Economic News

Wages: we are still getting poorer but might this change soon?

Back in May 2010, increases in average wages were less than the rate of inflation. It has been that way every month since. Consumers may be feeling more confident, retail sales may be up, but one thing is sure, the improvements in sentiment are not down to rising wages. But...Read More

UK inflation rises again. Will Carney have to write a letter?

It’s not long now. Mark Carney will be settling into his new job as the governor of the Bank of England in a few weeks’ time. Alas, if the latest inflation data is any guide, one of his first tasks may be to write to George Osborne explaining why inflation...Read More

Posted Jun 18, 2013

Wages rise faster than inflation: cause to celebrate or just a blip?

In April wages, including bonuses, fell by 0.3 per cent. This was a staggeringly awful piece of economic data, but was it just a one-off?

This morning data for May was out, and it was much better, with average wages rising 3.3 per cent in the year to May. During the same...Read More

Posted Jun 12, 2013

Will rising inflation spoil the market’s party?

Be under no doubt, record low interest rates and quantitative easing are the main reasons why equities are riding high at the moment. There is this view that central banks control interest rates; that they can determine flows of money. So why panic about rising rates spoiling the party? Central...Read More

Posted May 22, 2013

Shop price inflation at lowest level since 2009

What is this? Can it be true? Shop price inflation in April was just 0.4 per cent, compared to 1.4 per cent in March, or so says the British Retail Consortium.
It is a bit of a contrast with the data from the ONS on consumer price inflation. The ONS...Read More

Posted May 09, 2013

Will inflation take-off? The return to rising interest rates?

It is the great dread. Right now, inflationary pressures are weak in the Eurozone, and deflation is seriously looking like it is back on the agenda. But suppose, just suppose, that from out of nowhere inflation starts to rise, and central banks find that, in order to keep it in...Read More

Posted May 03, 2013

UK sees real wages go into even deeper negative territory

The question is why? Why was it that not so long ago economists were confidently predicting that average wages would rise while inflation fell?

Okay, we know why they thought inflation would fall, and let’s not go over that old ground. But why did they think wages would rise?Read More

Posted Apr 18, 2013

Inflation: it is down in Europe, much further down in the US, but guess where it remains sticky?

In the Eurozone inflation was just 1.7 per cent in March, from 1.8 per cent the month before. It is now at its lowest level since August 2010. Here is the puzzle, though. ECB boss, Mario Draghi says: “He is ready to act.” But this begs the question: act on...Read More

Posted Apr 17, 2013

Wages expected to lag behind inflation until 2014

In the three months to January, average wages both with and without bonuses rose by 1.2 per cent. Inflation, as measured by the CPI, was 2.7 per cent. At the beginning of 2012, for some extraordinary reason economists were predicting that by the second half of that year growth in...Read More

Posted Mar 21, 2013

Growth disappears down the OBR

Have you noticed that the year after next is always supposed to be better?
Ever since the economic crisis of 2008, economic forecasters have been predicting that not next year, but the year after things will be back to normal. So in 2008, the year 2010 was the year when...Read More

Posted Mar 21, 2013

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