When examining debt levels in the UK, there is government debt – measured by public sector borrowing (often referred to as National debt). See: UK National Debt. We also have private sector debt which is composed of personal loans, personal mortgages, business debts, and debts of the financial sector. Total Debt includes both private sector …
Readers Question: What is the importance of bank lending to the UK economy? Bank lending plays an important role in influencing levels of consumer spending, investment and economic growth. When bank lending reduced at the start of the credit crunch in 2008 – this decline in bank lending was a significant factor in causing the …
Policies to halt the slide of the dollar 1. Increase US interest rates · Higher interest rates will attract more hot money flows into the US and therefore cause an appreciation. · Also higher interest rates will cause an increase in savings and a fall in spending this will help reduce imports into the US …
To recover from a recession there needs to be either a rise in AD or a readjustment in prices and wages. Classical economists argue that a recession will only be temporary because labour and product markets are flexible. However Keynesians argue that wage and price rigidity can keep the economy below full capacity for a …
The UK government has a national debt of over 55% of GDP. It finances its debt by borrowing from the private sector. Its debt is managed by the Debt Management Office DMO 1. By issuing government bonds (gilt edged stocks) demand comes mainly from non- bank financial sector e.g. insurance co. i) e.g. Treasury 10% …
Readers Question. We hear much about the “pensions time bomb”, as people tend to live longer and there is a bulge as “baby boomers” reach retirement age. We also hear much about the need to save for retirement. Saving *money* may mean people have more money in retirement but surely the real problem is to …
Readers Question: With talk of a Greek exit from the Euro, the situation is almost always compared to Argentina in the 1980s and 90s. Can you explain what happened there and how it was resolved. In the 1980s, Argentina built up substantial debt and also suffered from periods of very high inflation. To stabilise inflation, …
Readers Question:Do you really think the UK will keep the AAA credit rating for say the next 2 years? The UK is one of the few countries to have a AAA credit rating. (list of countries with highest credit rating) I’ve always felt that the UK should be able to maintain its AAA credit rating …