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.
Can the UK banking sector be saved?
While the potential for the Royal Bank of Scotland to be nationalised continues to grow by the hour there are serious concerns that the UK banking sector is in a downward spiral which will prove difficult to stop. Last week we saw Barclays bank shares fall by over 40% and this week we have seen the Royal Bank of Scotland shares collapse after announcing substantial write-offs and a multibillion-po...Read More
National Sickie day to cost £30 million!
The number of people calling in sick today is expected to peak at 350,000 on what employers are calling National Sickie day. It is unclear exactly why so many people are expected to call in sick today for what is clear is that it is set to cost UK businesses around £30 million! The survey also found that many employers in the UK are now accepting communication via e-mail and text rather than t...Read More
Gala Coral in refinancing talks
Bookmaking and bingo group Gala Coral has today announced an agreement with the company's bankers which will see £540 million wiped off the company's debts in exchange for a 50% share of the business. In what was to all intents and purposes a no-brainer, due to the fact that the business was drowning under a sea of debt, private equity firms Candover, Cinven and Permira were effectively forced to...Read More
Chance to avoid Fines over late Tax-Returns
HM Revenue and Customs (HMRC) have offered taxpayers who have failed to file tax-returns a window of a few weeks to submit them, and has warned that if they fail to do so they will face large fines. The normal procedure for HMRC is to issue fines of 100pc of the tax due to those who fail to file tax-returns, but in a special initiative they have offered taxpayers who have failed to submit retu...Read More
National Express announces £360 million rights issue
As expected, National Express has today announced a £360 million rights issue which will be used to shore up the company's balance sheet. This comes in the midst of a very difficult period in the life of National Express which has been forced to give up one of its rail franchises, seen debt top £1 billion and been rebuffed by potential suitors for the business. So is the company finally escaping...Read More