Interest rate muddle confuses Old Lady

Article Abstract:

The United Kingdom Monetary Policy Commission of the Bank of England decides on interest rates which are used as a tool to control inflation, yet economists are not certain that higher interest rates lead to lower inflation. Higher interest rates may lead to a rise in the value of pound sterling, but this is not always so. Interest rate rises can also depress demand. Inflation may initially rise following interest rate rises. This may partly due to increases in costs brought about by higher rates, and by other factors such as reduced competition allowing mark-ups.

Prices, Economic aspects, Inflation (Finance), Inflation (Economics)

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Taxing time for Brown

Article Abstract:

The United Kingdom Mar 1998 Budget follows a rise in retail sales that was more than expected in Jan 1998, when the government repaid a record level of debt. Tax increases are needed to curb demand, though not in terms of immediate government revenue needs. The government is not using fiscal policy as a tool to curb demand but as a way of financing spending on investment. Currency traders pushed up pound sterling due to expectations that interest rates would rise, and a decision on rates is due in Mar 1998.

Legislative Bodies, Budget, Budgeting, Budgets

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Hopes grow for early European interest rate cut

Article Abstract:

European interest rates could be reduced for reasons which are examined in detail.

Europe

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