War has always had substantial economic costs, but war is becoming increasingly costly for both belligerents and bystanders. This is due to both the monetary costs of fighting and the economic fallout of sanctions. During the cold war, there was a theory that nuclear war would ensure a mutual self-destruction – and this assured mutual …
Summary – Periods of high inflation usually lead to lower returns on the stock market because higher inflation is likely to lead to higher interest rates, lower economic growth and lower dividends. Impact of high inflation on share prices If the inflation rate increases, this will make investors wary for a few reasons. Firstly, if …
Definition of Household savings ratio: The percentage of disposable income that is saved. (1) Total savings = Disposable income – Household consumption UK Saving Ratio Latest UK household savings ratio: 2021 = 10% But, by 2021 Q4 the saving ratio had fallen to 6.2% By contrast, the average savings ratio in the past 54 years …
Inflation measures how much the price of goods and services have increased over a period of time; and will have a significant impact on changes in the cost of living. An inflation rate of 5% means that on average the typical household basket of goods (e.g. food, TVs) and services (haircut, restaurant meal) is 5% …
Summary Natural gas is a key raw material for heating and electricity generation, therefore higher prices will significantly increase the cost of living, increase inflation and could slow down economic growth. In the long term, higher gas prices will encourage consumers to find alternatives and firms to increase supply (e.g. fracking for natural gas), but …
The price of natural gas is determined by several supply and demand factors. Source: IMF Commodity prices (look for left column – excel database) The sharp increase in the price of natural gas in 2021/22 reflects concerns over the availability of supply from Russia and the economic recovery which has led to greater demand. Since …
Recessions (a fall in real GDP) are primarily caused by a fall in aggregate demand (AD). A demand-side shock could occur due to several factors, such as A financial crisis. If banks have a shortage of liquidity, they reduce lending and this reduces investment. A rise in interest rates – increases the cost of borrowing …
Russia is a medium sized economic with a GDP of $1.48 trillion (USD) about half the size of the UK $2.7 trillion (2020) The strengths of the economy is based on exports of oil and natural gas. And with these sales, since 2014, Russia has built up foreign currency reserves of $630bn – a large …