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.
Woolworths stores close for the last time
Today we have seen 200 Woolworths stores close forever as the wind-down of one of the U.K.'s best known retail chains continues at pace. Just under one quarter of the overall group has now been closed with the final 600 stores set to close over the next two weeks. This marks a sad day for the UK retail sector with one of the U.K.'s oldest retail businesses set to disappear forever. While debts of...Read More
IMF concerned about US economy
The International Monetary Fund (IMF) has today issued a rather downbeat assessment of the US economy and in particular the US budget deficit. In a direct appeal to the US government, the IMF believes it is now time to increase taxes in the US and reduce social security benefits as a way of reining in what is a significant budget deficit. There is also the problem of public debt which is beginning...Read More
Has Gordon Brown saved his skin?
As the PM stood up to deliver what had to be the speech of his life he must have known from an early stage that he had the hall in his lap, they laughed at his jokes, they sighed at his woe and they cheered when he attacked the Tories. Job done Mr Brown?
Well, not quite.
There was no real mention of how he intended to turn the economy around, no meaningful help for t...
Reform think tank recommends 1 million public-sector jobs cuts
The Reform think tank has today issued a report which recommends that the UK government should reduce employment numbers within the public sector, specifically the NHS and the police, by 1 million in order to save £27 billion a year. The 15% reduction in headcount is a number which no political party is willing to commit to because ultimately it could be a significant vote loser as we approach th...Read More
Is a government backed infrastructure bank on the way?
There would appear to moves within the UK government to introduce a "government backed infrastructure bank" which will be used primarily to raise funds for projects in the public sector. A new Treasury specialist unit has been set up to look at the infrastructure in the UK and identify large-scale projects in the utilities, transport, waste and the telecom sectors. However, there is some dispute a...Read More