View more on these topics

Don’t fear low inflation, says Osborne

Chancellor George Osborne says the sharp drop in UK inflation should not be feared as he tries to distance the UK from what is happening in the eurozone.

The BBC reports that in a speech later today Osborne will say the UK could experience “a few months of very low or even negative inflation” without significant risk to the economy.

It comes after the news yesterday that the consumer prices index fell from 1 per cent to 0.5 per cent in December, its lowest since May 2000.

In a speech to the Royal Economic Society, Osborne will say the fall is being driven by the collapse in the oil price, and is “much more welcome” than the -0.2 per cent drop in inflation seen in the eurozone.

He will say: “There [in the eurozone] the debate has understandably turned to the dangers of deflation – the risk of a self-reinforcing spiral where economic activity falters, consumers defer purchases as prices fall and nominal debt burdens become ever harder to manage. 

“Rising real incomes, a recovery spreading to all parts of our economy, and family budgets that can stretch that little bit further – let’s celebrate these effects of low inflation, not fear them.” 

Bank of England governor Mark Carney also told the BBC yesterday the central bank had the tools necessary to deal with the risk of deflation, and to get inflation back to its 2 per cent target.

Recommended

Business-Handshake-General-Hire-Appointment-700x450.jpg

Former Transact marketing head Malcolm Murray joins London & Capital

Former Transact head of marketing Malcolm Murray has joined wealth management firm London & Capital as a consultant. Murray, who left Transact in July 2013 after 13 years, joins Adviser Solutions, the company’s discretionary management service for advisers. L&C says Murray will drive promotion of the Global Model Portfolio range. The total fee for the […]

Boardroom-Business-Finance-Corporate-Meeting-Hire-700x450.jpg

Payment Systems Regulator makes three senior hires

The Payment Systems Regulator, which will regulate the £75trn payment systems industry from April, has appointed three heads of department. Carole Begent joins as head of legal from the Competition and Markets Authority, where she is senior legal director. She has previously worked for the Competition Commission where she was deputy chief legal adviser. Mark […]

Ken-Davy-700.jpg

SimplyBiz mulls flotation or sale of business stake

SimplyBiz is considering floating the business on the Alternative Investment Market or selling a stake in the firm. The compliance and support services firm says it is working with corporate finance adviser BDO to consider its future options. It says these may include an IPO or the sale of a stake in the business to […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Given that the EuroZone is Britain’s biggest trading partner, it seems somewhat disingenuous to suggest that we shouldn’t worry about what’s happening there.

Leave a comment