Archive for October 2010

Tug Of War For Currencies

October 29, 2010

With many countries attempting competitive devaluation at the moment, the tug of war between currencies is being played out on a global scale on the eternal premise that if one currency goes up in value, another must come down; as is the nature of ‘valuation’ in the global markets.

Because of this nature, by definition, no two currencies can move in the same direction. One’s gain is another’s loss.

These changes are being fortified and artificially exaggerated by countries such as China and Japan interfering with their own currencies in order to counter-act inflation in the market. They do this by effectively buying and then selling their own currencies to generate currency movements that would otherwise have been different.

Such interference has generated an enormous amount of tension between countries (those who condone the practice, and those that do not) and the situation has been ominously labelled the ‘new currency wars.’

Two countries in the limelight at the moment are the US and China who have been publicly opposing each other at a host of financial conferences and crisis talks. The US is voicing concerns over China’s interference in it’s Yuan (otherwise known as the Renminbi) which it terms as currency manipulation.

In response to this, China has branded the US as using them as a scapegoat for their own economic problems which include a sluggish economy fuelled by high unemployment.

As more and more countries jump on the intervening band-wagon, we are seeing countries such as Brazil, Japan and Korea becoming involved in the global tug of war, as temperatures continue to rise.


Good News For UK Growth Figures

October 27, 2010

Today, it was revealed that Britain’s economy grew better than economists had predicted in the third quarter. Such positive data strengthens the hopes resting on a stable recovery for the UK.

The growth-marker was read at 0.8% which was roughly twice the increase that top economists had predicted for Q3. This brightens the fact that the actual quarter-on-quarter rise was less than previous readings which stood at 1.2% in the previous quarter.

The Office for National Statistics has recorded that over the last six months, economic growth has now hit the 2% threshold which sees the speediest pace of expansion in that period (2 quarters) for the past 10 years. This is quite a sterling result and its effect is one of fortification for post-recession recovery hopes.

Each year, the growth results display a return to pre-recession economic health. It is thought that the data will now boost the government’s deficit-busting plans.

David Cameron commented on Monday that there would be “a relentless focus on growth” which should help to fill the void left by the coalition’s austerity levels.

The news might do something to soothe the rather disappointing economic data that suggested both business activity and consumer spending has declined.

Cameron To Secure Economic Recovery With New Plans

October 25, 2010

With all the cuts that the coalition government are making, many of us could be forgiven in thinking that the UK might just slip back into a double-dip recession.

However, Prime Minister David Cameron will today explain how he proposes to nip this bud of fear in the neck by announcing a business strategy which is aimed at fortifying Britain’s economic recovery.

The strategy will be aimed at economic growth and will reveal a national infrastructure plan which includes growth targets. The plan has already found enormous support with around £200 billion of backing.

The strategy will be introduced at the Confederation of British Industry and presented to attendees by Cameron, deputy prime minister, Nick Clegg and the business secretary, Vince Cable. It is thought that the prime minister will say that the new plan will “transform our fortunes” post-recession.

The government is not only battling against a weak economy, but also criticism from their opposition that they have not sufficiently explained how they intend to stabilize UK economy. With news that the GDP is slowing (from 1.2% in Q2 to 0.4% in Q3), a firm recovery plan is what many people were waiting for.

More Jobs To Be Cut

October 19, 2010

As Britain awaits the Governments ‘austerity’ spending review, it has been announced that one in 10 small businesses is going to have to make drastic cut backs over the next few months.

The news is outlined further in a report by the company that carried out the research, The Federation of Small Businesses which comments on the cautious nature of both the employment sector and the economy. Charles Davis, managing director comments in the article for Economist’s View,

“Reflecting these risks, businesses expect sales to weaken in the coming three months and employment to decline.”

He adds, “This suggests the private sector remains cautious about ‘putting their money where their mouth is’, as overall economic growth is expected to slow.”

Davis is commenting on the fact that far from being able to develop businesses by employing young, fresh talent, entrepreneurs are going to have to make cut backs and let go of employees as they struggle with the uphill financial battle.

The groundbreaking research estimates that as many as 600,000 jobs could disappear over the coming years from the public sector which leaves many people seeking refuge in the private jobs sector which currently employs one in five Britons.

However the research shows that far from picking up the cut-backs from the public sector, private sector businesses cannot employ new recruits either and are having to make serious cut backs as well. Small firms commented that they were cautious about the strength of the recovery and over a double dip recession.

John Walker, of the Federation of Small Businesses commented ‘The Government is looking to the private sector to create jobs and take on the people who will be made redundant as a result of the cuts. Evidence from this report shows that small firms do not have the confidence to do that yet.’

Threat Of Currency War Casts Shadow Over Global Relations

October 15, 2010

Today, Pascal Lamy who is in charge of overseeing global trade, announced that the ever-growing friction between countries could well result in 1930’s style protectionism.

The tensions are being caused by a difference of opinion surrounding currency handling within countries; whilst a minority of countries are intervening in their own currencies in order to manipulate their own economy, others such as the U.S. agree that this action creates an artificial environment and disrupts global balance.

This saw states restraining trade between each other in order to prevent foreign take-over of domestic markets and companies. Sanctions on imported goods were generally made.

In what Lamy sees as a slippery slope situation, he is concerned that it will develop into a country closing themselves off to another country by raising barriers to imports.

In what has been a monumental effort of restraint from the U.S., the American government have managed to refrain from branding China as manipulators. If this was to happen, the situation might change at a fast rate, with the threat of protectionism being more imminent.

Britains Need To Save More!

October 14, 2010

According to research by banking giant HSBC, the one in every three Britons could not survive a week on their current savings.

The pessimistic research reveals that a third of Britons which amounts to fifteen million of us have a less than desirable amount in our savings accounts: £249 or less to be precise. The amount is equated to the average Britons’ take-home salary after a 5-day week of working

The research also shows that 11% of us have some savings but these unsubstantial amounts are less than £249 and surprisingly, almost 20% of us have absolutely no savings at all. This is despite the fact the government advice that the minimum amount of savings one has should be equivalent to three months pay, which at the average pay amount, would be equivalent to £4,683. This is the recommended amount to cover people for unforeseen circumstances such as redundancy, job-loss, illness or anything else.

News that can be read alongside this worrying data is the fact that those claiming jobseekers allowance has increased to 1.47 million which show the fastest rate of increase since January.

PPI Claims-What You Should Do

October 13, 2010

If you have been miss-sold a PPI then you are not alone. Thousands of us in the UK are in a similar situation and what a lot of people don’t know is that if you have got a loan, credit or store card in the last six years, you may be able to reclaim £1,000s.

The miss-selling of expensive Payment Protection Insurance (PPI) is particularly common alongside the outlined financial products.

However, what we are seeing at the moment is banks such as Lloyds, Halifax and Bank of Scotland putting all their customers PPI claims on hold and going against the regulations of the Financial Services Authority which states that all such claims must be reviewed and responded to. If the Financial Services Authority get their way, such banks will need to pay out as much as £2 billion in order to pay back all customers who have been miss-sold a policy.

So what can you do if you are a victim of unfair charges?

The bottom line in PPI reclaiming is to be as persistent as possible. What you will find is that a lot of banks put customers off by putting their claims on hold. This acts as a deterrent for the majority of people following through with their claims unfortunately.

If you are resilient then it is highly likely your claim will be processed, however the news that many banks are going against official regulations makes the reclaiming process seem even harder. Persistence and thoroughness are the key words though.