Current Event

Here is my current event and writeup for this week.

Article, "Bank of England: Inflation to fall below 2%"

Here is the link and the writeup is below.

http://money.cnn.com/2008/11/12/news/economy/boe_inflation.ap/index.htm


Current Event

In this article, "Bank of England: Inflation to fall below 2%," from CNNMoney.com, the author talks about the current situation in Britain and how inflation is beginning to fall and will most likely be below the predicted 2% within the next year. Inflation rose to 5.2% during September of his year because of oil and fast food prices. The Bank of England expects to see inflation plummet because of the near recession fears and reduced consumer spending. Bank of England governor Mervyn King says, "Inflation will fall below targets, but we aim to get back there in the medium term." The bank can lower the base interest rate and, in turn, could increase the rate of inflation because it normally stimulates consumer spending. They have already slashed their rate by 1.5% this year to try and stay away from recession. this was definitely huge and not expected by most economists.Wednesday's report shows that other rate cuts are looming. "The report reveals that if interest rates were held at 3.0%, inflation would likely fall close to 0% in 2010," said Richard Snook. He is the senior economist at the Center for Economics and Business Research.

I think that this article shows that there is definite recession in the future. Inflation rates have not been this low in a long time. I belive that the interest rates in many countries will someday hit zero. this will be the day that we have a chance to dig ourselves out of the hole because people will most likely take out loans and spend because of the 0% interest. that is if we don't ever get to the point of no return, and we just continue going downhill.