Archive for the ‘inflation’ Category
Sunday, October 26th, 2008
The devastating 0.5% decline in Britain’s national output in the three months ending in September was far worse than anyone had forecast. These shocking figures indicate that we are already in recession, that the downturn is going to be deep and prolonged and that many businesses will close down and that hundreds of thousands of jobs will be lost. Just to add to the pain caused by the spectacular plunge in the pound, which began when Bank of England Governor Mervyn King warned of recession early this week, has gathered momentum with sterling falling to a six-year low in latest trading.
Forecasters now expect the economy to shrink in size by at least 1% in the next year and by a further 0.5% in 2010. This would mean we must prepare for the worst couple of years in a generation.
Tags: Bank of England, Mervyn King, pound, recession, sterling
Posted in Credit crisis, Credit crunch, Government, Politics, inflation | No Comments »
Sunday, August 17th, 2008
Britain’s economy may be one step away from recession, with City economists warning that figures due this week could show that growth in the second quarter of the year is already at zero. Bank of England Governor Mervyn King already warned last week that it was a real possibility this year. This week will see the updated figures for growth for the second quarter. The first estimate issued two months ago showed growth at 0.2%. But economists expect the official figure to be revised down this week, possibly to as low as zero, barely above the definition of true recession.
Tags: Bank of England, economists, economy, estimates, Mervyn King, recession
Posted in Credit crisis, inflation | No Comments »
Saturday, August 16th, 2008
A cash-Isa has been launched by Leeds Building Society this month called the Inflation Buster ISA which promises to beat inflation over the next two years as measured by the Retail Price Index (RPI) and offer an extra 2.25% on your tax-free savings. After the Bank of England’s gloomy assessment for the economy, forecasting inflation may hit 6% before the end of the year, this is one for serious consideration. Although it is technically a two-year fixed-term product, you can access your money after each of the annual interest payment dates without any loss of interest. So it is effectively two one-year products that run consecutively too.
The minimum deposit is £1,000 and it must also be remembered that the two-year term runs from 1 October 2008 to 30 September 2010, so if you invested now you will only receive a rate equivalent to base rate (currently 5%) until October. However this is likely to be a popular product so it may be best to get in there early.
Tags: cash ISA, fixed-term, inflation, ISA, Leeds Building Society
Posted in Savings, inflation | No Comments »
Friday, July 11th, 2008
The Bank of England held interest rates steady at 5.0% on Thursday, in a widely expected decision as policymakers tussle with the twin evils of a slowing economy and surging inflation. By keeping rates on hold this month, the Bank is buying itself a little more time to see what interest rate path is required to bring inflation back close to the 2% target from the current 4.1% over the medium term.
Tags: Bank of England, base rate, boe, inflation, interest rate, interest rate held
Posted in Bank of England, Credit crisis, Credit crunch, Finance, Rate hunch, inflation | No Comments »
Wednesday, June 18th, 2008
The Consumer Price Index (the cost of living) rose by 0.3 percentage points to 3.3% during May - the highest reading since the measure was first reported in January 1997. Previous comparable annual inflation readings were last as high in July 1992. The rise above 3.0% meant the Bank of England Governor, Mervyn King had to write an open letter to the government explaining how the central bank would bring inflation back to its 2% target. Mr King added that inflation should peak to around 4% by the end of the year and begin to fall back towards its target “in the absence of further unexpected increases in oil and commodity prices”.
Read the letter from the Bank of England and the Chancellor’s response for more details.
Tags: Bank of England, boe, Chancellor, Consumer Price Index, cost of living, inflation, inflation rise, Mervyn King
Posted in Bank of England, inflation | No Comments »
