Whilst inflation falls and manufacturing increases in the UK, and the Euro have secured a bailout deal for Greece unleashing up to €1trn worth of funds, the US has been sliding. Oil prices today pushed inflation upwards, which will only set the US economy further in trouble.
The US economy is battling a high deficit which is holding back their options to dealing with low growth. With no room for Quantitative Easing as a method to boost growth in the economy, the US has been resigned to bond buybacks and other less effective methods. Unemployment in the US is far from steady, with the expectation to see unemployment rise in the first quarter. Trouble in the Middle East has meant that the price of oil has increased, which has caused inflation to increase another 0.2%. Consumers have little in their pockets and increasing prices will further reduce their spending power which will only slow growth even further and continue to accelerate unemployment.
We are drawing closer to March, where the end of the financial year may result in the Japanese government intervening in the strength of the Yen, as Japan has posted a somewhat disappointing yearly statement. Perhaps all focus could move across to Asia in the weeks to come.
Have a good weekend everyone. (JKM)
