British news from April 22, 2010

As you�d expect, the main news in the UK this week was the cloud of volcanic ash that loomed over much of northern Europe. Thursday saw a second eruption in a month of the Eyjafjallajokull volcano (can you pronounce �Eyjafjallajokull�?).  The last eruption of this volcano lasted two years, from 1821 to 1823.

With about a million passengers unable to enter or leave the UK, Britain saw the worse air chaos since WW2. Prime Minister Gordon Brown sent three Royal Navy warships on the biggest civilian rescue operation in recent history. 250 people in Spain classified as vulnerable were due to be picked up by HMS Albion to travel home along with 200 soldiers returning home from Afghanistan. Scores more people turned up when word spread, but were first told, �There�s no room on the ship. It�s crammed full.�

However, Commander Geoff Wintle said in the �Spirit of Dunkirk�, �We�re going to get everyone on. Nobody is being left behind.� He went on to say, �It�s a warship, so they won�t be used to the austere conditions, but they will get fresh rations, fish and chips for dinner tonight and curry tomorrow. We will provide as many camp beds and sleeping bags as we can, but it�s no five star hotel.�

Back in Britain, pressure was building for the ban on flights to be lifted as the �200 million a day loss was becoming a point of contention, especially when German air testers had said that it was safe to fly. Wednesday saw most flights resume but still with many Brits stuck abroad.  � I really hope that money hasn�t caused law makers and struggling airlines to make any rash decisions. It would be terrifying to think that there was the slightest chance of the volcanic dust causing component failures in an aeroplane I was on. Of course it is not ridiculous to think that it could stop an engine, it did so in 1982 when Captain Eric Moody managed to safely land a Boeing 747 after all 4 engines failed.
And on to finance: Interest rates were another cause for concern in the UK last week as they rose to 3.4% which is well above the 3.1% forecast in the city. Petrol prices are �fuelling� the surge, vegetables that froze at the beginning of the year are affecting food prices and the weak pound has been pushing up the costs of imports. The big question is, how long can the Bank of England hold off an interest hike? It�s at 0.5% at the moment and with an economy as fragile as it is, any increase in interest rates could be met with carnage. The real return at the moment after basic tax and inflation on an average savings account is minus 2.8% so savers would welcome an increase.  James Hughes, of Black Swan Capital Wealth Management said, �This sharp increase in UK inflation is possibly just the start of an inevitable and unstoppable slide towards double digit inflation and interest�s rates within the next few years.� � The lesson is, if you have a low mortgage at the moment because interest rates are low and you have any spare cash each week, save it because hard times could be ahead.

In politics, a �hung� parliament has been the buzz word as the elections approach. This means that no single party would have won a majority of seats in the commons so the government would not be able to pass any laws without referring to the other parties. What follows is uncertainty as the rival parties attempt to form a coalition with one another. However, it was revealed last week that Nick Clegg, the leader of the Liberal Democrats (that is incidentally gaining ground almost every day), could not make the decision to form a coalition without the support of its members. Of course a partnership with the �Lib Dems� is what Gordon would likely want to do in the event of a hung parliament. News like this can only serve to further fuel the nervousness in the city - that if there were a hung parliament, it would not be swiftly dealt with. This is especially poignant at a time when the markets are looking to the new government to make policy changes regarding our economy.

In local London news, the family of Agnes Sina-Inakoju have pleaded for witnesses to come forward after she was shot in the neck while chatting with friends in a take-out in Hackney. Agnes sadly died on Friday aged 16. She was said to be �charismatic, ambitious, loving and a caring girl who strove to make others happy.� The shooting happened randomly as two young men opened fire into the crowded take-out. She was thought not to be the intended victim.

Lastly, thousands of British holiday makers are likely to be out of pocket after the Volcanic Ash Crisis cancelled their holidays (�vacations� for those of you who aren�t privy to the Queen�s English). There is a dispute going on as to whether it was an act of God (generally not covered under standard Insurance Policies) or bad weather. � I have to say that Iceland has a cheek, not only do they refuse to pay us back the money they lost when their banking system collapsed, but now they insist on spewing ash over us all. If it was an act of God then the dust would settle where it erupted!

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