Latest Economic News

November 19, 2008

US consumer prices fall by record 1%

by Kay Murchie
Figures from the Labor Department revealed that US consumer prices plummeted 1% in October - the highest fall since records began in 1947. This fall is seen as a sign of US economic weakness and have raised concerns of an imminent recession. The fall in consumer prices was attributed to the cost of fuel which fell for a third consecutive month. Meanwhile, ...

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Further interest rate cuts expected

by Kay Murchie
This month’s interest rate cut from 4.5% to 3% was a unanimous vote from the nine-member Monetary Policy Committee (MPC), according to the minutes of the meeting, released earlier today. The 1.5 percentage point cut was the largest reduction since 1981, and took rates to the lowest level since 1955. The Bank of England is hinting at a cut to 2.5%, or even ...

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November 18, 2008

UK inflation falls sharply

by Kay Murchie
According to the Office for National Statistics (ONS), UK inflation has fallen from its 16-year high of 5.2% in September down to 4.5%, as energy costs and oil prices have fallen. The fall was much more than economists had expected and will now pave the way for further aggressive interest rate cuts, following a cut of 1.5% to 3% earlier this month. The ONS ...

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November 17, 2008

London to suffer during recession

by Kay Murchie
A study by the Local Government Association (LGA) has found that the south of England will be the worst hit during the recession. In its report, 'From Recession To Recovery: The Local Dimension', the LGA said cities in the north will weather the storm better because decades of cost-cutting and redundancies have made businesses there leaner and more efficient. According to the LGA, ...

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Japanese economy officially in recession

by Kay Murchie
The Japanese economy, which is the world’s second largest, is official in recession - its first in seven years. The country has been hit by weakening exports and falling corporate investment. The economy, which is considered a barometer for corporate and consumer strength across the world, contracted by 0.1% in the third quarter, following a 0.9% contraction in the previous quarter from April ...

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CBI: Recession will be ‘tougher and longer’

by Kay Murchie
According to the Confederation of British Industry (CBI), the UK’s recession will be tougher and longer than previously estimated. The business group is forecasting that the economy will contract by 1.7% next year, revised from an earlier estimate of 0.3%. The forecast of 0.3% was predicted prior to the collapse of US investment bank, Lehman Brothers, in September. John Cridland, CBI’s deputy ...

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November 16, 2008

G20 summit agree steps to boost global economy

by Kay Murchie
The leaders of the world’s 20 major economies have met to discuss the global financial crisis. The G20 summit, which took place in Washington, saw the biggest gathering of presidents and prime ministers in nearly 10 years and brings together representatives of around 85% of the world's economy. With the eurozone in recession, unemployment in the US at a 25-year ...

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US retail sales plummet during October

by Kay Murchie
According to figures from the US Commerce Department, retail sales in the US fell 2.8% in October, the biggest monthly decline for 16 years. The October fall follows a 1.3% decline in September and is further proof that shoppers continue to tighten their purse strings amid the economic downturn and falling house prices. During the last two weeks, US chain stores, including Macy's ...

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BCC warns of prolonged recession

by Kay Murchie
The British Chambers of Commerce (BCC) has warned that the recession in the UK will be prolonged with a sharp rise in unemployment. The organisation said that gross domestic product (GDP) in the UK will fall by 1.6% next year, with a peak-to-trough fall of 2.5% throughout the recession. The group is forecasting a modest recovery in 2010 with a 1.1% increase in ...

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November 14, 2008

Eurozone enters first-ever recession

by Kay Murchie
Official figures show that the eurozone has fallen into recession after the economy contracted by 0.2% in the third quarter. This follows a 0.2% contraction in the previous quarter from April to June. Economists say the news is no surprise after it was announced yesterday that Germany, which is Europe’s largest economy, is now in recession. A country is considered to be in recession ...

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November 13, 2008

Retailers in for challenging Christmas as UK consumers spend less

by Kay Murchie
According to business group, Deloitte, the retailing industry could face ‘one of the toughest in decades’ this Christmas as UK consumers tighten their purse strings. The organisation said the average consumer plans to spend 7% less than last year. In its 14th annual Christmas Retail Survey, Deloitte found that while 24% of UK consumers intend to spend less ...

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Inflation to dip below 2% target as BoE warns of prolonged recession

by Kay Murchie
In its quarterly inflation report, the Bank of England warned that the UK is heading for a prolonged recession. According to the Bank’s Governor, Mervyn King, it is very likely that the UK economy entered a recession in the second half of this year, and added that it is difficult to know precisely how long it ...

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Europe’s largest economy in recession

by Kay Murchie
Official figures show that Germany, Europe’s largest economy, is now in recession after gross domestic product (GDP) fell by 0.5% in the third quarter. Figures from the Federal Statistics Office said that this is the second quarter in a row that the economy has contracted after a 0.4% fall in the second quarter. A country is considered to be in recession when it ...

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November 12, 2008

UK unemployment at 11-year high

by Kay Murchie
Figures from the Office for National Statistics (ONS) have revealed that UK unemployment is at an 11-year high. According to the ONS, in the three months to September the number of people out of work in the UK soared by 140,000 to 1.82 million, the highest level since 1997. Meanwhile, claims for Jobseeker's Allowance rose by 36,500 to 980,900 in October, the highest ...

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November 11, 2008

UK unemployment set to rise with Virgin Media, Taylor Wimpey, GSK and Psion announcing job losses

by Kay Murchie
Cable, internet and phone company, Virgin Media, has announced today it is cutting 2,200 jobs from its 14,600 workforce. The job losses, which represent 15% of its workforce, are part of major restructure and will save up to £120 million ($186.4 million) over the next 4 years. Sources close to the company ...

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UK retail sales fall

by Kay Murchie
According to the British Retail Consortium (BRC), UK retail sales have fallen over a 12-month period for the first time in 3½ years. According to the BRC, like-for-like sales in October were down 2.2%, while total sales were 0.1% lower compared with October last year. The figures are further proof that the High Street is suffering in the wake of the economic downturn. It is the ...

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November 10, 2008

China unveils $586bn stimulus package to boost economy

by Kay Murchie
In a bid to boost its weakening economy, the Chinese Government has announced a four trillion yuan (£374 billion, $586 billion) economic stimulus package. In the last two months alone, China's central bank has cut interest rates three times in an attempt to boost the economy, which has been hit by falling exports. The State Council announced the package over the ...

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UK manufacturers’ output prices fall

by Kay Murchie
Figures from the Office for National Statistics (ONS) have revealed that manufacturers' output prices fell by 1% in October from September, which is the largest monthly fall since records began in 1986. The fall, which is primarily due to the recent fall in oil prices, means the annual rate of output price inflation is down to 6.8% from 8.5% in September. Oil prices ...

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November 7, 2008

Obama faces highest US jobless rate for 14 years

by Kay Murchie
Not only does President-elect Barack Obama face a deteriorating economy, a housing collapse and rising foreclosures but a further challenge presents itself after figures today from the US Labor Department revealed that 240,000 jobs were lost in October. The Labor Department said that the jobless rates in the world‘s largest economy increased to a higher than expected 6.5% ...

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November 6, 2008

UK interest rates slashed 1.5% to 3%

by Kay Murchie
The Bank of England’s Monetary Policy Committee has opted to slash rates from 4.5% to 3%. Many analysts believed that a half percentage point cut was on the cards but the Bank has opted for an aggressive cut after it has been under severe pressure to cut interest rates to avoid a prolonged recession. Figures yesterday revealed that the service ...

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