Article Abstract:
The financial crisis in Asia could have positive repercussions in the form of a fall in interest rates worldwide. Long-term interest rates on government bonds were falling in the UK and other major parts of the world even before financial markets began to take the view that Asia's economic difficulties would help to limit global inflation. It is now important to consider whether lower bond yields will persist. If this were the case, then conditions would be eased for businesses considering capital expenditure, and structural unemployment may be cut, especially in continental Europe.
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Article Abstract:
The medium-term prospects for the US economy do not appear to be very positive. It is unlikely that medium-term growth will be sustained at much higher than 2% without bottlenecks emerging. At some point, private sector spending will fall to a rate at best equal to, and more likely lower than, the growth of incomes. Fiscal explosion offers potential, but it would be necessary for the US and Europe to undertake coordinated fiscal pump priming, which appears unlikely.
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Article Abstract:
The inflation forecasts produced by the Bank of England still contain a considerable degree of uncertainty. Its approach to inflation forecasting brings together a number of sources of uncertainty and is not precise enough about the conditions which could prompt inflation to rise or fall. A better approach would be to present charts forecasting inflation as an indication of the problems which the economy may face.
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