Huge falls in consumer spending reported

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

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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..."
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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.

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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.
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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.

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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?