The UK budget was released yesterday by George Osborne (UK Chancellor of the Exchequer). Come back tomorrow for an analysis of the repercussions and effects that may happen due to this budget (Mainly as I'm short on time! :S)
Wednesday, 23 March 2011
Continuing on from yesterdays post of the UK inflation figures, the Bank of England has decided to keep interest rates at its historic low of 0.5%.
The policymakers voted to keep the rates the same to keep in line with their medium term goals.
Thanks for the comments yesterday, I'll explain some of these terms:
The CPI (Consumer Price index) and RPI (Retail Price Index) is how the Government (UK in this sense) measures inflation; they measure the price of household goods and compare them year on year.
Raising the Interest rates means there will be a higher cost in borrowing money, yet the value of the currency will increase, increasing the incentive to save (a savings account will have a higher interest rate).
Interest rates were cut in many countries (USA, UK e.g.) to stimulate economic growth because of the banking crisis.
Tuesday, 22 March 2011
The CPI rose to 4.4% and the RPI rose to 5.5% both record breaking highs.
This may put the Bank of England under a lot of pressure to raise the interest rates. Tomorrow they'll be releasing their minutes to come back tomorrow for an update.
Monday, 21 March 2011
With the UK Consumer Price Index and Retail Price Index being announced on Tuesday and the Bank of England Interest Rate Minutes on Wednesday, I thought it would be very topical to mention inflation.
Thanks to raising food prices and fuel costs, it seems a few nations are experiencing rising inflation ahead of their targets. In the UK, inflation is currently double the Bank of England's target of 2 percent, if the figure is still unchanged or has increased on Tuesday, the Bank of England may take action by raising interest rates - which is bad for borrowers, especially those on tracker mortgages!
If you fancy checking out the inflation rates in different countries, the Telegraph have an excellent article: