Category: News

Jan 25

Bank of England raises interest rate to 0.5%

The Bank of England has announced a rise in the UK’s benchmark interest rate from 0.25% to 0.5%, the first increase in a decade.

The monetary policy committee decided by seven votes in favor and two against applying this increase, which reverses the 0.25% drop applied in August 2016 to resist the effects of the vote favorable to Brexit (British exit of the European Union, EU) in the referendum on June 23 of that year.

The Bank of England has estimated that the British economy, which has annualized growth of 1.5%, is sufficiently consolidated to resist this increase, aimed at containing the advance of inflation, which stood at 3% in September.

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This is the first increase in interest rates in this country since July 2007, before the global credit crunch exploded, which plunged the UK into a recession.

To address this crisis, the bank lowered interest rates to 0.5% in March 2009, at which level they remained until the reduction to a new all-time low in August 2016.

The Bank of England has also decided to keep its quantitative expansion program intact – to stimulate the economy – in which it has invested a total of £ 445 billion to buy mostly public-private bonds.

In its report released today, the institution predicts that the British economy “will grow modestly in the next few years,” while consumption, an economic engine, “will remain fragile in the short term” until eventually, it will rise to wages.

The bank acknowledged that although the effects of Brexit were lower than expected, they “affected business investment” despite benefiting exports.

“Inflation is expected to fall next year, eventually reaching the 2% target,” the institution said, noting that any future interest rate increases will be “moderate and gradual.”

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With unemployment at 4.3 percent – its lowest in 12 years – the UK economy held up better than expected to the effects of Brexit’s trading with Brussels and rose 0.4 percent in the third quarter, up from 0, 3% of the previous two quarters.

This generates an annualized growth of 1.5%, slightly below 2% estimated by the Government last March.

Nonetheless, low wages and rising household debt, which plagued domestic demand, have led many analysts to believe that today’s increase in interest rates will be timely rather than the beginning of a series of increases.

Jan 25

Wealth in Latin America increases 3.9% in one year

Private wealth in Latin America rose 3.9 percent to $ 8.1 trillion between mid-2016 and 2017, according to a study by financial entity Credit Suisse released on Tuesday.

Globally, the study found that global wealth in private hands increased between mid-2016 and mid-2017 by 6.4 percent or $ 16.7 trillion, which represents the fastest pace of growth since 2012 and a global wealth of $ 280 trillion.

According to the work of the Swiss bank, the wealth per adult in Latin America is currently at the US $ 19.04 thousand, which represents an increase of 2.1%.

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By comparison, the global average is $ 56,500, representing an increase of 4.9% and a new record.

However, the gap between those who have the most and those who have the least globally is considerable, given that in the ranking of wealth distribution it can be seen that 3.5 billion people, equivalent to 70% of all adults in the have less than $ 10,000.

The study highlights that in Latin America there are currently 460 thousand people with more than the US $ 1 million, and projects that by 2022 will be 54% more, or 706 thousand.

Globally, there are 36 million millionaires today, after adding 2.3 million new ones in a year.

By countries in the region, Brazil has 164 thousand millionaires and is expected to increase by 81% by 2022, to 296 thousand.

In Mexico, there were 84 thousand millionaires in the middle of 2017, the number that should increase to 88 thousand within five years.

The Argentinians, meanwhile, have 30 thousand million of them, a figure that will increase by 127 percent by 2022, when there will be 68 thousand, according to the report.

North America and Europe account for 64% of the wealth of households, followed by the Asia-Pacific region (excluding China and India), China, Latin America, India and Africa.

The report analyzes in more detail the economies of Brazil and Chile and states in the case of the South American giant that the country has suffered a crisis that has diminished wealth per adult 35% since 2011.

Brazil is among the many countries in which the majority of citizens have a wealth of between US $ 10,000 and the US $ 100,000, but the inequality is relatively high.

Only 1% of the richest have 44% of the household’s wealth in the country.

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Wealth in Brazil amounts to the US $ 2.5 trillion and fortune per adult is currently the US $ 17,400.

In the case of Chile, one of the strongest economies in Latin America, the country has a wealth of US $ 700 billion and 57 thousand people with a fortune of more than US $ 1 million.

According to the Credit Suisse report, 79,000 adults are among the richest 1% in the world.

The wealth per adult in that country is $ 52,800, only “a little” below the world average and “relatively high” compared to most emerging market economies, “the study says.

Chile also has a smaller proportion of adults with a wealth of less than the US $ 10,000 than the world average (37% versus 70%) and also a percentage of adults slightly over the US $ 100,000 compared (8% compared to 9%).

Jan 25

US economy grew at a 3.2% pace in the third quarter of 2017

The US economy grew at an annual rate of 3.2 percent in the third quarter of 2017, slightly below the previous estimate of 3.3 percent, the US government said on Thursday.

The US Department of Commerce today released the latest of its three calculations on the evolution of the Gross Domestic Product (GDP) between July and September.

Despite the slight downward revision, the growth rate of 3.2% is the highest recorded since the beginning of 2015.

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The number is slightly lower than analysts’ estimates, which had anticipated a 3.3% expansion.

The data was driven by a smaller increase in consumer spending, which accounts for two-thirds of economic activity, and grew 2.2%, compared to 2.3% previously anticipated.

Sustained economic improvement in the US has led the Federal Reserve to raise interest rates three times this year, the last one a week ago, to leave them at between 1.25% and 1.5% %.

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President Donald Trump reached the White House in January this year with a promise to achieve annual growth of more than 3 percent underpinned by an ambitious plan that would represent the country’s biggest tax reform over decades and cut corporate and many Americans.

After overcoming a number of obstacles, the plan was approved by both Houses of Congress on Wednesday and promises, according to Republicans, to accelerate economic growth to about 4% per year.

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