Low inflation and lower rates are rare combination for a UK economy that has seen too many booms and bust, with lower government spending and very stable fiscal policy UK is a younger brother of US economy, the anglo-saxon model is very upbeat and strong. I agree with income growth but the concerns of BOE has always been the inflationary bout that has from nowhere seem to hit UK earlier. On that death of inflation I would assume technology and associated productivity has played a major role.
On seperate not I read this interesting piece on sell off of DOW. Most likely according to the reports <a significant selloff awaits the Dow and NASDAQ whenever they reopen, and a significant selloff is certainly warranted, considering the real impact of the catastrophes on industries like insurance, airlines and financial services, to name but a few. (One early estimate by Moody’s has the damage bill at $10-15 billion.)
The concern is that such selling be rational and not out of panic. Central banks have promised to make available as much liquidity to fellow banks as is necessary to keep the system functioning, and many expect a half-point Fed cut to aid that effort in the coming days. But with the damage so close to home, giving investors and traders a few extra days to grasp the long-term impact of this disaster may be necessary to avoid a panic-induced rupture.
In a marketplace that trades $50 billion of stocks every session, the turn-of-the-century days when a man like J.P. Morgan could open his wallet and singlehandedly keep a floor under the market are probably gone forever. This time, stability — or some semblance of it — will have to be a group effort.>
Iqbal Latif
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