MM
2017-07-24 08:08:10 UTC
"The sharp fall in sterling triggered by the EU referendum result is
having an adverse effect on Britains already weak public finances but
has yet to bring about the expected improvement in the trade deficit,
a Guardian analysis of the economic news of the past month shows.
"In a period in which business confidence took a hit from the
governments loss of its overall majority in the general election, the
Guardians monthly tracker found little evidence that the impact of a
more competitive currency was offsetting a slowdown in consumer
spending caused by dearer imports.
"The latest data suggests the first official estimate of growth in the
second quarter -- due on Wednesday -- will show a modest pickup from
the 0.2% recorded in the first three months of 2017 but will not match
the robust expansion recorded in the first six months after the Brexit
vote."
"The public finances were £2bn deeper in the red in June than in the
same month of 2016 -- with half the rise due to the higher debt
interest on government borrowing caused by higher inflation.
"The former Bank of England policy maker, Andrew Sentance, said he
expected the second quarter growth figures to show the economy was
expanding at a annual rate of just 1% in the first six months of the
year.
" 'It is not hard to explain why the momentum of consumer spending has
stalled so badly,' said Sentance, now a senior economic adviser at
PricewaterhouseCoopers. 'Real wages are now falling, even though
inflation fell back to 2.6% in June. The main reason for the fall in
inflation was the drop in the oil price, but it is still reasonable to
expect inflation to rise above 3% later this year as the weakness of
sterling continues to feed through to the prices paid by consumers.' "
https://www.theguardian.com/politics/2017/jul/24/brexit-economy-sterling-fall-hits-public-finances-and-fails-to-boost-trade
Oh dear, Norman! Interest rates might rise above 3%! What on earth
shall we do? Buy gold?
MM
---
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having an adverse effect on Britains already weak public finances but
has yet to bring about the expected improvement in the trade deficit,
a Guardian analysis of the economic news of the past month shows.
"In a period in which business confidence took a hit from the
governments loss of its overall majority in the general election, the
Guardians monthly tracker found little evidence that the impact of a
more competitive currency was offsetting a slowdown in consumer
spending caused by dearer imports.
"The latest data suggests the first official estimate of growth in the
second quarter -- due on Wednesday -- will show a modest pickup from
the 0.2% recorded in the first three months of 2017 but will not match
the robust expansion recorded in the first six months after the Brexit
vote."
"The public finances were £2bn deeper in the red in June than in the
same month of 2016 -- with half the rise due to the higher debt
interest on government borrowing caused by higher inflation.
"The former Bank of England policy maker, Andrew Sentance, said he
expected the second quarter growth figures to show the economy was
expanding at a annual rate of just 1% in the first six months of the
year.
" 'It is not hard to explain why the momentum of consumer spending has
stalled so badly,' said Sentance, now a senior economic adviser at
PricewaterhouseCoopers. 'Real wages are now falling, even though
inflation fell back to 2.6% in June. The main reason for the fall in
inflation was the drop in the oil price, but it is still reasonable to
expect inflation to rise above 3% later this year as the weakness of
sterling continues to feed through to the prices paid by consumers.' "
https://www.theguardian.com/politics/2017/jul/24/brexit-economy-sterling-fall-hits-public-finances-and-fails-to-boost-trade
Oh dear, Norman! Interest rates might rise above 3%! What on earth
shall we do? Buy gold?
MM
---
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http://www.avg.com