The way to deal with our high debt ratio is to live with it, allowing sustained economic growth to bring it down gradually over time – if you can. Fortunately, we in the UK are well placed to do this. Interest rates are low, the average maturity of the debt […]
inflation
Inflation rises to 1pc as pent-up demand pushes up prices
As a result inflation rose unexpectedly last month. Overall consumer prices rose by 1pc compared with July 2019, firmly below the Bank of England’s 2pc target, but higher than anticipated and the steepest increase since March. It could raise difficult questions for the Bank as officials work out how best […]
Falling inflation may spark radical action from the Bank of England
It seems increasingly likely that the latter is the main result. George Buckley, economist at Nomura, lists four key reasons for this disinflationary effect. First, efforts to save businesses appear to have had some success, preserving the economy’s supply side. Second, despite this, unemployment will rise and pay will fall […]
how I’m protecting myself against the threat of rising inflation
That means British government bonds, known as gilts, will necessarily fall (the amount of interest paid is fixed, so the yield rises through a fall in the market price of the bond). The fall could be very heavy for long-term gilts. For example, the 4.25pc gilt repayable in 2040 is […]
This is no time to dump the UK’s inflation target
But if nominal GDP is the magic bullet, then central banks all around the world must be doing it? Nope. As James Bullard, the Federal Reserve rate-setter said last year, to his knowledge not one central bank is using nominal GDP and in any case, “if you wanted to make […]
Rishi Sunak should scrap Bank of England inflation target to focus on GDP growth, says Jim O’Neill
“It wouldn’t guarantee a V-shaped recovery but it would certainly increase the probability of one. I do suspect there are some people around the Treasury that are probably thinking about things like this.” NGDP is the value of all goods and services produced in the economy, unadjusted for inflation. Early […]
China sees inflation slow as coronavirus weighs on consumption
TOKYO/GUANGZHOU — Slumping economic activity caused by the coronavirus is pushing down inflation in China and elsewhere. While China and many other countries have reopened their economies and factories after lockdowns to contain the spread of the disease, fears of a second wave of infections could continue to put downward […]
Virus may kickstart a new era of global inflation
The first is the way in which governments have belatedly swung behind exhausted central banks in a massive co-ordinated support scheme for economies looking into the abyss of another depression. The absence of active fiscal policy after the financial crisis was a key reason we ended up trapped in a […]
Bitcoin halving to boost its appeal as inflation hedge
TOKYO — Bitcoin has drawn renewed interest from investors seeking inflation-resistant assets at a time when central banks are printing more money to prop up flagging economies. Supplies of the virtual currency are to be halved on Tuesday, Japan time, a feature that is built into its algorithm and occurs every four years. Now, only […]
Depression or inflation: Where will Covid-19 end?
As a consequence, deeper forms of depression economics are beginning to emerge. People are not spending even what they have got, but rather saving it if for no other reason that the usual channels of spending – shops, bars, restaurants, travel, holidays – no longer exist. In such circumstances, both […]