Mervyn King plays down the threat of inflation
Mervyn King, the governor of the Bank of England, has this evening played down the threat of inflation in the UK suggesting that inflation is just as likely to under shoot its target as to overshoot. This is the first major speech from Mervyn King since August and would appear to suggest, just prior to the issue of October MPC minutes, that there is some debate within the committee as to the direction of the UK economy.
Mervyn King has many months suggested that UK inflation is not a reliable measure of economic activity and the underlying strength of the UK economy. He has for some time believed that inflation will fall back to within the banks 2% target rate in the short to medium term without any major action from the authorities. Indications that the UK economy is beginning to weaken, after a period of relative buoyancy, would seem to support this belief although so far the figures have refused to fall into place.
The Bank of England is beginning to give the impression of a body which is frustrated by the relative strength of inflation despite numerous attempts to talk down the threat of inflation in the UK.
Harriet Harman embarrassed after misleading employment statement
Harriet Harman, the woman's minister, is today reeling from embarrassment after the minister suggested that women were suffering more in the recession than men. She then went on to launch a campaign aimed at ensuring that women do not become "the victims" of the recession only for the Office for National statistics to release data which showed that if anything it is male jobs which are most at ris...Read More
UK retail sales increased by 0.3% in December
UK retail sales increased by 0.3% in December which is a far cry from analysts expectations of a 1% increase. However, when you consider the number of positive trading statements we have seen over the last few weeks it seems rather bizarre that sales on the whole only increased by 0.3%. This disappointing retail sales figure will do nothing for the UK stock market and investors who have suddenl...Read More
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...Read More
Are retail sales about to crash in January?
The CBI's monthly survey has dealt a crushing blow to those looking for a sharp turnaround in the UK economy with a report that the sales balance fell to -8 in January from +13 in December. This monthly survey is an indication of how those in the industry have fared over the period, a period which has been impacted by the increase in VAT and the extreme weather in the UK. So what does this mean fo...Read More
Are 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