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Posts tagged to bank of england

UK Economy – held back by euro area Treaty

MarketLine

The Maastricht Treaty has been slowly asphyxiating any possibility of sustained economic recovery in Britain. It has been partially responsible for the erratic recovery of manufacturing, production and construction industries. The Gross Domestic Product (GDP) of Britain peaked back at pre-crisis level in the second quarter of 2013 driven mainly by the growth of the services industry. This industry is 13 per cent larger in value compared to 2009 (figure below). Production, construction and manufacturing industries are on average 7% smaller than their pre-crisis levels. The majority of UK industries… Read more

Keep calm and take advantage. Deflation, good for the consumer, not so good for business

MarketLine

On Tuesday, May 19, 2015, it was announced by the Office for National Statistics (ONS) that the UK had fallen into deflation for the first time since 1960. The Consumer Price Index (CPI) fell by 0.1% in the year to April 2015, compared to no change (0.0%) in the year to March 2015. According to the ONS, this is the first time the CPI has recorded a decline over a year since official records began in 1996, and is the first instance of deflation when using comparative data since 1960…. Read more

Is Quantitative Easing (QE) a good detox for banks?

MarketLine

International financial markets became dysfunctional and credit dried up following the collapse of major banks and insurance companies in the US and UK in 2008. At that time, commercial banks were desperate for cash to cover their asset and liability mismatches. In response to highly negative events, the Bank of England (BoE) launched the Quantitative Easing program, with the aim of re-establishing credit conditions by increasing inter-bank lending and, consequently, supporting the overall level of economic activity. Did it work? Apart from the increase in unemployment rates, the major risk… Read more