With inflation expected to hit 3 per cent in 2017, is the Bank of England right to prioritise growth over price stability? August 16, 2016 Martin Beck, senior economic adviser to the EY Item Club, says Yes. In light of the sharp post-referendum drop in the value of the pound, prices of imported goods are set to increase. As a result, inflation will rise over the next year. As our forecast suggests, CPI inflation is expected to peak at around 3 [...]
No problems for the Old Lady as Carney snaps up government bonds in QE programme August 16, 2016 The Bank of England's quantitative easing programme went off without a hitch this afternoon, allaying fears Threadneedle Street may need to change tact. In the Bank's second round of buying super-long-term government bonds, investors offered to sell £3.1bn to the Bank – 2.67 times the amount it needed to buy. Last week, the Bank fell [...]
US Federal Reserve frozen by weak US inflation as price rises slip back August 16, 2016 Inflation slipped back in the US economy in July, further easing the pressure on the US Federal Reserve to hike interest rates. The consumer prices index (CPI) came in at 0.8 per cent in July, on a non-seasonally adjusted basis, in figures released by the US Bureau of Labor Statistics this afternoon. That was down from [...]
Downgrades outpace upgrades by three-to-one in the sovereign credit ratings game August 16, 2016 Governments across the world are becoming riskier to lend to, according to an analysis of sovereign credit ratings. Research by IHS Global has shown the number of downgrades outpaced upgrades by a ratio of three-to-one in the second quarter of the year, as low commodities prices hurt emerging markets and Brexit led to the UK [...]
German financiers less concerned about Brexit fallout August 16, 2016 Confidence in Europe's largest economy has bounced back after a sharp fall in the immediate aftermath of the UK's shock vote to leave the EU. The ZEW economic indicator – one of the leading gauges of optimism among German investors – climbed to 0.5 in August from a reading of minus 6.8 straight after the Brexit vote. Positive [...]
Sterling soars as UK inflation hits 20-month high after Brexit vote August 16, 2016 The pound has jumped this morning after figures showed prices in the UK are rising at their fastest rate since the end of 2014. Inflation came in at 0.6 per cent in July on the consumer prices index (CPI), ahead of expectations and up from a rate of 0.5 per cent in June. Sterling charged [...]
Misery for commuters with 1.9 per cent fare rise as inflation jumps after Brexit vote August 16, 2016 Rail fares will rise by an average of 1.9 per cent next year as inflation has jumped in the first full month after the EU referendum. The consumer prices index (CPI) came in at 0.6 per cent for July, according to the Office for National Statistics (ONS). This was up on the 0.5 per cent [...]
Resolution Foundation argues Brexit won’t solve the low-skilled pay squeeze August 16, 2016 Reducing levels of migration will do little to end the pay squeeze for low-income workers, new research by a leading think tank has found. A report published today by the Resolution Foundation claims while net migration has reduced earnings for some people in the UK, a tighter, post-Brexit clampdown on the numbers of people coming [...]
London has the worst debt crisis in the UK August 16, 2016 Londoners have the most severe debt problems of anybody in the country, according to a leading debt advice charity. StepChange said those living in the capital were more likely to be behind on their monthly payments and typically had higher levels of borrowing than those across the rest of the UK. The findings comes in a [...]
Bank of England prepares for crucial QE test August 15, 2016 All eyes will be on Threadneedle Street tomorrow afternoon as the Bank of England gears up for its next bond-buying mission. To the market's surprise, the Bank of England could not find enough willing sellers of long-term government debt on the open market last week, leading to the first ever time when the Bank was [...]