UK News
Insights from the UK and beyond
Where is the economy headed?
Britain’s second-quarter GDPÂ growth was precisely zero, reflecting the country’s weakest performance since the recession of the early 1990s.
With growth in the services and manufacturing sectors equalling the dismal figures of 2005 and interest rate futures rising, it’s a double whammy, hitting both our pockets and, some would say, our morale.
At the same time, inflation currently stands at more than twice the central bank’s 2 percent target, hampering the Bank of England’s ability to boost growth by bringing down interest rates.
Most analysts do expect it to cut rates and some predict a move before Christmas. Others say it will have to wait longer.
Two sides to sterling’s tumble
Sterling has extended its losses against the dollar to its lowest level in more than two years , trading just above $1.85. As recently as mid-July one pound would buy two dollars and there were plenty of tales of holidaymakers rushing to the United States to make the most of it.
It’s not hard to see why sterling is under pressure, even though inflation is currently well above target and the highest in years: rising unemployment, falling house prices, large trade and budget deficits, and slowing economic growth.
Has the Bank been too cautious?
Battling with the twin evils of soaring inflation and weaker growth, the Bank of England has kept interest rates at 5 percent for the fourth month running.
With the risk of Britain possibly facing its first recession since the early 1990s, the MPC has clearly opted for caution.
Could house prices rise by a quarter?
Forget everything you’ve heard about the looming property crash.
In the midst of dire warnings about collapsing house prices comes a lone voice offering a crumb of comfort for hard-pressed homeowners.
A report by the National Housing Federation says that far from falling off a cliff, house prices could actually rise by a quarter by 2013.
Wednesday’s front pages
The crucial poll win in Pennsylvania by US presidential hopeful Hillary Clinton came too late for many newspapers, who predominantly went instead with rising food prices and fears for a missing boy in Wednesday’s headlines.
THE INDEPENDENT: The Chilling Message From Zimbabwe’s Church Leaders
The paper runs a dramatic quote in red and black letters which says: “If nothing is done to help the people of Zimbabwe, we shall soon be witnessing genocide similar to that in Kenya and Rwanda.” Story here.
Brown fights fires at home while on U.S. trip
For Gordon Brown on his U.S. trip it has been a case of when the cat is away the mice will play. While Brown was at the White House working to shore up the “special relationship” with President George W. Bush, rebellion broke out in Labour ranks at home.
First, Labour peer Lord Desai launched an extraordinary attack on Brown, telling the Evening Standard: “Gordon Brown was put on earth to remind people how good Tony Blair was.”
Immigration. Good or bad for Britain?
Immigration has long been a subject to inflame passions and the issue is back in the headlines again after a new report suggested migrants do not bring the economic benefit to the country that the government says they do.Ministers argue that immigration is worth 6 billion pounds a year to Britain’s GDP and also helps to fill labour and skills shortages.But the House of Lords Economic Affairs Committee, whose members include two former Conservative Chancellors and a number of other leading economists and City figures, disputed this, saying the economic benefits are limited.It has called for the government to review its policies and look at what impact the influx of 190,000 migrants a year is having on the country.So is the government’s approach to immigration flawed as the committee says? Or are immigrants vital to Britain’s economic future?Send us your comments
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The Wall
