Tuesday, August 16, 2011

UK CPI inflation rate rises to 4.4% in July


The rate of Consumer Prices Index (CPI) inflation rose to 4.4% from 4.2% in June, according to figures from the Office for National Statistics (ONS).

The Retail Prices Index (RPI) measure was unchanged at 5%.

Clothing and footwear prices measured for CPI saw their biggest annual increase since records began in 1997.

Bank of England governor Mervyn King has written another letter to the chancellor to explain why CPI inflation remains well above the 2% target rate.

The governor must write a letter every three months if CPI is more than one percentage point above or below the target.

He blamed the continuing high inflation rate on, "the increase in the standard rate of VAT to 20%, and past increases in global energy prices and import prices".

He also stressed that "the big risks currently facing the UK economy come from the rest of the world".

The Bank of England said last week that it remained confident that inflation would return to its target level in the next two years.

source: BBC

Thursday, August 11, 2011

US overall trade deficit is the highest in 32 months




The trade gap rose from an upwardly revised $50.8bn in May, the Commerce Department said, a bigger rise than analysts had expected.

Industrial goods accounted for much of the fall in exports.

The figures come amid growing concerns about the US economic recovery and the country's high debt levels.

Total exports for the month fell by $4.1bn to $170.9bn, while imports fell by $1.9bn to $223.9bn.

Consumer goods exports actually increased, while cars and car parts were virtually unchanged from the previous month.

Imports and exports of services were virtually unchanged.

The US's deficit with China grew to $26.7bn, up from $25bn in May, while that with the European Union rose by $1bn to $9.8bn.

The US recorded a trade surplus with Hong Kong, Australia, Singapore and Egypt.

Source: BBC News

Monday, August 8, 2011

US lost an A in ratings


NEW YORK (CNNMoney) -- The Triple-A debt club just got even more exclusive: Late Friday, the United States was booted out of a prestigious group of countries that boast a spotless credit rating.
Now only 15 countries (and the very small Isle of Man) hold the triple-A rating from both Standard & Poor's and Moody's.
Canada, France, Germany, Norway, Sweden and Switzerland are among those with the undisputed stamp of approval -- so is Isle of Man, a British crown dependency off the United Kingdom's west coast, and Singapore (both of which are too small to see on our CNNMoney map above.)
The triple-A rating enables nations to borrow funds at a low cost, because their governments are considered stable and their bonds safe.
S&P downgrades U.S. credit rating
The United States for example, has seen its dollar become the world's No. 1 reserve currency because its bonds are held in such high regard by investors. They're backed by the "full faith and credit of the U.S. government" -- which until now, has never seriously been called into question.
On Friday, S&P downgraded the United States to AA+, an investment grade level just one notch below triple-A. It marked the first time the world's largest economy has been downgraded, since Moody's first gave the country a credit rating in 1917.
S&P cited estimates that U.S. government debt would balloon to 79% of the size of the entire U.S. economy by 2015, and 85% by 2021 -- a level S&P says is consistent with AA+ rated countries.
In comparison, estimates from the International Monetary Fund show triple-A rated Canada's debt is likely to only rise to 34% of its economy by 2015, and Germany's is forecast to rise to 52%. (The IMF does not publish forecasts out to 2021).
Your money in a AA-rated U.S.
The debt of Belgium, another AA+ rated country on S&P's list, is expected to grow to 85% of GDP by 2015, according to the IMF.
Abu Dhabi, with a AA rating, is just a step below AA+. Also in that group are Bermuda, Chile, Qatar, Slovenia and Spain.
Meanwhile, China -- the world's second largest economy -- is rated two notches below the United States, at AA-.
Greece -- the lowest rated country in the world -- is forecast to see its debt well exceed the size of its economy, at 149% the size of its GDP in 2015.