It has been a rough week for the financial markets. Financial stocks have lost two-thirds of their value. Government debt has spiralled due to the bank bailouts, although it has become apparent that not all governments can finance this debt. All the pessimistic financial statistics and news stories released over the last few weeks have resulted in real fear that the world economy is sliding back into recession.
We’ve highlighted some of the other news stories form the past week to keep you up to date:
- The Office for National Statistics (ONS) announced that the consumer price index (CPI) rate of inflation rose from 4.2% in June to 4.4% in July, while the retail price index (RPI) inflation was unchanged at 5.0%. The inflation rate remains well above the Bank of England’s 2% target rate, for the 20th month in a row.
- This meant bad news for rail commuters who under the new price rise formula will be faced with increased rail fares of around 8%. The government and rail regulators stress that the increase in rail ticket prices are required to pay for better services. Due to the scale of the deficit these investments would not be possible without charging commuters more, since the government does not have any funding to invest in rail services.
- Economists were surprised to learn that the UK level of unemployment has increased after predicting a fall. The number of unemployed people in the UK rose by 38,000 to 2.49 million in the three months to June, the Office for National Statistics (ONS) has said. The unemployment total is now at its highest level since February 2010, and the jobless rate has risen to 7.9%. The number of people claiming Jobseeker’s Allowance rose by 37,100 in July to 1.56 million, its biggest increase since May 2009.
- Many RBS customers were angry to find out that RBS would be charging them to use rival banks’ ATM machines. The change applies only to holders of the no-fee basic account. The Bank commented that “It is unsustainable for us to offer free access to other bank ATMs for basic accounts as we face a charge per bank transaction, which needs to be recovered elsewhere”.
Which news stories affected you the most this week? We’d love to hear your comments.