The governor of the Bank of England said yesterday that Britain’s recovery from recession is fragile and that the next few months are likely to be volatile.
Governor Mervyn King told a parliamentary committee that recovery appeared to have stalled in the euro area, Britain’s largest export market.
“The tensions that underlay the build up of large world imbalances have not been resolved,” King told the House of Commons Treasury Committee.
“And, at home, bank lending to the non-financial sector continues to fall,” he said.
While the bank’s rate-setting Monetary Policy Committee expects a gradual recovery, King said, risks remain on the downside.
King said the bank’s £200 billion (US$310 billion) economic stimulus program of asset purchases, combined with a record low base rate, would provide a boost for some time.
The effect of the purchases is to increase the supply of money in the economy, a measure taken to counter steep downturns.
He said that Britain’s economy also benefited from a fall in the value of the pound in 2007 and 2008.
That makes British exports more competitive on price.
“Judging how these various factors will play out is an extremely difficult challenge,” King said.
In Tokyo yesterday, Japanese Finance Minister Naoto Kan put further pressure on the Bank of Japan (BOJ), telling it to do its part to fight deflation.
“The government will do its part, so I want the BOJ to do what it should do,” Kan told reporters.
“I have no wish to tell it to take specific actions. I am saying we should work together since we hold the shared understanding that we are yet to overcome deflation,” he said.
Kan, who became finance minister last month, has been advocating for the government and the central bank to aim for a positive annual inflation rate of about 1 percent to pull the nation out of the economic doldrums.
In November, the government said Japan was in deflation, citing falling consumer prices, but economists believe deflation had plagued the country for years.
The BOJ has already slashed interest rates to just 0.1 percent and pumped trillions of yen into the financial system to boost the economy.
But politicians have criticized it for not doing enough to ward off the threat of another deflationary spiral as seen after the country’s economic bubble burst in the early 1990s.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day