Inflation to stay above target and unemployment to rise to 3 million

This is included in the latest forecast from the Centre for Economics and Business Research (Cebr), which has been voted the best GDP forecaster for 2011. The Cebr forecasts that increases in oil and commodity prices – reflecting the impact of quantitative easing in the US and Eurozone – mean that their inflation forecast has had to be raised sharply … Continue reading

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Inflation starts to slow

The Consumer Prices Index (CPI) fell to 5.0% in October from 5.2% in September. The largest downward pressures to the change in CPI annual inflation between September and October came from falls in the cost of food (due to significant and widespread discounting by supermarkets and good harvests for certain produce), air fares and petrol. But working in the other … Continue reading

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Surprise fall in UK inflation

CPI, the government’s target measure of inflation, fell to 4.2% in June, down from 4.5% in May. This took economists by surprise, as there was a general expectation that inflation would rise this month. The biggest reason for the fall was the drop in prices in the recreation and culture category, which largely reflected lower prices for computer games and … Continue reading

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Big rise in inflation and heartfelt apologies from Mr King

Look away now if you are of a nervous disposition. Latest figures from the ONS this morning show that CPI annual inflation reached 4.5% in April, up from 4.0% in March. The only time CPI inflation was higher than this was in September 2008 when it reached 5.2% which was a record high. The RPI figure came in at 5.3% … Continue reading

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Large companies are swimming in cash, while consumers are drowning in debt

So says the Quarterly Economic forecast produced by the Ernst & Young Item Club. They forecast that UK GDP growth will be only 1.8% this year, but will rise to 2.3% in 2012 and 2.7% in 2013. Where will the growth come from? They believe that there will be a “major revival” in business spending and forecast that business investment … Continue reading

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UK Manufacturing grinds to a halt

Manufacturing has been driving our economic recovery, such as it is, and was expected to continue to do so. But, there is bad news. Although manufacturing output grew by 0.9% in January, it failed to grow at all in February. Alan Clarke, UK economist at BNP Paribas, was quoted as saying that the data was “bitterly disappointing”. The wider measure … Continue reading

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Squeeze on living standards is inevitable says Merv

“In 2011, real wages are likely to be no higher than they were in 2005. One has to go back to the 1920s to find a time when real wages fell over a period of six years.” “The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK … Continue reading

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Continued rise in UK producer prices

Output price inflation rose to 4.2% in December 2010 according to the Office for National Statistics.  This is sometimes referred to as ‘factory gate’ annual inflation, and measures the output prices that manufacturers sell their products at. The rise on the month was 0.5% which is considered quite significant. At the same time, input price annual inflation rose by 12.5% … Continue reading

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House prices are now 18% below their pre-recession peak

House prices fell 1.3% between November and December 2010 according to the Halifax. This meant a further fall of about £2,000 in the average price of a house, which now stands at £163,435. Overall, there was a fall in prices of 1.6% over 2010 as a whole, and house prices are now about 18% below their peak in the third … 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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