Is deflation the next problem for the UK economy?
As the UK economy continues to struggle, despite an array of positive reports, the Bank of England statement today would indicate that deflation is still a potential problem for the UK. Mervyn King revealed that inflation is likely to miss the banks 2% target until possibly the end of 2012 and will stay below 1% for the foreseeable future. As a consequence, it looks as if deflation rather than inflation will be a major issue with regards to the UK economy for the foreseeable future.
The £50 billion increase in the quantitative easing program is a perfect reflection of the difficult markets and the Bank of England's willingness to do almost anything to keep the UK economy afloat. Whether the quantity of easing program will be increased again in due course is open to debate, but if it was this would not be a good sign for the UK economy in the short to medium term. It is also evident that the UK government cannot afford to fund an ever expanding quantitative easing program and ultimately it will come to an end sooner rather than later.
For those who think the UK economy is "out of the woods" it may be time to think again because false hope seems to have induced an air of arrogance in some quarters.
Share this..
Related stories
Business leaders urge government to freeze minimum wage
The UK government has today been urged to freeze the minimum wage in order for businesses to retain their competitiveness in the UK economy amid one of the worst downturns in living history. The call has come from the British Chambers of Commerce which represents a wide spectrum of UK businesses many of whom are struggling to make ends meet. They have suggested that the government freeze the Natio...
Read MoreOnline fraud nearly doubles in just 12 months!
If ever there was a sign that we are in real trouble with worldwide economies it is the massive growth in online fraud as more and more people throw their common sense out of the window and chase an array of free money, gifts and other such prizes. Online crime is a relatively risk free operation as it can often be impossible to find the perpetrators who could literally be on the other side of th...
Read MoreIs the stock market as risky as people suggest?
The last 24 months have seen a rollercoaster ride in the UK, and worldwide, stock market with billions upon billions of pounds lost but many people making significant profits in the short term. While there is no doubt there are short, medium and long-term risks to investing in any stock market in the world, is it sensible to avoid stock market investment?
The truth is that any inves...
Lord Alan Sugar learns political speak
Lord Alan Sugar may well be king of the small business arena but he has had to learn a short sharp lesson in political speak after criticising small business owners earlier this week for complaining about a lack of liquidity in the market place. He has issued a statement suggesting that his original comments were taken out of context and he is there to support and help build the small business sec...
Read MoreUK government puts politics first
In a shocking indictment of the current state of the UK government, it was revealed that employees from the stricken van maker LDV were ignored as they attempted to lobby ministers for government aid. With a demonstration planned for Friday they were informed that there were no ministers available to speak to them because of ongoing issues within the UK government, i.e. the Cabinet reshuffle.
Read More