Thursday, June 30, 2011

What to do, Sir King

Fresh inflation threat to weak UK economy

The strains on the UK economy have been laid bare by new data showing that inflation expectations are rising to dangerous levels at the same time as growth is slipping and consumer confidence evaporating.

Posted by dill @ 08:53 AM (1852 views)
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5 thoughts on “What to do, Sir King

  • This from today’s moneyfacts round up

    NS&I diverting mutuals’ funds

    National Savings & Investment’s (NS&I) inflation linked certificates are attracting funds away from other institutions, the director general of the Building Societies Association has said. The comments from Adrian Coles came after figures showed savings balances held with mutuals fell by £418 million in May 2011, compared with a reduction of £373 million in May 2010. “Following a strong April inflow, savings balances at mutuals fell in May, in common with other private sector deposit-takers,” said Mr Coles. “It seems likely that NS&I’s index-linked products attracted much of the money deposited in this period.” The accounts were recently relaunched and guarantee a rate above inflation.

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  • Thecountofnowhere says:

    Looks like everyone needs the savers money. If the building socs put up their savings rate to 10% I’d put my money back in there….maybe they could charge 14% on mortgages to cover it.

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  • What to do? Do nothing!

    Tell the sheeple that high inflation followed by a sudden rate rises was unexpected or down to the weather, holidays or other normal events.

    Once the sheeple are bankrupt pick up these assets for next to nothing.

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  • Unfortunately the article fails to pick up on the causal link been low rates set by the bank and the resulting high inflation. This is as shame as that’s the rub here.

    My old analogy of the arsonist blaming the fire for burning down the building still seems apt.

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  • @ Paul,
    “The findings are likely to alarm the Bank’s rate-setting committee, which is split over whether to hold or raise rates from their historic 0.5pc low”. I don’t think so, they have deliberately pursued a policy of courting inflation, and the weak pound is all part of that.

    A few minutes back – £ just above 1.1030 Euros.

    Conspiracy theorists say maybe the Euro is getting stronger because all the pundit are gambling on the Euro going “two tier” in the future, backed by China. Clearly something will happen as most of the “strong” economies are expecting Greece to default sooner or later…just a matter of time, really.

    By this time next year, I reckon the Euro lawyers could have rules in place to enable strong economies to distance themselves from their clueless cousins who got into the club by false promises and cheating. Just a conspiracy theory for now 🙂

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