Summary
Credit Crunch Watch Financial stress indicator * The financial stress indicator is a composite index of a number of indicators including risk spreads, mortgage spreads, equity volatility, commercial paper and commercial loans outstanding and the spread of LIBOR rates over T-bill rates (the "Ted" spread).\n7% (from 0.9% reported initially). Producer price inflation at 5-month high Input prices fell 0.5% in September thanks to price falls in crude oil and fuel costs, although annual input price inflation increased from -7.7% to -6.5% - the least negative rate since April.
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Extract
Lengthy Period of Austerity in Prospect
Party conference season has confirmed that next spring's election will represent a break from the norm of preelection giveaways and promises of tax cuts. The major parties are now campaigning on a platform of who represents the best party to implement the unavoidable tightening of fiscal policy and this is set to be one of the key battlegrounds of the election campaign.
There is no doubt that the public finances are in a dire state, Much of this is due to the application of the automatic stabilisers as the economy moved into recession, but the peak in borrowing would have been mu...See the full content of this document
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