It is not a good time to be a saver in the UK. Interest rates are 0.5% and inflation has been above 2% for a high proportion of the previous five years. Because inflation is higher than nominal interest rates, we are seeing negative real interest rates. This means many savers are seeing a decline …
The Eurozone inflation rate is 0.4% (ECB database) (Sept 2014) Eurozone HCIP inflation rate HCIP (Harmonized consumer index prices) Source:| (ECB Inflation graphs, sometimes a few months outdated) Food inflation Food inflation is currently negative. Food inflation tends to be one of the most volatile components. This negative food inflation is one factor reducing the …
Emerging markets are defined as economies which are making the transition from a low income / developing economy to a high income ‘developed’ economy. Key emerging markets include: China, India, Brazil, Mexico. Emerging markets are mostly based in South East Asia (excluding Japan) and Latin America. Emerging markets often have a high rate of economic …
After faltering for several years, the UK economy shows signs of real recovery, with rising spending, investment, exports and even manufacturing growth. At the start of 2014, there seems to be a virtuous circle of falling unemployment, falling inflation, and rising GDP. After one of the longest and deepest recessions on record, these signs of …
Readers Question: As the FED is talking about tapering and at the same time keeping interest rate low. How can they both go together? Tapering will raise yield as bond prices go down in absence of any freak buying. And interest rate will chase yield this causes interest rate to climb up. Fed Tapering means …
The European Union is facing the prospect of a serious bout of deflation (or at least, very low rates of inflation / disinflation) Deflation occurs when prices fall. But, very low rates of inflation are considered to raise problems associated with deflation. In the Eurozone, the main index of inflation has fallen to 0.7% – …
There are different ways of looking at the UK recovery. Firstly, we can look at the damage done to the economy since the peak in 2008. The black lines suggests a possible pre-crisis trend rate of economic growth. A rough rule of thumb, suggests that had economic growth been maintained at the pre-crisis trend rate …
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 …