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Category Archives: sterling

Record holiday visits to the UK

Some people obviously want to be here – even if it isn’t us. In 2010 we saw the highest number of foreign holidaymakers on record coming to the UK. According to the Office of National Statistics there were 11.7 million of them, and they spent £6.64bn in the UK. On the other hand, 36.4 million UK residents went on holiday … 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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Why is inflation staying so high?

The UK is suffering far higher inflation than most people expected at this stage of the economic cycle. Our inflation is well above that in the US and EU. What are the reasons for this and what implications can we expect? Roger Bootle has tackled this question in an article in the Telegraph. He believes that one-off factors have been … Continue reading

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Have UK exports “hit the wall”?

The UK’s deficit on trade in goods and services widened to £3.8bn in May, compared to a deficit of £3.5bn in April. This is the worst balance of trade deficit for two years. These figures were published by the ONS today. The surplus on trade in services was £4.2bn in May, up from the £3.9bn recorded in April. On the … 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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CPI was 3.7% in April – alcohol, women’s clothing and volcanic ash to blame.

CPI annual inflation which is targeted by the government at 2.0%, rose to 3.7% in April from 3.4% in March according to figures released this morning by the Office for National Statistics. The largest pressures on prices came from clothing and footwear which rose by 2.2% and was particularly fuelled by increases in the price of women’s clothing; widespread increases … Continue reading

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Why has the UK trade deficit increased?

Is this more bad news? Let’s look at yesterday’s stark figures from the ONS. The UK’s trade deficit in goods and services widened from £2.2bn in February to £3.7bn in March. Although the trade in services remained in surplus to the tune of £3.8bn in March, this was down from the £4.1bn recorded in February. When it comes to the … Continue reading

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Surprise 2% increase in industrial output

Industrial output in the UK increased by 2.0% between February and March and also rose by 2.0% on the year to March 2010. This compares to analysts’ forecasts of a rise of around 0.3-0.4%. In fact, the Office for National Statistics had estimated that production would rise by 0.7% when they initially announced the GDP growth figures for the first … Continue reading

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What are the implications of the rise in prices last month?

So, inflation is still on the rise. The government’s target measure of CPI rose from 3.0% in February to 3.4% in March. This was mainly due to the cost of gas and petrol prices and a spike in food prices. A weak level of sterling is coupling with very high prices for oil and other commodities, and on top of … Continue reading

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UK trade picks up at last

It has been really puzzling as to why our balance of trade has not been improving. With sterling having depreciated by 25% since the beginning of 2007, we would have expected that this surge in price competitiveness to have boosted exports dramatically. The good news is that UK exports now seem to be really motoring. Well, not so much motoring, … Continue reading

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