For the past several months, the governor of the Bank of England has had to write a letter to the Chancellor explaining why UK inflation has been above the government’s target of 1-3%. April 2012 gives the first on target inflation figure (1-3%) since Dec 2009. Core inflation which strips out energy and food has …
The BBC have this infographic about what happens if Greece leaves the Euro. Source: BBC But, when I look at this. Everything has already happened. Greece is already in recession. It has been in recession for past 5 years. Greece already has bank runs. Multinationals are not keeping money in Greek banks Due to unemployment …
Suppose, the Eurozone stumbles through this crisis. Suppose countries avoid leaving the Euro and endure several years of low growth and internal devaluation? What is to stop another Eurozone crisis occurring in 5 – 10 years time? I can’t see how Greece, Spain and Portugal will ever be able to thrive in the Eurozone. Unless …
We have frequently heard the statement that we are experiencing the worst recession since the 1930s, but data released from the ONS shows that the fall in GDP is actually more prolonged in the current 2008-12 recession than the Great Depression of the 1930s. source: Office of National Statistics (pdf): In terms of human misery …
Readers Question: Why is the current recession in Europe so bad? The recession in the Eurozone is one of the deepest recessions on record. For example, Greece are expecting 2013 to be the sixth consecutive year in recession (with on and off quarters of recovery)- this is one of the longest recession on record. Output …
Given very low expectations, there are some encouraging signs for a weak economic recovery in the UK. The OBR increased growth forecasts to 0.8% in the UK for 2012. Helped by the recovery in the service sector, it looks like the UK will avoid a double dip recession. This still leaves GDP below the 2008 …
Readers Question: Does money printing/QE always lead to inflation and price increases? No. Increasing the money supply does not necessarily cause inflation. In particular, we have seen a large increase in the monetary base (narrow money) that hasn’t led to an increase in the general price level. If you look at link between money supply …
Japan has traditionally had a high savings ratio, but, in past decade the savings ratio has fallen to be close to European / US levels. Graph showing Japan Savings Rates Japan’s economy chasing illusions Since 1998, though Japanese saving rates have declined. The graph is a bit hard to read, but, since 2004, Japanese saving …