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.
Water companies given power to reduce bills for most vulnerable
‘Social tariffs’ are to be introduced by the government in order to reduce water bills for those most at risk of defaulting on payments due to low incomes. Water companies have been given the go ahead to cap the bills under new government guidance, within which the tariffs were included. The announcement was made on the 22nd June at the Rio+20 conference in Brazil by Deputy Prime Minister,...Read More
UK trade deficit falls to an 18 month low
The difference between imports into the UK and exports out of UK fell to an 18 month low of £7.4 billion with exports up 0.3% to £19.7 billion and imports down 2.5% in November to £27.1 billion. While on the surface this may not seem like a major issue, it shows that the weak UK currency is starting to attract the attention of overseas buyers. Many people believe that weak sterling could be the...Read More
Even the aristocracy are suffering!
Yesterday there was an auction at Christie's which was something out of the norm and involved Princess Michael of Kent and an array of other royal family members. All in all, the Duke of Kent, Princess Alexandra, Prince Michael and Princess Michael of Kent auctioned 300 heirlooms from the Duke's late parent's estate to try and replenish their own personal finances. So how did they do? The 300 i...Read More
What is more important than the financial market White Paper?
As we covered in one of our earlier posts, the UK government has this week delayed yet again the publication of the White Paper on the future regulatory framework of the UK financial markets. Claiming there are two other financial White Papers to be released over the next few days many people cannot believe that these other White Papers have taken precedence over the financial sector. So what exac...Read More
ID fraud is on the increase
Identification fraud is on the increase across the whole of the UK including the consumer and business arenas. Despite the fact that the government and various regulatory authorities throughout the country have highlighted the problem of ID theft for some time, more and more consumers and more and more businesses seem unwilling to take these warnings on board. There is a feeling that this lack of...Read More