Posts From November, 2012

A few points of interest 

Tuesday, November 27, 2012 10:32:00 AM Categories: Economy Europe

A brief roundup of key events over the last few days:

  • Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne. Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks. He was a surprise choice for the head of the UK's central bank and had previously ruled himself out.
  • The UK economy grew by 1% between July and September, official figures have confirmed. The Olympic Games helped to boost growth over the summer. Compared with a year earlier, as opposed to the previous quarter, the economy contracted by 0.1%, whereas the previous estimate had shown flat growth.
  • Eurozone finance ministers and the IMF have reached a deal on an urgently needed bailout for debt-laden Greece. They have agreed to cut debts by 40bn euros ($51bn; £32bn) and have paved the way for releasing the next tranche of bailout loans - some 44bn euros.

Mixed messages about UK businesses 

Tuesday, November 20, 2012 12:37:00 PM Categories: Economy

With the ongoing struggles for UK businesses receiving much press coverage, there have been mixed messages about their future prospects, depending on whether your rose-tinted spectacles are on or not.

According to Business Secretary Vince Cable, there are "reassuring" signs the economy is continuing to recover and there is a "more upbeat mood" among the business community. "In the UK we have had a difficult time, but there are some reassuring figures on job creation, falling unemployment and business start-ups," Mr Cable said.

However, more than one in 10 shops is empty, according to the British Retail Consortium (BRC), the highest since it began collecting data on occupancy levels of High Street premises. The BRC said the town centre vacancy rate of 11.3% was the worst figure since its nationwide survey began in July 2011.

Clearly there are reasons to be optimistic but there may well be more pain for our high streets and businesses before we can be sure things are on the up.

UK inflation back on the up 

Tuesday, November 13, 2012 10:28:00 AM Categories: Economy

The UK's inflation rate as measured by the Consumer Prices Index (CPI) jumped to 2.7% in October, up from 2.2% the month before. The Office for National Statistics (ONS) said the increase was fuelled by education costs, largely because of a sharp rise in university tuition fees. Food prices also rose over the month, with price rises seen in some fresh food, including grapes and bananas.

The Retail Prices Index (RPI) measure of inflation rose to 3.2% from 2.6%.

The Bank of England is charged with keeping inflation close to 2%, something it has struggled to do in recent years as the standard way of suppressing prices is to raise interest rates, which it does not want to risk through this period of weak economic activity.

Alan Clarke, economist at Scotia Bank, said that target remained elusive: "Where do we go from here? Onwards and upwards. Utility bill increases are on their way. We've also got the effect of the US drought and increased food prices to factor in."

A key week for the world's economies 

Monday, November 05, 2012 3:13:00 PM Categories: Economy Europe

According to some analysts, this week is "the most important week of the rest of 2012". A pretty bold statement but with issues in so many countries around the world it's not hard to see why.

Firstly, America has to decide who will be its president for the next four years; then you have the Chinese starting the formal handover to its new leaders; and then you have the central banks of the eurozone and the UK deciding whether they need to do more to support their fragile economies.

In other words, this week will help to determine the long-term economic direction of countries accounting for just over a quarter of global output.

And, as if that wasn't enough, the Greek parliament will also be voting on further budget cuts that will determine whether it can get the next tranche of the European-IMF rescue package.

All in all, quite a busy few days ahead......