Bank of England set to undermine UK recovery
This week will see the Bank of England warn UK politicians, UK businesses and UK consumers that the country is still at risk of a Japanese-style slump which we saw in the 1980s. During that period the Japanese economy was under pressure for more than a decade and the country was annihilated by deflation. But is the UK really at risk of a Japanese-style slump?
The very fact that the Bank of England will this week reduce growth forecasts for the UK economy, despite a variety of more positive reports being released of late, has caught the attention of many analysts. Mervyn King, the Gov of the Bank of England, is set to describe deflation as the biggest risk to the UK economy in the short to medium term. He will also confirm that this is the reason why the quantitative easing program was extended last week with a further £50 billion injected into the operation.
There are also murmurings in the background from prominent economists who believe that the UK economy may well enjoy a short lived recovery in 2009 but could face a slump in 2010. Whether UK consumers, UK businesses and UK banks are being drawn into a potentially short lived recovery remains to be seen but the situation could get very much worse before it gets better.
Share this..
Related stories
One in ten use their credit card daily
New research from Abbey shows that as many as one-in-ten credit card holders - that's three million people - use their credit card daily.Of the 34 million Brits now in possession of a credit card, 54 per cent use their credit card once a week or more 35 per cent use their credit card once a month or less.Abbey found that the most popular use for a credit card was for online shopping, with 61 per c...
Read MoreLord Sugar may step down from his advisory role
While many people thought that Lord Sugar was a strange choice for the government's enterprise adviser, bearing in mind his forthright and "in your face" approach to business life, it seems that he is this weekend considering his position with the government. He hit the headlines only last week after criticising small business owners who were concerned about the reduction of capital and liquidity...
Read MoreWho will be next on the HMRC tax crackdown?
As Her Majesty's Revenue and Customs continues to crack down on a variety of tax issues, the latest being the research and development tax credit, there is a feeling that many more companies and sectors are in line for a "review of procedures". Slowly but surely the UK government is working through an array of tax initiatives which were brought in only a few years ago but many people believe are p...
Read MoreAccountancy firms have 15 pre-packed administrators ready to go
It has been revealed that the U.K.'s largest accountancy firms have 15 so-called pre-packed administrators ready to go as concerns about the UK high street continue to rise. It is forecast that up to 15 retail giants will go bust in New Year as consumer spending continues to fall and consumer confidence remains critically low. This is the clearest sign yet that all is not well on the UK Street and...
Read MoreHas the UK recession come to an end?
The revelation that the UK economy is estimated to have increased by 0.2% in the three months to August 2009 was something of a surprise for many people. The indication that the recession may well have ended in May also took many people by surprise although while these figures, from the National Institute of Economic and Social Research, use official government data they are not the official stati...
Read More