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.
Alistair Darling calls the end of the recession
Chancellor Of The Exchequer Alistair Darling will tomorrow call the end of UK recession confirming his belief that the economy will move into positive territory around the turn of the New Year. He will make his forecast in a Guardian article to be published ahead of the G20 meeting in which he will appreciate there are still risks to the worldwide economy, but he believes the UK will follow the li...Read More
European Central Bank Facing A Difficult Situation
While the Bank of England has faced the dilemma of how much funding assistance to give to the UK markets without allowing backs to benefit directly, this situation is now being replicated in Europe where the European Central Bank (ECB) is faced with the same situation. So what is going on?
It is a little known fact that the ECB has very different collateral rules to those used in t...
Plastic is King as cash loses its appeal
The Payments Council has issued a statement today suggesting that fewer than 50% of transactions in the UK will involve cash by the year 2015. While of the 37 billion transactions carried out last year around 59% were paid for in cash, this figure is set to fall to below 50% by 2015 and 45% by 2018. When you compare this with the 73% figure back in 2000 the fall in the popularity of cold hard cash...Read More
Bank tipped to make 0.25% cut to base rate
Analysts are tipping the Bank of England's monetary policy committee (MPC) to cut interest rates this week, amid signs of an economic downturn. The MPC is expected to trim rates by 0.25 per cent, bringing the key base rate of interest to five per cent. Factors informing the decision are thought to include signs that the housing market is softening - as born out by a study from the Halifax yesterda...Read More
Ofcom leads the way with pay freezes and bonus cuts
In a surprising development it has been announced that telecoms regulator Ofcom has frozen pay levels for all staff and scrapped a number of bonuses which will save £900,000 in the coming year. The move has arisen because of negative inflation, pressure on the public sector budget and overall cost cuts across the telecoms industry. After months and months of suggesting that UK businesses should c...Read More