Juggling too many balls? Which ones are working, which ones to drop, which ones you wish you could lose, which ones don’t fit in anymore,  or which ones you can just keep on juggling to appease an audience? The economy is a constant juggling of balls, tweaks here and changes there to perfect the performance. With more scrutiny and continued speculation of a potential bank base rate rise in the UK, this important ball in the juggling show, combined with inflation hitting 0% in August* makes for an interesting time in making the right decisions on how to keep the show going. The show must go on after all.

Blog 4 Picture 'Juggling Money'

Of course we can’t account for the curve balls thrown in along the way. For instance China, the world’s second largest economy and one of the biggest consumers of commodities**, being in the spotlight in recent weeks. This follows the reported drop in their meteoric growth whose impact has led to the fallout, and brutal collapse, in commodity prices that has then had a knock on effect amongst the world’s stock markets. Good news for those filling up their car cheaply but bad news for those reaching for their pension pot and for the leading Government’s attempts at stabilising the global economy.

Thankfully, Chinese authorities looked to new measures to aid growth which soothed the understandable panic and ensured the ‘curveball’ went away for now.  Although the weakness in the Eurozone, alongside the impending US Fed decision on interest rates, are constantly jostling to take centre stage too.

In the UK, evidently with the new rate of inflation at 0%*, there is clearly a need to build inflation back into the economy but how can this be done other than just by simply printing more money? Without inflation then how can interest rates be raised? With commodity prices nose diving and the pound remaining strong, one could argue that this brings a base rate rise even more into question despite  The British Chamber of Commerce upping its estimation for the UK’s GDP forecast this year *** and ‘with consumer confidence at its highest level in over decade’ according to Mr Mark Carney****.  The central bank is keen to see a rise in inflation but they are clearly not succeeding in reaching the magic 2% target just yet*.

No matter what; ‘The Economy Show’ will keep rolling on and the balls will continue to be juggled, just in what direction no-one can confidently say.

* ‘Inflation drops to 0.0% in August’, Financial Reporter, Rozi Jones, 15th September 2015, http://www.financialreporter.co.uk/finance-news/inflation-dr0ps-to-00-in-august.html
** ’Slowdown devastates commodity giants’, Sunday Times, Danny Fortson, 30th August 2015, http://www.thesundaytimes.co.uk/sto/business/article1599645.ece
*** ‘Booming consumer spending and services to drive UK economy as business group ups GDP forecast’, Thisismoney.co.uk, Camilla Canocchi, 10th September 2015, http://www.thisismoney.co.uk/money/news/article-3228052/Bus.html
 **** ‘Defiant Carney Shrugs off China Crisis’, The Sunday Times, Ben Laurance, Aimee Donnellan and John Collingridge, 30th August 2015, http://www.thesundaytimes.co.uk/sto/business/Economy/article1600087.ece