Complete Finance Blog

Chinese inflation is decelerating [0]. This suggests that whatever further real CNY appreciation occurs is likely arise from nominal appreciation, over the near term.

The news, not completely unexpected, is that inflation is falling rapidly.

This can be taken two ways: first, the economy is cooling rapidly; second, the fiscal and monetary authorities have more scope for stimulative action should growth further slow.

What are the implications for the Chinese currency’s real value? Despite the shrinkage in the Chinese trade balance, continued global rebalancing requires continuous CNY appreciation. (According to Chinese statistics, the 2011 trade surplus of USD155 billion was 14.5% smaller than the 2010 balance).

The Chinese indices are available only up to November; the BIS real index is almost back to the crisis peak, when the CNY followed the USD in its rise.

What is interesting is how much the nominal and real have diverged at the end of 2010 (as pointed out in this post), and over most of 2011. U

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NS&I has thrown savers a lifeline by announcing the re-introduction of its popular index-linked savings certificates.

The world of savings has been a dark and gloomy place of late. Rising inflation and paltry interest rates have made many wonder if they should even bother taking out an account at all!

And as I reported last week, even if a savings account looks to be offering a good rate, there’s a fair chance that its attractive facade will only be a 12 month bonus. And once that drops away, your interest rate will plummet.

In fact, the situation has been so dire that some of the best interest rates available to savers have actually been on current accounts! Take a look at this table if you don’t believe me…

Madness!

But hidden deep within last week’s Budget was a glimmer of hope for those tormented souls currently inhabiting the dark, baron wasteland that is savers-ville.

Intrigued? You should be…

NS&I to the rescue!

Yes, the index-linked savings certificates from NS&I are set to make a return!

For those not in the know, NS&I savings certificates typically pay 1% over the rate of inflation, as measured by the Retail Price Index (RPI). And w

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