Is inflation a threat to the UK recovery?
This week sees a number of vital economic statistics in the UK with concerns that the rate of inflation is set to spike upwards in the early part of 2010. Recent figures have shown an increase in the cost of raw materials, much of which came from the upward movement in the price of oil, which will have an impact upon inflation. So what else do we need to monitor in the short term?
There is also concern that the government's refusal to maintain VAT at 15%, and instead return it to 17.5%, will also place further upward pressure on the cost of living in the UK. In what is becoming a more difficult scenario by the day, the Bank of England is also under pressure because of the strategy regarding UK base rates which have remained at 0.5% for some time. If inflation does begin to take off, and the Bank of England does not respond quickly enough, we could move towards a situation where the rate of inflation spirals out of control and we need to see a significant increase in base rates in a very short space of time.
The ability to increase base rates and make borrowing more expensive is a very basic tool in the economic UK government's toolbox but one which has proven very effective over the years.
Offshoring poses 'exaggerated' risk
Warnings about rapid shifts in jobs from the UK to developing countries like India are greatly exaggerated, a report says.The Work Foundation thinktank's report says just 5.5 per cent of all jobs lost across Europe in the first quarter of 2007 came as a result of offshoring activities.Furthermore trade between the UK and India specifically grew from 0.4 per cent in 1995 to 1.2 per cent in 2004 ...Read More
Life Insurance ‘Too Expensive’ for Brits
Research from Beagle Street has found that Brits are shunning life insurance policies in large numbers, because they believe it is ‘too expensive’ 39pc of people who took part in the research claimed they felt that life insurance policies cost too much, despite the fact that prices start from just £3 per month. This means that more than half of British adults are at risk of leaving their...Read More
The unions attacking UK transport network
It was revealed today that First Capital Connect which runs the Great Northern Route from Hertfordshire and King's Lynn to King's Cross was forced to cancel all rail services today because of a lack of drivers. It would appear that with the unions currently in talks with the management about pay and working conditions, all drivers working for First Capital Connect have exercised their contractual...Read More
Unemployment reaches 11-year high
Unemployment in the UK has reached an 11-year high, totalling 1.82 million people, according to the Office for National Statistics.The unemployment rate increased by 0.4 per cent during the third quarter, equivalent to 140,000 people, to reach 5.8 per cent currently.An increase of 0.5 per cent in the rate, or 182,000 in the total, was recorded over the year.In terms of claimants, there was a rise...Read More
Is the UK government delivering on earlier promises?
Today's Financial Times has slaughtered Lord Mandelson and his "Building Britain's future - new industry, new jobs" project which is big on hype but small on detail. The article in today's Financial Times is a reflection of the ongoing situation regarding UK government promises and the lack of delivery. We saw this with the car manufacturing industry, which saw this with regards to savers and we h...Read More