Huge falls in consumer spending reported

National Income
The all important C for consumer spending is down in 70% of households.
read more...

US carmakers fail to secure bailout

If one (or more) of the big US car manufacturers goes bust, the consequences will be felt far beyond America's borders.

read more...

The New Capitalism

Economic Systems / Recession

The BBC's Robert Peston on the possible impacts of this financial crisis.

"Arguably the global economic crisis will turn out to be more significant than the collapse of communism."

"We're building the economic equivalent of bomb shelters..."
read more...

What about the developing economies?

International Economy

The Millenium Development Goals have slipped off the agenda lately, eclipsed by financial sector woes closer to home.

read more...

The dangers of over-reliance on Keynesian policy...

Economic Systems / Keynesian Policy
An interesting piece of opinion from the Independent on the need for governments to have an "exit-strategy" from their involvement in the economy, so that markets can function efficiently again.
read more...

Should Britain consider joining the €uro?

Currencies

With sterling taking a "pounding", this question has emerged again. It's a complex issue which mostly rests on the degree of convergence between the business cycle in the UK and that in the eurozone.

read more...

The fall of sterling

Exchange Rates

Interest rate cuts tend to weaken the national currency as "hot" money moves to countries which offer a better rate of return. However, a weaker £ could help exporters as UK products become more affordable for overseas buyers.

From the Guardian: read more...

From the Independent: read more...

Cost of Borrowing drops to 2%

Monetary Policy

The Monetary Policy Committee have announced a further 1% cut in interest rates from 3% to 2%, the lowest rate in 51 years.

Bank of England press release: read more...

BBC: read more...
FT on the implications for sterling: read more...

Effects of inflation

Some resources on the effects of inflation. (Homework for Mr Irvine's class is due Friday 5 Dec.)

Tutor2u resource on the costs of inflation - read more...
BBC Q&A article - read more...

The image shows a German woman burning money to keep warm. In what year was the picture most likely to have been taken?

Bank of England Inflation Resources

Inflation

Check out these useful resources on the BoE site - a chart of inflation since 1793, a map showing dramatic inflation stories across history and some useful films explaining inflation and the bank's role.

read more...

China slashes interest rates

Monetary Policy

China is nowhere close to recession (negative growth) but is experiencing a slowdown. Growth forecasts have been cut from 9.2% to 7.5%, demand pull inflation has eased off and the authorities are using monetary policy to help inject more money into the system again.

read more...

Europe anounces €200bm stimulus package

They're all at it! Fiscal stimulus is the trend of the day... but what about Europe's strict fiscal rules as outlined in the Stability Pact. Will they ditch them as easily as Labour ditched Brown's golden rules?

read more...

VAT falls by 2.5% but is it enough?

Fiscal policy

The government are attempting a fiscal stimulus but many economists believe that changing VAT from 17.5% to 15% will have little impact.
read more...

Pre-budget report

Fiscal Policy

Today, the Chancellor unveiled his plans for the UK economy in his pre-budget report.
read more...

Economist this week

Try the articles on UK unemployment (p36), Eurozone unemployment (p46), the fall of the Russian rouble (p50) and fiscal stimulus in the US (p54).
read more...

Drowning in red ink

Government Borrowing
Excellent but gloomy pdf graphic on the state of the government's finances...
view graphic...

CPI falls to 4.5%

Inflation

As expected, inflation has dropped from the high levels seen last month.

read more...

Eurozone swings to trade deficit

International Trade and Payments

The Eurozone is now experiencing a trade deficit, meaning that imports exceed exports.

read more...

BBC Video: Borrowing to boost our circular flow...

National Income / Fiscal Policy
Good news clip on the Government's plans to boost National Income through increasing G and reducing T (all financed by more borrowing)! But will this just undermine the pound??

view clip...

The Economist this week

126 pages is far too much to deal with in a single week! Concentrate on the articles on fiscal stimulus in China (P14/87), UK interest rates (p38) and the threat of deflation (p93). Copies in the library.

read more...

Japan battles with recession and deflation

National Income / Inflation

Japan's economy is very different to the UK's, being mainly driven by manufactured exports. They are being hit hard by the credit crunch as orders from overseas dry up...

read more...

CBI revises recession forecast

Unemployment

The Confederation of British Industry has revised its predictions for growth and unemployment and the outlook is gloomy...

read more...

Recession, Unemployment and the fall of the Pound

As usual, lots of Economics across the front pages this week. Most notably:

Inflation / National Income
On Wednesday, the Bank of England released their latest projections for inflation and economic growth.
read more...

Business Cycles
The Eurozone is in its first ever recession...
read more...

Unemployment
Extensive job cuts across several sectors announced this week. Perhaps closest to home - RBS are cutting 3,000 of its workforce...
read more...

Exchange Rates
Sterling continues to fall against the $ and the €.
read more...

Inflation soars but for how long?

Inflation

Inflation hit 5.2% this month but Mervyn King and the MPC are pretty confident that it won't stay high for long. There is very little demand-pull evident and the cost-push pressures from oil and food prices seem to be abating.

read more...

Government Borrowing Soars

Fiscal Policy
The government are trying a fiscal stimulus to boost the circular flow of income. However, this can only mean more borrowing (on top of the huge banking bailout) and it looks like the golden rules set by Gordon Brown have already been broken.
read more...

About this blog

This blog will be used to highlight relevant Economics news stories on a week-by-week basis. It is intended to help students of Intermediate 2, Higher and Advanced Higher Economics stay up to date with events that relate directly to their SQA course of study.

Note: These are nowhere remotely close to all the relevant stories. The blog will carry only a small selection. It is just a tool to break the bulk of media that you need to engage with.