Spain suffers cut from Standard and Poor's
Credit rating agency Standard and Poor's has today reduced the credit rating on Spanish national debt from AAA to AA. This is a major blow for the Spanish economy and the Spanish government and comes amid signs that the Greece debacle is now affecting other European economies. Yesterday we saw Portugal suffer the indignity of a credit rating downgrade and experts believe more downgrades are on the way.
The ongoing problems within the Eurozone have impacted upon the euro itself which has come under significant selling pressure over the last few days. Despite the fact that only a few days ago it looked highly unlikely that any European country would default on its national debt, the chances of this happening have increased dramatically over the last 48 hours. There is also concern that the global economy could be impacted by the debt problems within Europe and we could move back towards another worldwide economic downturn.
Even though the UK stock market was fairly steady today, compared to yesterday, we did see significant falls in France, Germany and Spain and there is growing concern amongst investors. Despite the fact that the German authorities appear to have been dragging their heels regarding a solution for the Greek debt problem, it was the German government who today called for a "speeding up" of negotiations between the Greek government, the IMF and the European Union.
HBOS in Lloyds takeover deal
HBOS is to be taken over by Lloyds TSB, in a government-backed deal.The shares-only agreement values the lender at just £12.2 billion - far below its pre-credit crunch value.However, the ongoing financial crisis has resulted in a disastrous erosion of investor confidence in the firm - which has led to its stock falling by over 75 per cent this year.This deterioration worsened still further with t...Read More
Why do overseas investors still love the UK
While the UK economy continues to suffer we are seeing literally billions of pounds of overseas money, predominately from the Middle East, pumped into the UK economy. There have been a number of astute takeovers, property companies have reported approaches and there was the multi-billion pound investment in alternative energy just a few days ago. So why do overseas investment companies still lov...Read More
Should Gordon Brown be spending more time at home?
As the UK economy continues to move from one disaster to another Gordon Brown is facing something of a backlash as taxpayers see him more and more on the continent fighting the fight for other countries and economies while the UK continue to suffer. While ultimately a recovery in the US and Europe would obviously assist the UK economy there are concerns that is spending more time increasing his in...Read More
Transport costs push up inflation
Inflation rose in February thanks largely to a hike in transport costs, new figures from the Office for National Statistics (ONS) have revealed.According to the consumer price index (CPI), annual inflation rose to 2.8 per cent in February up by 0.1 percentage point from January.A rise in air fares and smaller contributions from sea travel helped push up the CPI, while there were also broader incre...Read More
More confusing views on the economy!
Andrew Sentance, one of the policymakers at the Bank of England, has today caught the attention of the currency markets with a suggestion that UK base rates could rise in the short to medium term. Commenting upon the potential threat of inflation he has given the biggest hint so far that UK base rates could rise, suggesting that the central bank could not "rely on goods deflation" alone to fight t...Read More