A bluffer’s guide to the UK economy: Impress your friends with your financial knowledge

The levers that a chancellor can pull to influence economic conditions. Essentially a government needs to determine whether it spends more or less than it receives. Fiscal policy will have a knock-on impact on inflation, markets , economic growth and unemployment.The biggest companies in the UK listed on the stock market. The FTSE 250 is smaller UK companies.

If the coupon is considered attractive its price will go higher and the opposite can happen as we’ve seen lately. If the price goes down, the yield – the return goes up as you are getting more for your money. The gilt market is a live confidence vote in the strength of the economy. Pension companies have got caught out as the price of gilts has gone down, so anyone invested in a fund that holds lots of gilts will see their return reduced.The opposite to active investing. Also known as tracker funds, a computer will follow, say the FTSE 100, and you will get a better return if the FTSE 100 does well and vice-versa. Tracker funds come with lower fees as you don’t have to pay the manager, and on the whole they outperform active funds.

This problem of output limits the cash available for companies to expand, invest, hire or raise salaries. It is the thing that successive prime ministers have vowed, and failed, to fix and it’s what the Government has in its sights. Who knows if it will succeed?This is when the Bank of England buys government bonds, or corporate bonds from pension funds and companies.

It goes something like this: the Bank buys £1m of government bonds from a pension fund. In place of those bonds, the pension fund now has £1m in cash. Rather than hold on to that cash, it will normally invest it in other financial assets, such as shares, that give it a higher return. In turn, that tends to push up on the value of shares, making households and businesses holding those shares wealthier. That makes them likely to spend more, boosting economic activity.

Source: News Formal (newsformal.com)

United Kingdom Latest News, United Kingdom Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Chop chop: time for Britain's PM to accept the inevitableWith each day of dawdling, the Conservatives’ reputation for financial management is damaged – and the UK dances with financial hazard
Source: i newspaper - 🏆 8. / 89 Read more »

Kwasi Kwarteng's 38 days as chancellorLiz Truss has sacked her friend and neighbour Kwasi Kwarteng as chancellor after their mini-budget caused turmoil in financial markets. Still on payroll of Crispin Oden and I am sure he will be fine after screwing the country . .£££££££ Kwarteng thinks Truss is done for and she’ll be gone in weeks. r4today GeneralElectionNow
Source: SkyNews - 🏆 35. / 67 Read more »

Will the UK financial chaos spark a wider meltdown?Risks to global financial stability are verging on crisis levels, the IMF has warned. Taking an L on the £ Well yes. If people can’t pay their mortgages, they’ll default…the housing market will crash. People will have no spare money so the economy slows. Anything non essential like pubs or restaurants will die How's the £ doing ?
Source: BBCNews - 🏆 3. / 97 Read more »

How the UK's current financial crisis compares to previous economic crashesUnlike Governments that endured previous market crashes, Liz Truss stands accused of causing a self-inflicted crisis Here's how the UK's current financial crisis compares to previous economic crashes ⤵️ 🔴 DavidParsley50
Source: i newspaper - 🏆 8. / 89 Read more »

Take our Manchester TV quizTest your knowledge of Manchester-based TV shows and Mancunian actors 7/8
Source: MENnewsdesk - 🏆 23. / 69 Read more »