Should UK base rates move higher?
As the Bank of England readies itself for a difficult period in the history of the UK economy there are concerns that inflation may well remain fairly strong in the short to medium term with the bank of England unable to increase base rates for fear of curtailing any possible short-term economic recovery. Against this backdrop there are growing calls for UK base rates to move slightly higher in the short term to at least try and prevent "cheap money" from feeding the monster which is inflation. So will the UK base rates move higher in the short term?
It seems highly unlikely UK base rates will move higher in the foreseeable future, indeed some experts believe UK base rates could remain at 0.5% until 2014, for fear of ruining any possible economic stability in the short-term. Today we saw the Bank of England admit that inflation is not top of the agenda and economic growth, possibly at the cost of higher inflation, is more important in the short term.
This is a very different opinion to that given by the Bank of England only a few weeks ago and when you also consider the fact that a 1.1% increase in economic activity in the second quarter of 2010 may not, in the view of the Bank of England, be maintained throughout 2010, are we in for troubled times?
Share this..
Related stories
Is Obama all mouth and no action?
Over the last few weeks we have seen a significant increase in the number of positive and hopeful headlines in the US with each and every member of the US government attempting to talk up the economy. The $1.1 trillion rescue package announced by the G20 has been repeated time and time again as has the $787 billion stimulus plan announced by President Obama some months ago. But are we seeing any s...
Read MorePostal union members vote in favour of pay deal
In a surprise development it has been announced that the Post Office and the Communication Workers Union have finally come to an agreement regarding pay and working conditions for the future. Members of the union accepted the offer on a basis of 2 to 1 which will see a three-year wage rise of 6.9%, increased job security and above all an improvement in industrial relations between the two parties....
Read MoreWho Will Be The Next BoE Deputy Governor?
As the Treasury and the Bank of England stumble from one difficult situation to the next, they will need to find a Deputy Governor as quickly as possible to take the place of Rachel Lomax. Despite a concerted effort to persuade Miss Lomax to take on the role for a second 5 year stint, she has remained true to her word that she would leave after her initial period was up and parts company in just...
Read MoreRussia devalues the rouble yet again
The Russian currency, the rouble, has today been devalued yet against as the country comes to grips with the ever growing economic crisis. Russia has for many years been at the forefront of business development and business growth but the last few months have literally wiped away much of the progress made in recent times. The Russian economy is now in serious trouble and the devaluation of the cur...
Read MoreAre we worrying too much about a double dip recession?
Only a few months ago the UK economy seemed very much back on track and looking towards the future but today we stand on the verge of potentially talking ourselves into a double dip recession. Indeed, the European economy is in a very similar situation with many economists talking about a double dip recession despite the fact that economies are still growing in Europe and economic output would not...
Read More