What is the point of Woolworths?

The BBC asks what is the point of Woolworths?

A year away from its centenary, Woolworths is reportedly on sale for the price of a modest bag of pick ‘n’ mix. But it’s still much loved and millions of shoppers go through its doors every week. To buy what?

Photo source.

The paradox of thrift

BBC has a nice article on the paradox of thrift.

Thrift may be a virtue for the individual, but could damage the economy as a whole, according to the economist John Maynard Keynes, writing in the midst of the Great Depression in the 1930s.

He called it the paradox of thrift. The more people saved, the more they reduced effective demand, thus further slowing the economy.

This was one reason, he pointed out, that a recession can become self-reinforcing.

Key question is will the UK population realise that saving could be bad at this time and we should be spending. Of course there is what is good for the population and what is good for the individual.

Darling unveils borrowing gamble

BBC reports on Alistair Darling’s “gamble”.

Chancellor Alistair Darling has cut VAT but taken borrowing to record levels in moves he says are needed to save the UK from a deep and long-lasting recession.

What the Chancellor is trying to do is to to maintain consumer spending to avoid the economy falling into recession.

Bank of England hints at further rate cuts

BBC reports on the Bank of England’s deliberations about cutting interest rates.

Expectations of another rate cut have risen after the release of minutes from the Bank of England meeting at which rates were lowered from 4.5% to 3%.

The article continues.

“It’s confirming that we’re going to see more rate cuts from the Bank of England, and more aggressive rate cuts,” said Audrey Childe-Freeman from Brown Brothers Harriman.

The Bank of England is cutting interest rates to both ensure to stop inflation falling too far below its target next year and to encourage consumer spending.

Leaders welcome G20 action plan

BBC reports on the G20 summit where the key decisions made include:

Key issues agreed by world leaders at this summit included:

• reform of international financial institutions such as the World Bank and the International Monetary Fund
• an agreement by the end of 2008, leading to a successful global free-trade deal
• improvements to financial market transparency and ensuring complete and accurate disclosure by firms of their financial conditions
• making sure banks and financial institutions’ incentives “prevent excessive risk taking”
• asking finance ministers to draw-up a list of financial institutions whose collapse would endanger the global economic system

Representing 85% of the world economy the G20 probably didn’t need to meet for some of these, but getting together probably makes them (and hopefully the monetary institutions) feel better.

Economic recovery is not just about money and spending, but also about confidence and how people feel about the economy,

EU slices up ‘ugly fruit’ rules

BBC reports on the scrapping by the EU of certain “rules” relating to fruit.

The European Commission has scrapped controversial rules that prevent oddly-sized or misshapen fruit and vegetables being sold in Europe.

The EU’s agriculture commissioner called it “a new dawn for the curvy cucumber and the knobbly carrot”.
Marketing standards for 26 types of produce were scrapped, in a drive to cut bureaucracy.

The rules were introduced to ensure common EU standards, but are regarded by critics as examples of Euro-madness.

These rules were part of the significance of international trade and the European dimension for UK businesses. The cutting of the rules should make it easier to sell fruit.

Key question though, is will consumers suffer as a result?

Nationwide warns on house prices

BBC reports on the Nationwide report on falling house prices.

Britain’s biggest building society, the Nationwide, has slashed mortgage lending and says it expects house prices to continue to fall in 2009/10.

Falling house prices can have a large impact on how “rich” people feel and as a result then impacts on consumer spending.