Telegraph
"Sterling weakened yesterday to close at just over 90p to the euro for the first time in four months, amid renewed concern over the state of the British banking system. .....
The Bank has also indicated that it is open to loosening monetary policy further by extending its quantitative easing programme (QE) beyond the current £175bn ceiling, should conditions deem it necessary."The Bank will have little choice, other than to maintain an extremely loose monetary policy over the coming years to compensate for the sharp tightening of fiscal policy," the BNP Paribas note said, referring to the Government's need to bring the public finances under control."
Friday, 18 September 2009
Wednesday, 16 September 2009
Ireland releases details of €54bn 'bad bank'
The Times
"The Irish government's 'bad bank' will pay out €54 billion (£48 billion) to remove toxic loans from the country's main high street banks, the finance minister Brian Lenihan told the Dail today.In the biggest financial rescue package in the State's history, Mr Lenihan said the National Assets Management Agency - Nama - will issue Government bonds for €77 billion (£68.5billion) in borrowings."
"The Irish government's 'bad bank' will pay out €54 billion (£48 billion) to remove toxic loans from the country's main high street banks, the finance minister Brian Lenihan told the Dail today.In the biggest financial rescue package in the State's history, Mr Lenihan said the National Assets Management Agency - Nama - will issue Government bonds for €77 billion (£68.5billion) in borrowings."
Gordon Brown's 'costs of failure' will reach £256 billion
Telegraph
"Leaked Treasury documents have revealed the Government’s own bleak forecasts for rising welfare payments and debt interest costs. The figures, which were not revealed in this year’s Budget, show the scale of the damage that will done to the public finances by rising unemployment and the soaring national debt."
"Leaked Treasury documents have revealed the Government’s own bleak forecasts for rising welfare payments and debt interest costs. The figures, which were not revealed in this year’s Budget, show the scale of the damage that will done to the public finances by rising unemployment and the soaring national debt."
Osborne's path from austerity to prosperity is in the right direction
Telegraph
"For the Tories it was a significant victory yesterday to witness Gordon Brown finally admitting to what any sane person had concluded was necessary not just a year ago but at least two years ago as we entered this crisis. Cuts in public spending to stem the new crisis of public debt."
"For the Tories it was a significant victory yesterday to witness Gordon Brown finally admitting to what any sane person had concluded was necessary not just a year ago but at least two years ago as we entered this crisis. Cuts in public spending to stem the new crisis of public debt."
UK unemployment jumps: Britain has the sad air of the 1970s this autumn
Telegraph
"The problem for Brown and the UK is that both the Tories and the unions are right. Public spending needs to be slashed. And the consequences for the economy are going to be bloody."
"The problem for Brown and the UK is that both the Tories and the unions are right. Public spending needs to be slashed. And the consequences for the economy are going to be bloody."
Unemployment hits 14-year high of 2.47m as one in five young people are now jobless
Daily Mail
"Unemployment has jumped to its highest level since 1995 as Britain's recession continued to bite.The number of people out of work rose by 210,000 to 2.47 million in the three months to July, official figures showed today.The recession's impact on young people was underlined by jobless totals among 16-24-year-olds reaching 947,000 - the highest level since ONS records began in 1992.The jobless rate among this age group is a record 19.7 per cent, meaning one in five is looking for work."
"Unemployment has jumped to its highest level since 1995 as Britain's recession continued to bite.The number of people out of work rose by 210,000 to 2.47 million in the three months to July, official figures showed today.The recession's impact on young people was underlined by jobless totals among 16-24-year-olds reaching 947,000 - the highest level since ONS records began in 1992.The jobless rate among this age group is a record 19.7 per cent, meaning one in five is looking for work."
The three TRILLION pounds Labour blew in 12 years of profligate spending
Daily Mail
"After 12-and-a-half years of New Labour government, £3trillion - that's £3,000,000,000,000 - of our national wealth has been spent, which amounts to £50,000 for every man, woman and child in the country. ....During the economically healthy years, Gordon Brown claimed to have abolished the old boom-and-bust economics.In fact, he made this claim more than 100 times in the Commons alone. But while preaching prudence, he spent more than he collected in tax every single year he was Chancellor. .....Under Labour, the power and funding of quangos has ballooned.Although officially their numbers have dropped from 692 in 1998 to less than 564 today, the number of people they employ has risen from one million to just over 1.5 million.And their spending has risen too, from £49 billion in 1998 to £130 billion a few years later.
.....In the NHS, since 1997 the average salary of an NHS chief executive has doubled to £158,000. And there are 20,000 more NHS managers, costing in total £3billion a year.
.....In education, despite twice as much spending in real terms since 1997, our performance in the Organisation for Economic Cooperation and Development's league tables on reading, maths and science has declined. .....Ninety per cent of Britain's six million public sector workers enjoy gold-plated, index-linked final-salary pension schemes, an increase of 800,000 under Labour.That's helped push public sector pension liabilities up to £880billion, an increase of 140 per cent on 1997."
"After 12-and-a-half years of New Labour government, £3trillion - that's £3,000,000,000,000 - of our national wealth has been spent, which amounts to £50,000 for every man, woman and child in the country. ....During the economically healthy years, Gordon Brown claimed to have abolished the old boom-and-bust economics.In fact, he made this claim more than 100 times in the Commons alone. But while preaching prudence, he spent more than he collected in tax every single year he was Chancellor. .....Under Labour, the power and funding of quangos has ballooned.Although officially their numbers have dropped from 692 in 1998 to less than 564 today, the number of people they employ has risen from one million to just over 1.5 million.And their spending has risen too, from £49 billion in 1998 to £130 billion a few years later.
.....In the NHS, since 1997 the average salary of an NHS chief executive has doubled to £158,000. And there are 20,000 more NHS managers, costing in total £3billion a year.
.....In education, despite twice as much spending in real terms since 1997, our performance in the Organisation for Economic Cooperation and Development's league tables on reading, maths and science has declined. .....Ninety per cent of Britain's six million public sector workers enjoy gold-plated, index-linked final-salary pension schemes, an increase of 800,000 under Labour.That's helped push public sector pension liabilities up to £880billion, an increase of 140 per cent on 1997."
Sunday, 13 September 2009
Bribing voters with their own money is no longer an option
Telegraph
"This election will be utterly different from the 17 before it - because parties will be judged on how they cut, not how they spend, says Frank Field ....This recession, however, has damaged the structure of the economy: the Institute for Fiscal Studies calculates that it has wiped out nearly five per cent of our total wealth. That means the country is permanently poorer, and will take well over a parliament just to restore its lost wealth.
....The Government admits that, even with the economy growing once again, there will still be a gap of £80 billion in 2013 between revenue and spending. ....Each week, the Government shovels out another load of debt on to the gilt market. Despite our printing money to buy back debt under quantitative easing, the task of selling more has been far from easy – and there will be something like 35 further debt auctions between now and the next general election, with each week's batch of IOUs proving harder to sell. ...The reasons are simple. Quantitative easing is coming to an end. Britain is borrowing proportionately more than any other major economy, and lenders have a galaxy of countries from which to choose. When the Government is unable to print any more new money to buy its own debt, the market will insist on higher long-term interest rates. This will not only make it more difficult to sustain an economic recovery, but it will increase the cost of servicing this debt."
"This election will be utterly different from the 17 before it - because parties will be judged on how they cut, not how they spend, says Frank Field ....This recession, however, has damaged the structure of the economy: the Institute for Fiscal Studies calculates that it has wiped out nearly five per cent of our total wealth. That means the country is permanently poorer, and will take well over a parliament just to restore its lost wealth.
....The Government admits that, even with the economy growing once again, there will still be a gap of £80 billion in 2013 between revenue and spending. ....Each week, the Government shovels out another load of debt on to the gilt market. Despite our printing money to buy back debt under quantitative easing, the task of selling more has been far from easy – and there will be something like 35 further debt auctions between now and the next general election, with each week's batch of IOUs proving harder to sell. ...The reasons are simple. Quantitative easing is coming to an end. Britain is borrowing proportionately more than any other major economy, and lenders have a galaxy of countries from which to choose. When the Government is unable to print any more new money to buy its own debt, the market will insist on higher long-term interest rates. This will not only make it more difficult to sustain an economic recovery, but it will increase the cost of servicing this debt."
Bank's code of omertà broken
Telegraph
"The account is all the more remarkable because of the shroud of secrecy the Bank has managed to sustain, despite its 12 years in the spotlight since being granted independence. Of all the impenetrable institutions of state – the Kremlin, the inner recesses of Number 10, the Secret Intelligence Service – few can rival the Bank when it comes to secrecy."
"The account is all the more remarkable because of the shroud of secrecy the Bank has managed to sustain, despite its 12 years in the spotlight since being granted independence. Of all the impenetrable institutions of state – the Kremlin, the inner recesses of Number 10, the Secret Intelligence Service – few can rival the Bank when it comes to secrecy."
The story from the inside
New Statesman
"In this exclusive account of decision-making at the Bank of England, David Blanchflower, who this week joins the New Statesman as our economics columnist, reveals how Mervyn King’s mistakes made the recession worse".
"In this exclusive account of decision-making at the Bank of England, David Blanchflower, who this week joins the New Statesman as our economics columnist, reveals how Mervyn King’s mistakes made the recession worse".
Cheap dollars are sowing the seeds of the next world crisis
Telegraph
"After years of selling cheap goods to debt-fuelled Western consumers, China now has $2 trillion dollars of foreign exchange reserves. That's 2,000 billion – a reserve haul no less 25 times bigger than that of the UK. ....More than half of China's reserves are denominated in dollars. So when the dollar falls, China loses serious money. When you're talking about a dollar-reserve number involving 12 zeros, even a modest weakening of the greenback sees China's wealth takes a mighty hit."
"After years of selling cheap goods to debt-fuelled Western consumers, China now has $2 trillion dollars of foreign exchange reserves. That's 2,000 billion – a reserve haul no less 25 times bigger than that of the UK. ....More than half of China's reserves are denominated in dollars. So when the dollar falls, China loses serious money. When you're talking about a dollar-reserve number involving 12 zeros, even a modest weakening of the greenback sees China's wealth takes a mighty hit."
Thursday, 10 September 2009
Prospect of spending cuts saves Britain's AAA credit rating
The Times
"Moody’s said that although Britain’s public finances had “deteriorated considerably” and brought it “very close” to a possible ratings downgrade, likely public spending cuts after the general election meant that the UK would continue to enjoy an AAA rating. The verdict is significant because a country’s ability to borrow money, and its cost of borrowing, are determined to a large degree by its credit rating."
"Moody’s said that although Britain’s public finances had “deteriorated considerably” and brought it “very close” to a possible ratings downgrade, likely public spending cuts after the general election meant that the UK would continue to enjoy an AAA rating. The verdict is significant because a country’s ability to borrow money, and its cost of borrowing, are determined to a large degree by its credit rating."
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