Monday, May 08, 2006

China looks likely to increase interest rates again

Independent: China overshoots growth target

Will the UK shortly be importing inlfation?

Posted by Nimmm @ 01:35 PM (676 views)
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1. Denzil said...

>Will the UK be importing inflation?

You bet your bottom dollar.
I just don't buy into this low inflation + low interest rate economy business.
In the short-term it can be controlled by importing cheap stuff and China have been Gordon's best friend because they have kept the lid on our inflation (or at least the figures that we are led to believe is inflation!).
Where next for cheap good?

Monday, May 8, 2006 02:27PM Report Comment

2. Uncle Tom said...

I've made about 30 trips to China over the last thirteen years, and the pace of change has been absolutely incredible - and exciting to watch

What is very apparent now is that the era of ever cheaper kit from the People's Republic is over, and that prices are now likely to rise significantly.

For the UK, this means that the inflation counterbalance has gone, which also means the era of low interest rates is also likely to draw to a close.

Monday, May 8, 2006 04:09PM Report Comment

3. Dadm said...

Walk in to any high street clothing store and you will see the same prices that you would have seen 15 years ago. The effect of China has been to import deflation which in turn has offset the price pressures of the increased cost of servicing higher mortgages.

Once the currency is revalued upwards, import costs will increase. As UK and world businesses are now so dependent on China for maufacturing, the effect will be inflationary on the UK consumer. So for us "rent boys" this is another good news story.

For the average UK idiot citizen, they have to face a mountain of debt, increased gas costs, above inflation council tax rises, increasing costs on the high street (subject to China).

Never before has the UK public been so dependent upon interest rates remaining low.

Tuesday, May 9, 2006 08:22AM Report Comment

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