Readers Question: I am currently researching the impact of the global economy on inflation in the UK. I have come across economic policy uncertainty but am unsure what effect policy uncertainty in the EU and USA will have on the UK. UK inflation is primarily due to domestic factors. For example, if you look at …
The German Finance Minister Wolgang Schauble has been a strong advocate of austerity, supply side reforms and ‘sound money’ policies. (i.e. sticking rigidly to inflation targets). Generally, this has been the preferred approach of Europe to the ongoing debt crisis and recession of the past few years. Recently, he has claimed that the European economy …
Another few graphs to look at the impact of the UK budget deficit on bond yields and interest payments. Government net borrowing for 2012-12 excluding Royal Mail pension fund transfer and Asset Finance Programme (AFP – the proceeds from Q.E) Government borrowing vs debt interest payments The very large deficits have had little impact on …
The UK economy has experienced the most prolonged decline in real GDP on record. GDP is still lower than before the start of the great recession in 2008. This unprecedented recession has been prolonged – despite a sharp depreciation in the Pound, and a raft of unconventional monetary policies. However, recent statistics suggest there are …
Readers Question: I have recently read an article stating that “a country has only four options for getting out of a financial crisis: devalue, inflate, default, or deflate”… Would you be so kind to explain what these options comprehend?? Firstly, when people refer to a financial crisis they could refer to different economic problems. Recession …
Readers Question: what are the policies that UK are using for the recovery of its economy? Since 2010, it is has seemed the government doesn’t really have a policy for economic recovery. The burden of recovery has fallen more on the Bank of England and monetary policy. – zero interest rates, quantitative easing, and allowing …
Despite a shrinkage in manufacturing and widening trade deficit, the IMF have hinted that the UK economy is beginning to emerge from one of the longest periods of economic stagnation / recession on records. They marginally increased their forecast for UK growth to 0.9% for 2013. Does the recent good news give hope to the …
There is mixed evidence about the success of the Funding for Lending scheme Firstly, there is evidence that credit is still tight and firms are struggling to gain finance. Since last August, £1.8bn of credit has been drained out of the system At the same time, up to 40 lenders have accessed the £16.5bn in …