statistics are amended down over the next few weeks, the improvement of 0.1% was far short of the 0.4% expansion expected by analysts. This indicates that the UK economic upturn is far weaker than even the most pessimistic of analysts had expected and a small revision by th...Read More
Are we on the verge of significant job cuts in the public sector?
A report issued today would appear to confirm that the UK public sector, a sector which has mushroomed in size over the last few years, is set to be slashed over the coming 12 months with one in three public sector companies looking to reduce their workforce. Despite the fact that the UK government is arguing that investment in the public sector should be maintained and increased as the UK pulls a...Read More