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.
CBI warns of business nightmare
The CBI has again stepped forward to suggest that the number of UK businesses which could go under is set to rise in the coming months. Despite a number of assurances by the UK authorities it appears as though access to credit has worsened over the last three months with 63% of firms surveyed confirming this situation. Without access to credit a growing number of UK businesses will face serious fi...Read More
Has Nick Clegg dumped Gordon Brown?
Nick Clegg, leader of the Liberal Democratic Party, today launched a vicious attack on Gordon Brown creating speculation that he may favour the Conservative party in a hung parliament. It has always been assumed that Nick Clegg kind would tie up with Gordon Brown, as some of their policies seem to overlap, but there is now confusion in political circles as to which way the Liberal Democrat party w...Read More
GDP slip prompts UK economy pessimism
Britain's economy did not grow as quickly as had been estimated in the final quarter of 2006.UK GDP fourth-quarter growth was 0.7 per cent, 0.1 per cent less than previous estimates, according to figures from the Office for National Statistics (ONS).This meant total GDP growth in 2006 reached 2.8 per cent, driven by consumer spending.Richard Snook of the Centre for Economics and Business Research...Read More
UK currency under pressure
Last week was a bad week for the UK currency with sterling falling by 2.4 cents to just over $1.50 to the pound. Despite the fact that the UK economy appeared to be heading out of recession towards the end of 2009 many people are starting to turn negative regarding the short to medium term outlook. Indeed over the last two weeks we have seen members of the Bank of England's monetary policy committ...Read More
Is the FSA giving in to the banks?
The Financial Services Authority (FSA) has today confirmed that the supposedly regulations to control banking bonuses and banking remuneration packages in the UK will be delayed for a further two months. The new rules have been expected to come in on 6 November 2009 but now they will come in on 1 January 2010. While the two-month delay may look pretty innocent on the surface, what really is going...Read More