Whatever happened to inflation?

Article Abstract:

The UK's average inflation rates have remained low in recent years. Current inflation rate is below 2% if the one-off effects of indirect tax changes and interest rate fluctuations are disregarded. The coming of a new era of low inflation can be partially explained by the cyclical position of the world's leading economies. In the recent past, sluggish or negative economic growth has resulted in large differences between actual and capacity output, which is indicative of downward pressure on inflation. Other non-cyclical explanations for the UK's low inflation rate include policy change, intensifying competition within and between economies, increasing price sensitivity of consumers, and the growing prominence of newly industrialized countries in the international trade arena. A sustained return to low inflation could radically transform the British economic landscape.

Inflation (Finance), Inflation (Economics)

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Anatomy of a recession

Article Abstract:

An analysis of investment statistics provides some insights into the root cause of the current recession in the UK. Data point to the decision of the business sector to reduce investment, stocks, output and employment in response to the growing uncertainty in the business environment as the real reason for the economic slowdown. Consequently, for the period 1990-1991, investment declined by 11.1%, manufacturing output plunged by 6.6% and stockbuilding fell by 1.4%. It is this decline in stocks that clearly shows that the recession cannot be blamed exclusively on the unforeseen weak domestic demand, because such a case causes stocks to increase initially. It is proposed that the fall in aggregate supply, and not the drop in demand, that deepened the recession and that demand will have to increase for the economy to recover.

Analysis, Economic development, Recessions

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What happens when the oil runs out?

Article Abstract:

In 1981, Great Britain's oil production began to exceed its consumption of oil, allowing it to export oil and oil products; in the mid-1980s Britain was producing approximately 80 percent more oil than it needed. However, as consumption figures rise, Britain will revert importing its oil some time in the 1990s. Most of Britain's economic recovery from inflation and recession is attributable to oil produced in its North Sea. As this surplus is depleted, Britain faces an uncertain economic future. Problems associated with Britain's declining ability to export oil and a brief history of the North Sea oil discovery are discussed.

International trade, Petroleum industry, Statistics, Petroleum, Economic forecasting, Great Britain

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