UK Inflation Rises 2.3%, Shocks Economist

British inflation breached the Bank of England’s 2% target last month. The 2.3% rise in consumer prices represents the biggest increase since three and a half years ago suretrader demo account. January’s inflation was at 1.8%.

This month’s data also marks the start of the usage of CPIH. CPIH includes owner-occupier housing costs (costs associated with living, maintaining and ownership of house) to measure inflation.

Ruth Gregory, an economist at Capital Economics, said, “If the economy continues to hold up well as we expect, interest rates could be rising rather sooner than the markets have been anticipating.

However, most economists expect the Bank of England to keep rates at the current all-time low of 0.25% until the Brexit uncertainties clear up. The Bank of England has also noted that it will allow an overshoot in inflation to prevent loss of jobs.

Current inflation is now at the same rate as in wage growth. This increase in consumer prices is raising pressure on household expenditure suretrader demo.

Chris Williamson, an economist at Markit, said, “It remains likely that policymakers will adopt an increasingly dovish tone in coming months, despite the rise in inflation as the economy slows due to consumers being squeezed by low pay and rising prices.”

Last week, the interest rate setting committee of Bank of England had a meeting. One voted for an increase in the interest rates to prevent inflation from rising to a threatening level.
The Bank of England expects inflation to peak at 2.8% in the 2nd quarter of 2018, but economists predict it will hit 3%. Transport costs spiked up because of rising fuel costs and were the primary driver of inflation for this month suretrader reviews. If oil and food prices were excluded, the core price inflation would have risen to 2.0%.

Ben Bratell who is a senior economist at Hargreaves Lansdown concluded that the transport costs increased because of the depreciation of the British pound against the U.S. dollar. Imported inflation for food is also becoming a real threat as a result of the British pound depreciation since its decision to exit the European Union.
Fortunately, the supermarket industry has a price war which is limiting the full potential of food price increases.

Dan Hanson, a Bloomberg Intelligence economist, said, “Above-target inflation is likely to be a theme of U.K. economic performance for the foreseeable future.”
The sharp rise in consumer prices gave fuel for the British pound to appreciate 0.8% against the dollar.

Economists have noted that manufacturers are inclined to increase their prices as numbers in February showed producer input prices rising 19.1% on a year-on-year basis.

A spokesperson for the British Treasury said, “The government appreciates that families are concerned about the cost of living, and that is why we are cutting tax for millions of working people, increasing the National Living Wage to 7.50 pounds per hour from next month and freezing fuel duty.”

March 29 is an important day for Britain as it will formally trigger two years of discussions on the Brexit decision.


AARP Against Republicans To Repeal Obamacare

Ever since Obamacare was suggested, the Republicans were against it. It considerably increased the cost of medical care for the government, but it benefited more people in new ways. Especially, the older generation with different diseases that were not covered by their old insurance benefited greatly from Obamacare. One of the common reasons for severe criticism of Obamacare is that the younger generation had to pay a higher price to allow extended coverage for the older generation. Trump’s White House wants to repeal and replace Obamacare to make the insurance more affordable for the government. This could mean that several beneficiaries of Obamacare will lose their access to health services and American Association for Retired People (AARP) is unhappy about it.

AARP has 38 million members from the retired community and it has sent letters criticizing the proposals of the Republicans. To replace Affordable Care Act (ACA), popularly called as Obamacare, the Republicans propose age bands and converting Medicaid into block grant. The Republicans hope to drive down the cost with these two major changes, but in reality, the effect would be different. AARP is also calling out lawmakers for a hearing.

The Republicans may not be stopped by AARP’s moves, but it simply shows that the road ahead to repeal Obamacare would be difficult than it imagined. A major portion of the older population has voted for Donald Trump and suddenly, they are afraid that they will lose their medical benefits. Even those who didn’t like Obamacare are aghast that repealing the entire law means that they won’t be able to enjoy the part of the law they liked.

Before ACA, the older generation paid a greater insurance premium compared to the younger ones. Those with predisposed medical conditions have to deal with out-of-pocket expenses because the insurance didn’t provide adequate coverage. Obamacare ensured that the insurance companies don’t charge older people three times of what they charge the younger people. Even though young people paid a higher premium due to this change, it provided additional coverage for old people. Republicans argue that age band will reduce the burden on young people, but in reality, the benefits are far less.

AARP warns that the age band would cause older people to pay more for insurance when they have to deal with increased medical problems. The new proposal will not expand access to affordable and quality healthcare. Instead, it would limit the access in new ways. Republicans want to give more control to the states by converting Medicaid to block grant program. This is to reduce the funding for the program as Republicans want to add savings to federal Treasury.

The states don’t have finances to distribute as many benefits. When the states make cuts, Medicaid will become a burden for the older people as Medicaid is widely used for nursing home care. It is alleged that some of the Republicans are worried about repealing Obamacare and they wanted to discuss in private meetings. Executing Obamacare repeal through legislation will take a lot of time and political capital which will make it difficult for the Republicans to keep up with other promises.


Rick Perry Regrets His Talks Made Five Years Ago

Rick Perry is the former governor of Texas and he is currently the nominee for Energy Department by Donald Trump. During the confirmation hearing held on Thursday, he was answering questions from the reporters regarding climate change and his earlier talks about the importance of energy department. Previously, in 2012, Rick Perry spoke strongly in favor of abolishing the energy department. Ironically, he is now the nominee for the energy department under the new Trump administration.

When Perry was questioned on this topic, he admitted that the comment was made five years ago and it doesn’t reflect on what his current thoughts are. He went on to say that he regrets his recommendation of eliminating the energy department, especially after a number of briefings on the importance of a dedicated energy department. Talking about climate change, Perry said that some of it are caused by various man made activities. He wants to take active measures against it without limiting the economic growth.

Perry continuously combined climate change and economic growth to represent his new outlook. Democrats were in the mood to ask several questions to truly understand the stance of the nominee. Donald Trump during his campaign has mentioned that he will cut down the cost of running the energy department. This could mean that there could be budget cuts for the energy department. When questioned about it, Rick Perry said that the administration could forget this view and continue to support the energy department.

During 2016, Rick Perry went on record to say that nobody really knows whether the climate change is real. He said this comment just a day after 2016 was declared hottest year by the US scientists. In 2014, he bashed the scientists saying that the scientists call carbon dioxide as a pollutant and it is a disservice to the entire nation. Sen. Bernie Sanders asked repeatedly whether Perry considers climate change as a crisis. To avoid the controversies, Perry declined to answer the question directly and said that he wants to talk beyond rhetoric claims.

The democrats were not happy with the connection made between climate change and economic growth. When Sen. Maria Cantwell said that the higher temperatures and fires caused by timber industries threaten aquatic life, Rick Perry quoted how the Texas economy grew while the emissions continued to fall. It was rumored that Donald Trump’s transition team wanted to know the details of the individuals who are involved in research on climate change. Perry did his best to deflect the controversies surrounding the fears.

Rick Perry said that he doesn’t want that information because he can successfully work with people who are interested in facing the challenges. Experts are pinning their hopes on Perry who successfully used the expansion of oil and gas exploration industry to bring about an increased use of wind energy. During his tenure as the governor of Texas, the state created a competitive energy market while embracing wind energy technology. However, environment enthusiasts are unhappy with the nomination as the head of the Energy department may cut down activities on climate change research and regulation.


Payday Loan Companies Target Homeless

The United Kingdom has been fierce in reining in the payday loan industry. Whether it is making borrowers’ rights more prevalent or installing new regulations for lenders, the overall payday loan industry in Great Britain has been scrutinized and their reach has diminished in the last two years.

But it seems that payday lenders have a new target in their line of vision: homeless youth.

According to a new report from a non-profit organization, payday loan companies are trying to get homeless teenagers to take out online loans, and then they hound the borrowers for repayment.

The youth homelessness charity Centrepoint warns that unscrupulous payday loans are looking to nab homeless youth as their newest clients. The problem with this, the charity adds, is the fact that some of the lender’s ar targeting those with learning disabilities, and this is generating much publicity.

Over the weekend, The Independent published a report about how one homeless 19-year-old, who had the mind of a 10-year-old and resided in a hostel, was receiving text messages from a payday loan firm. Reportedly, they had demanded that he pay them $250 after lending the teenager about $62.

Centrepoint staff are looking to stop the trend before it becomes out of hand. Freda Dyson, manager of the Centrepoint location in Bradford, said that the staff are confronting the lenders and point to them the numerous trading standards and lending practices that these payday loan businesses must abide by.

“A young person might get one of these loans. Then their friends would find out and ask them to get a loan on their behalf, promising to pay them back when they got their next benefit payment. So someone might get a loan for a friend. Moreover, another friend, and another…” she said.

“They could end up with five debts allocated to them. Some companies were throwing money at people. It’s a money making scheme for them, isn’t it? It’s just greed, capitalizing on the misery of others.”

Many of the homeless kids may think that it’s just $100, but it could morph into something a lot bigger.

Whether or not this will succeed remains to be seen, but many are upset by the latest developments. The Financial Conduct Authority (FCA) has been cracking down on the payday advance loan industry since 2013 and has tightened up the lending regulations. With this story capturing headlines, the FCA may be demanded to step in and do much more to protect the most vulnerable in British society.

Today, the average payday loan customer is between the ages of 25 and 39 and earns about $30,000 a year. It is estimated that 90 percent of the cases include debt that is paid off without extra fees or charges that have been added to the pile by the payday lender. However, Dyson is irked that these lenders are still looking to appeal to the homeless youth who do not have money, jobs or a home.

Because of this latest trend, Dyson is calling for a national helpline that veers homeless youth away from payday loans. The call has just been started, but if it gains enough traction then it could be installed.

“The young people should not have taken the loans out in the first place, but if you have basically got nothing and you can access a loan straightaway, in the next two hours, what are you going to do? You are going to think, ‘This will sort out my problems, and I will be able to deal with it’. However, unfortunately it does not work like that,” she stated.

With the FCA’s latest rules in place, the number of approved payday loan applications have dropped by 70 percent.


New Administration Suspends FHA Mortgage Insurance Rate Cuts

The Donald Trump administration has taken its first controversial move to suspend the mortgage insurance rate cuts for all the FHA backed loans. This move was made just after an hour of Donald Trump assuming his presidency. This is declared by the Housing and Urban Development (HUD) department. This policy was originally announced by Obama during his last days as a president. The mortgage insurance rate cuts were introduced to benefit borrowers who can save hundreds of dollar per year owing to the lower insurance premiums.

When the policy was first introduced, the Republicans were worried that it would add burden to the existing taxpayers. When the loans remain unpaid, the Federal Housing Administration has to jump in to cover the incurred losses. In 2013, the agency urged the US Treasury to offer $1.7 billion bailout successfully. This happened right after the subprime mortgage market collapsed.

The FHA backed loans are different from the typical mortgage loans. The FHA actually doesn’t distribute loans. It insures the mortgages and takes responsibility to reimburse the lenders should the borrower default. This new policy is a great help for borrowers as they had to pay a small down payment even with a low credit score. The FHA backed loans allowed the borrowers to put down 3.5% as down payment and they could qualify with a credit score of even 580. This means that those on the verge of bankruptcy or debts in collection stage can afford to become a home owner. However, the average credit score for FHA borrowers in the 3rd quarter of 2016 was 679.

In recent years, the popularity of FHA-backed loans continued to increase. Many lenders were interested in offering home mortgage loans as they are secured by FHA. More than banks, private lenders popularized the FHA market. Non-bank lenders don’t have strict requirements on awarding a loan and this created a nervousness in the industry.

The nominee for HUD, Ben Carson spoke at his confirmation hearing last week that the private mortgage insurance industry should have a bigger role in supporting borrowers who can’t afford a 20% down payment. He said that the entity providing insurance is not a concern, but the administration should have a backstop. He admitted that the FHA rate cut surprised him and he would reexamine the policy if he is appointed as the head of HUD. The suspension of the rate cut will be in effect from January 27th even before Ben Carson could appear for the confirmation vote.

The rate cuts suspension mean that the borrowers have to deal with a rate of 0.85% instead of 0.60%. HUD argued that FHA is committed to continuing to provide mortgage insurance for a long term, making it viable for the taxpayers. The Obama administration argued in favor of the rate cuts stating that the finances of FHA have improved greatly after the bailout in 2013. The suspension of FHA rate cuts is a disappointment for new home buyers who have to deal with the increased mortgage interest rates after the November election.


President Donald Trump Top Issues That His Administration Will Tackle

Donald Trump officially became the 45th president of the United States after his inauguration. After the inaugural as the next president, Trump updated his twitter handle @POTUS and the official website. In the online portal, Trump has outlined a number of issues that would be addressed with utmost importance. He lists these issues as top priorities for the nation at the moment.

The most prominent issue for America is energy. The new administration focuses on creating energy policies that reduce the cost for the Americans and utilize the resources effectively. Promising measures will be taken to reduce the dependence on foreign oil for energy production. A deregulation is in order where the harmful and unnecessary policies would be eliminated. It concerns the environmentalists as the climate action plan and water of the US rule are considered unnecessary policies now.

Trump is determined to take advantage of the Shale oil exploration and gas revolution to bring prosperity to the country. He also hopes to bring new jobs as a result of the new effort. Trump said that he wants to use the $50 trillion untrapped Shale oil along with natural gas reserves that are present in the federal lands owned by America. The revenues from this industry would be used to improve the infrastructure. The energy plan also includes measures to improve domestic energy production. This will help the country to depend less on the OPEC cartel. Trump also indicated on the website that he will allocate time to protect the environment as well. He outlined that the new administration will shift the focus of EPA to protect air and water.

The next priority for the administration will be focusing on Islamic terror groups and ISIS. Defeating and destroying these groups will be the major focus of the new plan. The new administration is planning on creating aggressive coalition and joint military operations when the situation demands. Trump also said that his office will work with various international partners to reduce and cut off the funding for various terrorist groups. The defense administration will also engage in cyber warfare to disable and disrupt recruiting of new members to these terrorist groups. The military and trade deals will also be modified and rebuilt to benefit the country.

Trump also focuses on bringing back jobs to the USA. He recalled the hard times the entire nation faced during the 2008 recession. The administration will first create pro-growth tax reform that would support American businesses and workers. He has promised to slash tax rates in all tax brackets while simplifying the tax code. As promised during the campaign, his administration will focus on reducing US corporate tax rate. Trump forecasts that his new measures will create 25 million new jobs in the country.

Rebuilding the military is also a part of defense plan and Trump promises to provide veteran care. State of the art defense system will be introduced while ensuring the best education, medical care and support for the military officials and their families. The law and order administration will also focus on reducing violent crimes in the nation.