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Category Archives: Exchange Rates

Manufacturing falls, and trade gap worsens

On top of the looting and mayhem, the UK economy is suddenly looking very flat indeed. UK manufacturing output fell by 0.4% in June according to figures from the Office for National Statistics. This compares with an increase of 1.8% in May which had led many analysts to expect manufacturing would have risen by about 0.2% in June. There is … Continue reading

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The UK’s Inflation Problem: Selling England by the Pound?

This is the title of a speech which Andrew Sentence, of the Bank of England’s Monetary Policy Committee has just given. He is diametrically opposed to Mervyn King’s analysis of the current situation, believing that current levels of inflation are not temporary; that interest rates need to be raised; and, that in not taking action now the Bank is putting … Continue reading

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UK austerity measures “unsustainable” says George Soros

George Soros, the billionaire investor and hedge fund manager, gave his views on the UK’s economic policy at the World Economic Forum in Davos in Switzerland yesterday. He is quoted as saying that although he thought the UK government was right to start making cuts he also thought the plans would have to be modified. He said: “I don’t think … Continue reading

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Oops! CPI inflation rises to 3.7%. Zimbabwe here we come

“Inflation will soon be in double figures” says Governor of the Bank of England. “We can’t raise interest rates. That’s the only thing preventing David Cameron’s fiscal policy turning the country into a total wasteland.” Well he didn’t actually say that, but he might have liked to. The Governor’s mantra that inflation will eventually come down of its own accord, … Continue reading

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Sterling, economic growth and interest rates

One immediate effect of the 0.8% rise in UK economic growth during the third quarter, which was announced yesterday, was an upward valuation in sterling. The pound rose by about 1.5 cents against the dollar and stands at $1.5814 this morning, according to Reuters. The pound has now risen by almost 2 cents this week. The story is the same … Continue reading

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The truth about global exports

When we try to explain Ricardo’s theory of comparative advantage we invariably use a two country, two product example. Two hundred years ago, when Ricardo first put forward his theory of international specialisation and trade, it was really that simple. We produced something wholly within our country and sold it to their country. They produced something different, completely within their … Continue reading

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International Monetary Fund powerless to act

The word ‘war’ has been on the lips of international negotiators in recent months. This is nothing to do with Afghanistan or Iraq, but is just as significant. This is about the possibility of a global currency war. There are imbalances in the global economy which were at the heart of the recent collapse of the world economy. What are … Continue reading

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The UK could lose 1.3m jobs as a result of the Budget

Surprise, surprise! According to the Guardian, a private Treasury assessment of the planned spending cuts says that up to 1.3m jobs could be lost over the next five years. The Guardian says that it has seen a slide from the final version of a presentation for last week’s Budget, which says that: “100-120,000 public sector jobs and 120-140,000 private sector … Continue reading

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What is the matter with them?

I have just recovered from the Budget this week, as it was even worse than I had anticipated. I keep writing in my blogs that extreme austerity packages are going to damage the economy but George Osborne is just not listening. What’s the point of me writing all this if he is not taking a blind bit of notice. I … Continue reading

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Do falling markets and tighter liquidity signal a new Great Depression?

This seems a surprising prospect at the moment, but according to Telegraph.co.uk this morning, Andrew Roberts, head of European rates strategy at RBS, said: “Great Depression II” could now be approaching; adding: “It now has the potential to speed toward its conclusion; a European $1 trillion package which does little and political panic tells you we are about to reach … Continue reading

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