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Well, the Bank of England kept interest rates on hold.

Probably a smart move. As I said yesterday, it’s hard to see what an interest rate cut can do other than add to inflationary pressures. A cut in the base rate won’t make consumer borrowing cheaper. The UK economy is built on consumer borrowing. Therefore, the economy is in trouble, and the Bank can’t ‘save’ it. But it can stop the situation getting worse by at least trying to fend off inflation.

Of course, the pundits still haven’t figured that out. A short piece in The Times described the Bank’s ‘hold’ decision as “a blow to homebuyers and businesses struggling with rising costs.”

But right beneath that there’s a much more important story. One that shows the last bastion of disinflation in the UK is set to vanish…
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The Australian dollar nudged lower against the US currency on Friday after comments from the central bank were seen to reduce the risk of a further interest rate rise in the coming months.

The Reserve Bank of Australia (RBA) in a quarterly policy statement said that demand in the economy was slowing down considerably and was likely to curb inflation, currently at 17-year highs. for more click here

Later today (at noon, to be precise) the Bank of England will announce its latest decision on interest rates.

So what’s it going to do? The question is a lot harder to answer this month than we’ve been used to for the last few years. Recent economic data on the UK has been nothing short of dreadful.

But, at the same time, inflation is above target and it’s likely that governor Mervyn King will have to get his biro out more than once this year as CPI overshoots the upper limit of 3%, forcing him to write a letter to the Treasury explaining why.

So it’s hard to say whether rates will stay put or fall. But more to the point, whatever the Bank does, will it make much difference to anything?
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Millions of current account customers face an increase of up to 20 per cent in monthly fees as banks seek to boost revenues before a ruling by the Office of Fair Trading (OFT) that could cap overdraft charges.

An estimated seven million consumers, already squeezed by soaring food, fuel and utility costs, will see the monthly charge for their current accounts jump as banks look for new ways of raising profits. for more click here

US consumer borrowing jumped more than double the amount economists forecast in March, indicating a slowing economy is forcing Americans to accumulate credit-card and other forms of debt.

Consumer credit increased by $US15.3 billion for the month to $US2.56 trillion, the biggest monthly rise since November, the Federal Reserve said today in Washington. In February, credit rose by $US6.5 billion, previously reported as an increase of $US5.2 billion. The Fed’s report doesn’t cover borrowing secured by real estate, such as home-equity loans. for more click here

Oil prices threaten to hit $200 a barrel in a final “super-spike” over coming months as producers fail to keep pace with blistering demand from China and the Middle East, according to a controversial report by Goldman Sachs.for more click here

Devastating price rises mean families have less to spend on themselves than at any time for 17 years.

The share of household income eaten up by unavoidable outgoings such as housing, food, heat and council tax has soared over the past six years. for more click here

With the oil price at near-record highs and Shell and BP declaring record profits last week, there are various truckloads of drivel about the oil majors being ruthless profiteers doing the rounds at the moment. But who’s really raking in the money?

Let’s start with a multiple-choice question.

With the oil price above $100 a barrel, who makes the most money out of a gallon of petrol at the pump? Is it:

A. Greedy oil companies.
B. Greedy Opec members.
C. Our glorious Government.

You don’t really need me to answer that do you?
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Sterling fell this morning in London on speculation the Bank of England is now on the verge of its first back-to-back interest rate cut in almost seven years after a blizzard of miserable economic data. for more click here

Crude oil rose to a record $US122.73 a barrel in New York on threats to supply in Nigeria and Iraq and growing Asian fuel consumption.

Royal Dutch Shell said a militant attack over the weekend damaged a pump station in Nigeria, where violence has cut exports from Africa’s biggest oil producer. Economic growth in China, the world’s second-biggest fuel consumer, will be 10.8% this quarter, State Information Center economists wrote in the official China Securities Journal today. for more click here