NICE decade is over

Mervyn King declared that the NICE decade was formally over in his Inflation Report published today – NICE stood for non-inflationary continuous expansion (a good term to use in the exam) – but the combination of sharply rising food, energy and fuel prices is driving inflation higher whilst contributing to a fall in real incomes and a wider economic slowdown.

China’s Inflation Problem

China’s inflation rate has climbed to a twelve year high with consumer prices 8.5 per cent higher than they were a year ago. Much of this is the result of the spiraling cost of food (22 per cent higher over the last twelve months).

Revision: China and the UK Economy

Events and developments in one country inevitably have spill-over effects onto others. Your economics revision should consider some of these inter-relationships wherever possible. It will certainly help your analysis and evaluation. In this revision note we look at China

Revision note:
Revision_China_Effect.pdf

Chart of the Day: China’s imports of primary goods

We often read about the size of the ‘China effect’ on the demand for and prices of primary commodities traded around the world. This over-simplification ignores the impact that other emerging market economies are having on the consumption of primary products – indeed a much greater proportion of global economic growth is being provided by the resource-intensive emerging economies. Added together, the emerging economies account for 23% of global GDP whereas the US accounts for around 29%.

Chart of the Day: $6m per minute - hot money flows into China

The Chinese stock market is down and property prices have been falling in many of the major cities and the Chinese trade surplus is starting to diminish. But short term capital flows are surging into the Chinese economy at the moment - according to research from HSBC Global Economics,

Currencies hit the Headlines

Two currency movements are in the news today. Firstly the pound has fallen to an eleven year low against the Euro with one Euro now worth eighty pence. The second currency hitting the headlines is the Chinese renminbi which has appreciated beyond Rmb7 to the US dollar for the first time since 1994.

Manufacturing’s revival?

Can UK manufacturing industry enjoy a sustained revival at a time when financial services are under pressure from the credit crunch? The Engineering Employers’ Federation has produced a new report on the performance of the manufacturing sector which concludes that “manufacturing is performing strongly with a number of the indicators at their highest level for ten years.”

The Decoupling Debate

The D word - ‘decoupling’ - is at the heart of the debate regarding global economic prospects for 2008 and beyond.

The term refers to the shift by developing economies - and newly industrialising countries in particular - away from dependence on strong demand in the West for their products. 

What does China Think?

Whilst listening to the recent podcast of Start the Week, my attention was drawn to a book published at the end of the week entitled What does China Think by Mark Leonard. This looks a fascinating read, one I will try and squeeze in before next half of term kicks off! I was particuarly drawn to the random fact that because Shanghai is growing so rapidly maps of the city have to be changed every 2 weeks!!