UK News
Insights from the UK and beyond
Britons face rising price pain
– Fiona Shaikh is Reuters’ Economic Correspondent, based in London. –
Stubbornly high inflation has proved something of an inconvenience for the Bank of England over the last year, but the unrelenting rise in prices is turning out to be a real headache for ordinary Britons — one which is likely to get worse before it gets any better.
Consumer price inflation — the headline measure targeted by the central bank — accelerated to 4 percent last month, the highest in more than two years and double the BoE’s target.
A great deal of the rise will have been down to the 2-1/2 percentage point rise in value added tax at the start of this year — a one-off move that will drop out of the statistics next year and mechanically bring headline inflation back down again.
from MacroScope:
Economists vs the zero barrier
Anyone involved in financial markets on a day-to-day basis will be familiar with bits of jargon like “breaking the psychological barrier”, “passing key resistance levels,” and even “magic numbers”.
While academics might argue if such things exist, market players put a lot of weight (and money) on the way certain financial instruments, indexes and currencies seem to behave near a certain number – usually a round figure.
from MacroScope:
Darkening outlook for UK housing
The outlook for the UK housing market has darkened again. The usually optimistic bunch of property market watchers polled by Reuters, who have tended to predict ever-rising property prices no matter what the season or financial climate, now say the market will move sideways for the next two years.
They say that in the next few months, the small double-dip in prices that has begun will continue. Modest gains predicted less than three months ago for this year and next essentially have been wiped away.
from MacroScope:
Slowing growth, MPC splits? That’s so 2008
Sixties nostalgia was all the rage in the late 90s, and towards the end of the last decade we looked back only 20 years or so for a massive 80s revival in electronic pop and fashion.
With the 2010s in full flow, the current vogue of choice derives from just two years ago – at least among those noted trendsetters, economists.
George Osborne takes risk with rhetoric
George Osborne once said he spends more time thinking about politics than he does about economics.
Now that he’s Chancellor of the Exchequer, he probably needs to think about the latter a bit more.
from MacroScope:
‘Ken Clarke for Chancellor’ is no joke
Ken Clarke shouldn’t underestimate how strongly the city economists polled by Reuters last week want to see him serve as Britain’s finance minister next term.
The Conservative shadow business secretary and one time ex-Chancellor gleaned a few laughs from Thursday’s BBC Question Time audience when asked about the poll, saying: “There’s a limit to how much of a glutton for punishment you’re going to be.”
BoE’s King “doesn’t do sex appeal”
Bank of England Governor Mervyn King was on good form when he addressed the Royal Society – Britain’s oldest scientific discussion club – on the vexing issue of communicating complex forecasts to the great unwashed.
Aside from his usual moan about the media’s desire to reduce the BoE’s beautiful but baffling ‘fan charts’ of inflation forecasts to one or two numbers, he made a rare and welcome admission that in past years the central bank had not done as well as it could have to flag up the risk that a financial crisis was about to happen.
Webcast: Gordon Brown’s speech at Thomson Reuters
Prime Minister Gordon Brown set out his economic plans during a Newsmaker event at Thomson Reuters on Wednesday. Brown said he believed Britain would maintain its coveted AAA credit rating and announced a pay freeze for senior civil servants and military officers to help reduce a record deficit.
Below is a recorded webcast of Brown’s speech and the Q&A session that followed.
What did you think of the Budget?
Chancellor Alistair Darling has made his second annual Budget speech to parliament. Among the measures announced to the House were an increase in petrol duty of 2p per litre in September and a 2 percent increase in alcohol and tobacco duties from tonight.
Darling also announced a scrappage scheme offering £2,000 to people trading in cars older than 10 years for a newer vehicle. From next April there will be a new top tax rate of 50 percent for those earning more than 150,000 pounds a year.
In for a penny, in for £175 billion
It may not be tax and spend exactly, but it’s definitely tax and borrow.
For the best part of 12 years, Labour has pursued essentially conservative (with a small ‘c’) economic policies, steadily underburdening itself of the ‘fiscally unreliable’ tag that some earlier Labour administrations were (wrongly or rightly) saddled with.
And for most of the past 12 years, as the global economy steadily expanded and Britain’s along with it, with aggregate wealth rising smoothly, Labour looked strong at the helm each time the budget came around.
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The Wall
