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.
Ireland Set To Enter Recession
After experiencing one of the longest periods of sustained growth in its history it seems that Ireland is on the verge of a recession with reports that the economy will shrink by 0.4% during the remainder of 2008. When you consider that countries such as Ireland, which has experienced substantial growth and inward investment over the last 20 years, are on the verge of recession the signs do not b...Read More
Kraft Foods loses patience with Cadbury
After weeks of discussions with investors and advisers it appears that Irene Rosenfeld, the chief executive of US food giant Kraft Foods, will this week put the finishing touches to a hostile offer for Cadbury. It is believed that a bid of around £10.5 billion may be in the offing which would equate to an offer price at or around eight pounds a share. The company is under pressure to "put up or s...Read More
Gordon Browns era of public spending is over
There are rumours this weekend that Alistair Darling, the Chancellor of the Exchequer, is demanding at least £15 billion in Whitehall "efficiency cuts". Despite the Labour government attacking the Conservative party for suggestions that public spending should be cut over the next two years, it looks as though the UK government is being forced into a similar move itself.
UK government announces sweeping job cuts at Land Registry
Is it a coincidence that the government yesterday confirmed 1500 job losses at the Land Registry, which is an official government department, with five regional offices set to close?
This comes at a time when the UK government admitted a £92 million five-year programme to reduce the cost of this particular department and also earmarked the Land Registry for disposal as part of a £...
The UK economic collapse : lesson two
One of the main factors in the ongoing demise of the UK economy, and the worldwide situation, has been the fact that many financial institutions around the world were chasing a smaller and smaller profit pool and taking more and more risks. Sub-prime mortgage deals in the US were the spark which set the fire under economies around the world but in reality economies such as the UK already had their...Read More