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.
UK government set to extend FSA powers beyond banks
There are concerns this evening that the UK government is looking to extend the power of the FSA (Financial Services Authority), in relation to new salary and bonus regulations, beyond mainstream banks. It looks as though the government is looking to give the FSA the power to rip up legally binding employee/employer contracts if they do not abide by new bonus and salary regulations, for each and e...Read More
CBI joins fight in favour of immigration
The Confederation of British Industry (CBI) has this week joined the fight against the cap on immigration from those working in the UK from non-EU countries. This has been an ongoing issue for the UK government and is one which needs to be handled with kid gloves. So what impact would an immigration cap have on the UK business arena? The early signs are that many businesses in the UK have until...Read More
New wave of job cuts on the way
It has been revealed that advertising giant WPP and software company Sage are set to announce thousands of additional job cuts over the next few days. Many experts now fear that the employment market is entering the next phase of the economic downturn which could see hundreds of thousands of job losses announced over the coming days and weeks.
After the initial reaction to the econo...
Moss Bros Rings Warning Bells For The High Street
The latest high street retailer to sound the warning bells for the UK economy is suit company Moss Bros, reporting a fall of 1.5% in like for like sales over the last 19 weeks. The company expect this situation to deteriorate further with forecasts of a near 4% drop in like for like sales for the full year. While many observers of the UK economy have been expecting a sudden fall in the UK econom...Read More
Is the EU about to pounce on UK regulators?
As Gordon Brown and Alistair Darling continue to discuss the options with regards to the UK regulatory system it has been claimed that EU ministers are looking to take control of London. This has caused great concern in the investment markets where EU meddling in the past has been anything but helpful. So will the UK authorities sit back and let the EU takeover?
The problem for the...