Latest Economic News

August 8, 2008

Inflation in India reaches 13-year high

by Kay Murchie
Annual inflation in India has surpassed the 12% mark despite efforts by the Government to tighten monetary policy. Increases in the prices of some food articles and manufactured products pushed inflation to 12.01% in the week ending 26 July, up from 11.98% the previous week. At the end of last month, the Reserve Bank of India, raised its key interest rate 50 ...

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Chinese economy expected to grow 10.2% in Q3

by Kay Murchie
The State Information Centre is predicting that the Chinese economy is set to stabilise and will see growth of 10.2% in the third quarter - slightly higher than the 10.1% rise in the second quarter. Growth has slowed this year, down from 11.9% in 2007 due to falling global demand and measures by the Government to rein in excessive credit. ...

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August 7, 2008

US retailers reveal disappointing sales for July

by Kay Murchie
As consumers in the US are faced with higher food and fuel prices, figures show that retail sales in the US rose at the slowest pace in four months. Consumer spending is closely monitored in the US as it makes up for over 60% of total economic activity. The world's largest retailer, Wal-Mart, posted disappointing sales for July and said the ...

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Interest rates on hold at 5%

by Kay Murchie
The Bank of England’s Monetary Policy Committee (MPC) has decided to keep UK interest rates on hold at 5%. The move was widely expected by analysts as the Bank battles with a slowing economy and runaway inflation. Recent reports have suggested that the economy could be heading for a recession. According to Hetal Mehta, senior economic advisor to the Ernst & Young Item ...

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August 6, 2008

IMF revises its UK economic growth forecast

by Kay Murchie
The credit crunch, falling house prices and rising unemployment has led to the International Monetary Fund (IMF) revising its forecast for UK economic growth over the next two years. The IMF said UK growth will be just 1.4% in 2008 and 1.1% in 2009, down from the 1.8% for 2008 and 1.7% for 2009 that it previously forecasted. The figures ...

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UK consumer confidence falls to record low

by Kay Murchie
According to the Nationwide, UK consumer sentiment continues to fall among consumers and businesses in the service sector. The building society said its Consumer Confidence Index fell from 62 points in June to 51 in July - this represents the largest fall since the index began in 2004 and sparks concern that a recession is looming. The Index found that 42% of ...

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August 5, 2008

Consumer spending falls in US

by Kay Murchie
Consumers in the US have been hit by the biggest increase in prices in almost 30 years. The Commerce Department reported that consumer spending before removing inflation rose by 0.6% in June after a 0.8% increase in May. The majority of that spending went to pay higher prices for petrol and other essential items. However, removing inflation, spending crept up by 0.3% percent ...

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August 4, 2008

UK construction activity slumps to record low

by Kay Murchie
A survey has revealed that activity in the construction sector plummeted to a new low during July. The Construction Managers' Index, which measures trends in the housing, commercial and civil engineering sector, showed that a reading of the industry fell to a low of 36.7 from 38.8 in June, this represented the lowest figure since records began in 1997. Meanwhile, the ...

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Confidence among UK manufacturers falls to 7-year low

by Kay Murchie
A survey by the CBI and Experian has revealed that confidence among UK manufacturers has taken a dive throughout the UK, as companies are facing steep rising cost pressures with output expected to fall over the next few months. The index of business optimism fell to -40 in the three months to July, this represented the weakest figure for 7 years. The ...

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July 31, 2008

Consumer confidence at 34-year low

by Kay Murchie
A survey has revealed that consumer confidence is at its lowest level since 1974 as soaring food and fuel prices sparks concern for the economy and personal finances. The GfK NOP barometer of UK consumer confidence scored -39 in July, this represents the lowest level recorded since the survey commenced in 1974 and down from -34 in June. The survey reveals the extent ...

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July 29, 2008

High Street experiences worst month in 25 years

by Kay Murchie
Sales on the High Street have slumped to their lowest level for a quarter of a century. Figures from the CBI show that 61% of businesses said activity was lower in July compared with a year earlier while just 25% said it was higher. The CBI said the resulting balance of minus 36 points was the weakest since its distributive ...

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July 28, 2008

No sign of credit crunch easing say IMF

by Kay Murchie
In its latest global financial stability report, the International Monetary Fund (IMF), said the global credit crunch is showing no signs of abating. Credit is being hit by falling house prices and slowing economic growth, according to the report. The IMF warned that banks are experiencing renewed stress, as well as further cutbacks in bank lending which could deepen the ...

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July 25, 2008

Brits only to survive 11 days if made redundant

by Kay Murchie
A study carried out by Yorkshire Building Society has found that 36% of Britons could only survive 11 days if they were to lose their job or be too ill to work. The survey finds just how many Britons are overstretched by mortgage payments, rising fuel and food costs and higher utility bills. The news comes as the UK economy ...

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Recession fears as UK economic growth weakest for three years

by Kay Murchie
Figures from the Office for National Statistics (ONS) have revealed that the UK economy grew 0.2% in the second quarter of the year, which is the lowest quarter-on-quarter growth since the third quarter of 2005. It grew 1.6% compared with the same quarter a year ago - also the weakest growth for three years, and much lower than ...

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July 24, 2008

Retail sales fall at fastest rate for two decades

by Kay Murchie
Official figures have revealed that UK retail sales fell 3.9% in June - this represents the largest monthly fall since records began in 1986. An unexpected 3.6% increase was announced in May, therefore, a fall of just 2.5% was forecasted by analysts for June due to consumers cutting back as they struggle with rising fuel and food costs. The ...

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July 21, 2008

Forecast for UK economy is ‘gloomy’

by Kay Murchie
Ernst & Young ITEM Club is forecasting GDP growth of just 1% next year after the UK grapples with rising inflation, falling property prices and the tightening of credit. The influential think tank also indicated that there will be a considerable increase in unemployment in the next 12 months. Ernst & Young's ITEM Club also predicts that consumer spending will almost grind to ...

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July 17, 2008

Unemployment in the UK increases

by Kay Murchie
Figures from the Office for National Statistics have revealed that unemployment in the UK increased by 12,000 to 1.62 million in the 3 months to May. The figures are the worst for 16 years after the amount of people claiming unemployment benefit rose by 15,500 in June to 840,100. Economists believe this could exceed a million by the end of 2009. In the ...

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July 15, 2008

High Street sales continue to be weak

by Kay Murchie
Figures from the British Retail Consortium (BRC) have shown only a slight sales growth on the High Street in May. Changeable weather and a cutback in consumer spending meant shoppers stayed away last month with like-for-like retail sales falling 0.4%, compared with the same period last year. According to the BRC, food sales were up slightly while the only sector to ...

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Inflation nearly double 2% target

by Kay Murchie
The growing costs of food and fuel has driven inflation up to 3.8% in June, which is nearly double the 2% target. Food inflation has increased to 10.6%, up from 8.7% in May, primarily due to the rising costs of meat. Meanwhile, petrol prices have increased significantly with the average cost of petrol rising by 5.3 pence per litre between May and June this ...

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July 10, 2008

Interest rates on hold at 5%

by Kay Murchie
The Bank of England’s Monetary Policy Committee (MPC) has met this morning and decided to keep UK interest rates on hold at 5%, which was widely expected, despite requests from businesses to cut rates following fears about a likely recession in the UK. Inflation currently stands at 3.3%, well above its 2% target rate, which is why many analysts forecasted rates to ...

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