Abstracts » Business

No rise needed

Article Abstract:

NatWest Markets argues that there is no need to increase United Kingdom interest rates, despite wage inflation at more than 4.5%, while price inflation is 2.5%. Unit wage cost increases are likely to affect profits before they push up inflation, and prices are likely to be kept low so that companies can retain their market shares as demand slows. Wage inflation is likely to drop as unemployment rises and the economy weakens. Arguments on wther unemployment is below its natural level founder on the difficulty of assessing what that level is.

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Waiting for the Bank to move

Article Abstract:

United Kingdom interest rates may be reduced by the Bank of England in Oct 1998, and this is linked to a drop in wage inflation and indications of slower economic growth. Pound sterling is overvalued, which hurts exporter. Stock prices have dropped, and this could lead to a drop in consumer spending as well as a drop in real estate prices. There is a risk of recession from lower consumer spending and house price falls, though United Kingdom economic growth is still healthy in the quarter to Oct 1998.

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The squeeze is on

Article Abstract:

Cost increases due to rising petroleum and import prices, and strong demand, mean that British interest rates may be raised. This could affect stock prices.

Petroleum industry

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