An interesting video on money and how it has a negative effect on us and the planet.

Two bankers from RBS have resigned after RBS have been forced to decrease the amount given in bonuses. Steve Ashley, head of RBS’s trading division and Chris Fleming, sales, quit the bank on Friday.

This is going to hit RBS hard as their trading business is one of their top earning businesses. Mr Kingman, the outgoing chief executive of UKFI, said “We cannot afford to be in a position where the banks lose so many people that we start to lose serious value.”

Although Gordon Brown stated that he will help the banks with ‘every last penny of taxpayer support .’ he also said. “I’m sure you share my anger with some of the banks, it is only fair that those who have contributed to the recession and have now benefited from taxpayers’ support give something to society in return.”

I believe a lot of the public are more inclined to the second statement. As the Times reported in December 2009 ‘MORE than 1,000 investment bankers have quit Royal Bank of Scotland to join rival firms for guaranteed cash bonuses and big salary increases, according to banking sources. ‘

This looks like a trend and as more top execs look for other opportunities and higher bonuses RBS is going to suffer. Also with more budget tightening on its way, which bank will be the next to see their top execs leave?

Source Telegraph & TimesOnline

The governor of the Bank of England, Mervyn King, has predicted that inflation will rise above 3% in the next few weeks. Although this is a major worry he has also predicted that this will be short lived. This increase in inflation is due to higher VAT and the rises in petrol prices.

If his predictions are true and inflation does rise above 3% he will be expected to write a letter explaining this to the chancellor. “The UK economy has continued to bump along the bottom,” Mr King said.

He also stated that the UK will not see economic growth like they had before the economic crisis for “a considerable period”. Even with £200bn pumped into the economy by buying assets with newly created money the economy is still suffering. This raises questions on the effectiveness of quantitative easing (QE). Mr King has said that this QE has ‘helped economic recovery’ but how long will the UK have to wait to see the benefits of this?

D.Brown, chief European economist at Bear Stearns International said “The message the bank would like to get across to the market is that there is only room for moderate easing ahead, but the fundamentals say otherwise.”

This indicates that the UK has a bit more falling to do before the economy will rise again the question on most peoples minds is how far will the UK fall before it gets back up?

Source BBC & New York Times