Research shows that historical interest rates have been consistently falling, ever since the first interest rates could be measured in the medieval ages. Although there are cyclical fluctuations, there is a consistent long-term trend for real interest rates to fall at a steady rate. The interesting thing is that this phenomenon has been noticed in …
An interesting question at the moment is to what extent does temporary cost-push factors lead to a permanent rise in underlying inflation? Temporary cost-push factors include rising commodity prices, rising food prices, higher taxes. These goods are often volatile so the increase is often temporary. In the case of taxes, the price increases last for …
Recently, the Economist published an article (You can fool some of the people…), pointing out several economic commentators were increasingly critical of UK economic policy and the Bank of England’s monetary policy in particular. Is the Bank of England really losing grip of monetary policy? or are they doing the best job in difficult circumstances? …
I like this article about the wrong kind of inflation by Roger Bootle Or as his cleaner said: “It’s not the inflation they need to sort out, Mr Bootle, it’s the rising prices!” Essentially, the wrong kind of inflation is cost-push inflation. This inflation is due to rising costs of production, such as rising energy …
It’s official the UK entered into recession last year with GDP falling over a period of six months. However, with only a 0.4% fall in GDP some argue the recession is relatively mild. This is Not a Mild RecessionWatch this video on YouTube But, if we look at real output per capita, the UK economy …
Last week the UK economy slipped into recession. But, was it avoidable? Why are interest rates not coming down when households are facing the greatest squeeze on incomes for a generation? Although inflation is falling it is still above the inflation target, but it is a mistake to prolong a recession, when inflation is expected …
In the past few months, inflation in the UK has halved from 10 to 4.7%. In the US it has fallen to 3% but ask an average shopper and they may express scepticism, the cost of living seems to be rising much faster. In 2021 Jordan Peterson tweeted that he believes inflation was 15% rather …
This week 2 year fixed mortgage rates rose above 6% – the highest level since Liz Truss’s mini budget of September. Why is UK Facing a New Mortgage Crisis?Watch this video on YouTube It threatens to add an extra £2,500 a year to the average mortgage. By next year, total mortgage payments could be an …