Posts Tagged ‘inflation’
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 »
Thursday, June 12th, 2008
The City is betting on the previously unthinkable prospect of interest rates rising within months. Investors are gambling that rates will have to increase from the current level of 5% to bring inflation under control. Most had previously expected rates to fall to about 4.5% by the end of the year. Investors now fear that at least two, and possibly even three, quarter-point base rate increases are on the cards. City economists said that at the very best all hopes of an interest rate cut this year are now out the window.
Tags: city economists, inflation, Rate increase, rate prediction
Posted in Bank of England, Credit crisis, Credit crunch, Finance, Rate increase | No Comments »
Tuesday, April 15th, 2008
Families already struggling to cope with the credit crunch face huge increases in food bills because of global shortages. Costs are rising faster than at any time since 1991 (when there was a recession driven by sky-high inflation and interest rates) and the average shopping bill is likely to go up by £600 a year. Added to the impact of higher charges for mortgages, heat, light, water, petrol and council tax, the average family is likely to have to find an extra £1,500 a year, just to stand still. Worldwide food shortages have been caused by increased demand from countries such as China and India, together with poor harvests linked to droughts and floods. A decision by farmers to turn over their land to the growing of biofuels is also a factor. While biofuels have been presented as the solution to global oil shortages, they are now contributing to a lack of food. Some countries have suffered food price protests, while a number of nations are imposing limits on exports to protect their own supplies. The big question for British shoppers surrounds the extent to which supermarkets and other retailers will pass on the price increases. While profits will suffer if they swallow the rises, sales will inevitably fall if they pass them on.
Tags: biofuel, China, Credit crisis, Credit crunch, food bills, food prices, food shortages, global shortages, India, inflation, oil shortage, retailers, supermarket
Posted in Consumer, Credit crisis, Credit crunch, Finance, Food crisis | No Comments »
Thursday, March 6th, 2008
The Bank of England’s Monetary Policy Committee (MPC) decided to keep interest rates on hold today at 5.25%. A decision which is in line with market expectation and predictions. It made no statement to accompany its decision but policymakers had been suggesting the bank had to balance the demands of slowing growth and rising inflation. Soaring oil prices and the rising cost of food is putting a huge pressure on inflation around the world. The policymakers are concerned that inflation could rise to around 3% in the coming months which will require the central bank Governor, Mervyn King to write an explanatory letter to the government. However, economists are predicting further interest rate cuts in the coming months.
Tags: Bank of England, inflation, interest rates, market expectation, Mervyn King, Monetary Policy Committee, MPC, Rate hunch, rising costs
Posted in Bank of England, Finance, Government, Investments, Rate hunch | No Comments »
Saturday, January 12th, 2008
On Thursday, the bank kept rates on hold at 5.5% despite pressure to cut rates after increasing signs of a consumer spending slowdown. But most economists believe that this decision makes the need for a cut next month, all the more pressing. But the MPC is charged with keeping a lid on inflation which is currently running at 2.1% instead of it’s 2% target.
Tags: Bank of England, inflation, MPC, rate decision, Rate hunch
Posted in Bank of England, Finance | No Comments »
