Wednesday, January 20, 2010

Temporary spikes and dips

Yesterday's figures from the Department for National Statistics showed the Consumer Price Index surging to 2.9% in December. Vince Cable commented: 

“These figures are almost certainly a temporary spike. 

“With inflation expected to fall quickly, it seems unlikely that the Bank of England would want to raise interest rates in the near future.

“Any recovery in the economy is still very fragile, it would be all too easy to destroy it by putting the brakes on too soon. 

“However, the MPC still needs to be acutely aware of the longer term inflationary dangers. 

“With the world economy improving at a much quicker rate than the UK, there is a danger that high food and energy prices could hit our economy before it has had chance to recover.” 

Frank Little, prospective candidate for  Neath at the general election, added: "It is almost certain that the fall in unemployment, reported today, is sadly also a one-off. Not only have the already announced redundancies yet to show up in the figures, but retail activity is bound to slow as VAT returns to its 2008 level. Then there are the unannounced, but likely, sackings in the West Midlands resulting from the takeover of Cadbury, and similar cost-saving measures by multi-nationals as they try to restore their profitability.

"The potential employment gains from Toyoda in Gorseinon do not compensate for the 900 losses at Bosch in Cardiff."

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