Four charts that sum up the week: Sterling rallies, UK growth forecast cut, London house prices rise and Europe beats Britain May 15, 2015 London house prices ended seven months of decline, the Bank of England said it was feeling less optimistic about the UK economy and the French economy sped ahead of Britain and Germany in the first quarter, this week. Here are four charts that sum up what happened. 1. London house prices are on the up again, [...]
Mark Carney moves the goalposts again as interest rate hike seems way off – Bottom Line May 13, 2015 Unemployment is down, wages are up and inflation is forecast to rise too high in a couple of years. Surely it is time to raise interest rates, isn’t it? Not so, Mark Carney said yesterday. Borrowers may cheer, but it is a touch worrying that the governor seems keen to keep rates down for [...]
A tale of two economies: Why the Bank of England risks a sharp hike in interest rates May 13, 2015 We were offered two conflicting views of the UK economy yesterday, from the monthly Labour Market Statistics and the Bank of England’s quarterly Inflation Report. The Labour Market Statistics presented a picture of a booming economy and accelerating wage inflation. Unemployment has fallen by about 400,000 over the past year and the jobless rate [...]
Bank of England inflation report: UK growth expectations cut May 13, 2015 The Bank of England today slashed forecasts for how much its expects the economy will grow this year to 2.5 per cent, down from 2.9 per cent. Threadneedle Street also said it expects interest rates to remain close to historical lows for the foreseeable future, before rising some time in the second quarter of 2016. [...]
Outlook for UK wage growth still bleak despite rising job prospects May 10, 2015 Job prospects are improving but UK wage growth is likely to remain weak this year as companies continue to find no shortage of employees to recruit at current pay levels, the professional body for HR managers warned today. The Chartered Institute of Personnel and Development (CIPD), said falling inflation together with low job turnover and [...]
As the Bank’s latest minutes suggest, is it likely that inflation will bounce back soon? April 22, 2015 Andrew Sentance, senior economic adviser at PwC, says Yes Consumer price index inflation has been at zero for two months now. But looking ahead, the pressures are in an upward direction. The oil price has recently risen above $60 per barrel and petrol prices are firming up. The labour market continues to tighten, putting upward [...]
Why zero inflation means there are no more free lunches for politicians April 21, 2015 The temptation to believe in the concept of a free lunch has proved irresistible to numerous governments through the ages. Henry VIII, for example, has seized the popular imagination once again through Damian Lewis’s brilliant portrayal of him in Wolf Hall. Bluff King Hal is the nickname often associated with the King. But to his [...]
Don’t worry about zero UK inflation: The outcome of the election will be far more significant for markets April 14, 2015 Britain narrowly avoided heading into deflation last month, with prices unchanged compared to a year ago. But over the past six months, prices have fallen by 1 per cent annualised after adjusting for seasonal trends. Should we worry about deflation and the prospect of falling prices? Well, after stripping out some of the more volatiles [...]
UK inflation: Last time it was at zero in 1989, it was measured by the prices of swiss roll, tracksuits and luncheon meat April 14, 2015 The last time inflation was this low, shoppers' baskets were overflowing with Swiss rolls, shell suits and tins of luncheon meat. Yum. Prices fell 0.01 per cent in March, figures published today by the Office for National Statistics revealed. Although that figure means inflation is still technically zero per cent, it's nevertheless the lowest since records began [...]
Pound falls as UK inflation stays flat at zero in March April 14, 2015 The pound weakened 0.5 per cent against the dollar to $1.4614 after figures published by the Office for National Statistics (ONS) showed consumer price inflation stayed flat at zero per cent in March. Although it means the UK has missed slipping into deflation for now, a sustained period of stagnant growth is nevertheless a concern. [...]