Economy November 28, 2011
In their most recent statement, the Organisation for Economic Cooperation and Development had dire warnings in regards to the current debt crisis in the eurozone. Spokesperson and chief economist of the OECD, Pier Carlo Padoan, stated that if the euro failed it would have grave worldwide consequences which could cause another recession of global proportions.Read more
Debt November 27, 2011
In his latest of efforts to reduce the burdens inflation is causing the hardest hit middle, the Chancellor is expected to announce plans to cap increases in rail fares to 1% over inflation, down from the planned 3%. This 2% difference is expected to cost the UK significantly.
It is expected that these changes will be announced during the Autumn Statement which is scheduled for Tuesday, the day before public sector strikes are planned. It is predicted that the Chancellor will also delay or freeze the projected 3% fuel duty increase which was set to begin in January as another measure to help financially burdened workers in the UK.
It is suggested that he will also announce a package intended to help small businesses by allowing any companies with 50 or fewer employees to opt out of auto-enrolment in pensions and there is a scheme in place to provide what are being called “easing” funds for these firms as well.
Amidst all his plans, fears of a double dip recession are intensifying and the Chancellor is expected to discuss his firm belief that austerity measures should continue based on the current debt crisis in the eurozone. Sources say that the rail cap is probably going to go ahead as planned yet it is unclear whether or not Osborne will freeze the 3% fuel duty.
At the moment, inflation is well above the targeted 2% and according to the most recent CPI, it is running closer to 5%. This is putting a significant amount of pressure on the Chancellor and even businesses are concerned that consumers just won’t be spending as much because of low wage growth and much higher prices on most goods.
In the end, it is expected that the Chancellor will state that government cuts will continue as planned through 2017 so that the country can make an effort to maintain its current credit rating. These comments may add fuel to the fire on the next day’s planned public worker strikes against government cuts in pensions.Read more
Debt November 26, 2011
The government’s recently implemented austerity programme may face a significant amount of criticism after new financial forecasts are set to indicate slower growth for the coming fiscal year and borrowing that is more excessive than previously thought.
Chancellor George Osborne’s fiscal budget statement for autumn is expected to reveal that independent economic growth forecasts will be cut by nearly 50%, bringing the economic growth rate to approximately 1%. Despite efforts to increase austerity and promote decreased government dependency, some argue that the Chancellor will be unable to formulate a plan that will prevent economic growth from consistently weakening.
Additional pressure comes from government budget restrictions, rising youth unemployment, a growing euro zone crisis, and the fact that many people are still not convinced by the austerity program. The autumn fiscal statements are managed by the Office for Budget Responsibility (OBR), which was established by Osborne about one year ago to provide accurate forecasts without the hindrance of interference from financial ministers. The OBR is expected to reduce its projected market growth statistics, and forecast a higher level of loan dependency during the next half decade.
Another reason why many are skeptical of the austerity programme is because Chancellor Osborne will be required to meet the coalition’s proposed fiscal targets using an extremely small margin. Meanwhile, constant turbulence in the financial market and lower consumer confidence continue to threaten the credibility of the public financial sector.
However, some economists believe that abandoning the proposed austerity plans at this moment in time could lead to a considerable worsening of the current financial crisis. Being that the budget deficit equaled more than 9% of gross domestic product in the 2010/11 fiscal year, many say that Chancellor Osborne has no other option but to continue forward with the austerity programme.Read more
Business November 21, 2011
With consumer confidence “evaporating,” CBI (Confederation of British Industry) director general, John Cridland, has stated that only businesses can rescue the UK economy from it’s current downward spiral. With both the government and consumers practicing conservative spending, Cridland believes that economic stimulation would have to come from business investments and exports that will cause the creation of new jobs in the UK.Read more
Even though the International Energy Agency made an historic effort to reduce the high price of oil, it remains over $100 (USD) per barrel which is quite worrisome to economic forecasters. Added to the fact that 60 million barrels were released from reserves and that Libya has made a return to the market, the price of oil remains historically high.Read more
Economy October 22, 2011
In a latest comment released from George Osborne, the Chancellor states that leaders in Europe need to act and they need to act fast because the debt crisis in the eurozone is spreading well beyond their region. As well, their indecisiveness on how to resolve their problems is prolonging the crisis. He states that they need to come up with some type of credible solution and act on it without delay before the contagion spreads even further afield.Read more
As recently as the beginning of this summer, financial analysts were still debating whether or not Greece would default. The line was drawn and the battle raged as politicians and financial analysts took sides. Some said a default was imminent whilst some claimed Greece would never default.Read more
Economy October 15, 2011
At a recent awards ceremony held at London’s Freemason’s Hall, Larry Fink who is the chief executive of Black Rock stated that what is currently being done about the European debt crisis just isn’t working. He called the quantitative easing that is being fed in increments a failure and states that at least $2 trillion (USD) is needed to make an impact.Read more
According to a recent Reuters poll, Britain currently faces a 33% chance of recession during the next year. Even if the country does not enter a recession, a best case scenario would still have Britain facing several quarters of slowed economic growth. This news comes a week after the Bank of England fulfilled their promise to initiate a new batch of asset purchases designed to stimulate a sluggish economy.Read more
Economy October 11, 2011
Chancellor Osborne has asked that leaders in Europe become decisive in their plan of action over the debt crisis that has been building in the eurozone. In fact, global leaders are now calling the eurozone the epicentre of all the mayhem within global markets.Read more