Thursday, February 01, 2007
Manufacturing outlook 'ominous'
Almost 8,000 UK manufacturing jobs have been lost in the first month of 2007, figures from the British Chamber of Commerce (BCC) have shown. The data showed the "fragile state" of the sector and made the outlook for the rest of the year "ominous", the organisation said.
More than 2,000 of the cuts came at the Peugeot plant in Ryton near Coventry.
The BCC said it feared another hike in interest rates - currently at 5.25% - would cause more difficulties.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6317959.stm
Any further rise in interest rates by the Bank of England (a contractionary monetary policy designed to reduce inflation) would further depress investment and hence further reduce aggregate demand. The fall in aggregate demand would have obvious knock-on effects in terms of job losses and a worsening of unemployment (highlighting the so-called Phillips curve trade-off between inflation and unemployment).
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Monetray policy is discussed in chapters 5 and 11 (at principles and intermediate level, respectively) and the Phillips curve trade-off is explained in chapters 7 and 16 (at principles and intermediate level, respectively). Find out how to get LiveEcon at www.liveecon.com. Download this blog as a Blogcast via the website.
Almost 8,000 UK manufacturing jobs have been lost in the first month of 2007, figures from the British Chamber of Commerce (BCC) have shown. The data showed the "fragile state" of the sector and made the outlook for the rest of the year "ominous", the organisation said.
More than 2,000 of the cuts came at the Peugeot plant in Ryton near Coventry.
The BCC said it feared another hike in interest rates - currently at 5.25% - would cause more difficulties.
Read the full story at: http://news.bbc.co.uk/1/hi/business/6317959.stm
Any further rise in interest rates by the Bank of England (a contractionary monetary policy designed to reduce inflation) would further depress investment and hence further reduce aggregate demand. The fall in aggregate demand would have obvious knock-on effects in terms of job losses and a worsening of unemployment (highlighting the so-called Phillips curve trade-off between inflation and unemployment).
The much acclaimed new interactive learning package LiveEcon can help you understand the economics behind these important policy events. Monetray policy is discussed in chapters 5 and 11 (at principles and intermediate level, respectively) and the Phillips curve trade-off is explained in chapters 7 and 16 (at principles and intermediate level, respectively). Find out how to get LiveEcon at www.liveecon.com. Download this blog as a Blogcast via the website.
# posted by Sam @ 10:20 
