Is the Bank of England turning negative on the UK economy?
There is a feeling within financial circles that the Bank of England may be starting to turn a little negative on the UK economy and the prospects for 2010. At a time when many people assume the economy is over the worst, signs from Bank of England over the last 24 hours seem to indicate that confidence in 2010 is not as high as it has been over the last few weeks. So what is the problem?
One of the main issues appears to be the fact that quantitative easing, while supporting the economy in the short to medium term, is not really a long-term answer due to the massive expense. The Bank of England has spent up to £200 billion on the quantitative easing program so far but there is concern that economic activity and the strength of the UK economy could demise rather quickly as and when the program ends.
As a consequence, more and more people now believe that the UK government will place pressure on the Bank of England to inject more capital into the quantitative easing program from February 2010 onwards. However, this will open the government to accusations of political interference ahead of the general election.
Share this..
Related stories
Will the Ukraine and Russian gas dispute affects EU supplies?
As the Russian conflict with Ukraine over gas supplies continue to grow there are serious concerns that the Russian threat to "switch off" the pipeline which flows through the Ukraine into Europe will affect the EU market directly. While the Ukraine pipeline is not the only supply line to the EU it offers a vital supply to a growing market. So will Russia carry out its threat to cut off the pipeli...
Read MoreIs deflation the new threat to the worldwide economy?
While we have heard concerns regarding inflation, recession and possible depression a new argument was added to the mix today with many now concerned we are entering a period of severe deflation which could well be catastrophic for the worldwide economy. The sharp reduction in UK interest rates was unexpected but well received, but many are now questioning why such a severe reduction was announced...
Read MoreRoyal Bank of Scotland announces £1.5 billion loss
Royal Bank of Scotland has today announced a £1.5 billion loss for the third quarter after a massive jump in bad debt write-offs which saw the company receive £33.5 billion in additional state funding this week. Despite the fact the UK government has ploughed billions upon billions of pounds of taxpayer's money into Royal Bank of Scotland already it seems that the business is still struggling an...
Read MoreIs the technology sector on the verge of a recovery?
Today we saw chip maker Intel announce fourth-quarter profits which indicate that the recession is over in the technology sector and consumers and businesses are flocking back to the arena. Fourth-quarter sales for Intel rose by an impressive 29% to $10.6 billion which was slightly higher than forecasts of around $10.2 billion. It would appear that orders for computers have increased around the wo...
Read More£1bn lost to tax evasion last year
Tax evasion offences could be cut by imposing more effective punishments on offenders, it has been claimed. According to a new report conducted by the National Audit Office (NAO), HM Revenue and Customs (HMRC) misses out on around £1 billion in taxes every year. One of the principal causes of this is the "relatively low" fines issued, the NAO said, and called for these to be raised to tackle the...
Read More