Fighting the bank

Article Abstract:

The mythology of Wall Street holds that there are risks in being optimistic about stock prices when US interest rates are rising. The Bank of England has raised British interest rates, yet there are still deflationary forces in the British economy despite rises in the cost of houses and petroleum. The Bank of England sets rates in line with expectations two years into the future, and is cautious since forecasts are difficult to make. British rates are forecast to rise by more than US rates if the market is to be belived, since pound sterling is strong in relation to the US dollar.

Interest Rates

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The self-destructing economic miracle

Article Abstract:

United Kingdom unemployment has dropped to its lowest level for 17 years and the current account is in balance. This could help stock prices, but if savings levels drop and investment levels rise, the current account balance would worsen. This could occur if confidence increases in the UK's improved economic performance. The strength of pound sterling could also affect exports and so the current account balance. The pound may remain strong due to interpretations of lower unemployment and a current account balance as meaning that the pound's value is correct.

Balance on Current Account, Balance of trade

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