The Times
"You might be forgiven for thinking that Americans are feeling just a little bit smug. As Britain teeters on the brink of dropping back into recession, the world’s biggest economy grew at an annual rate of 5.9 per cent, figures showed yesterday, revised upwards from the original figure of 5.7 per cent. ....But if America’s recovery is soggy, ours appears to be stillborn. Harnessed to our weakened financial service and property carthorses, we struggle to get momentum. The real recovery is in the Far East, but, unlike the US, Britain does little trade with those nations or even North America. Europe is our patch to till and, for now, the spring looks late indeed. "
Sunday, 28 February 2010
Pound under attack as debt worries grow
The Times
"..Greece’s woes had hit the euro hard but last week attention shifted to sterling, which was undermined by weak investment data and dovish comments from Mervyn King, the Bank of England governor, and some of his monetary policy committee (MPC) colleagues. ..."
"..Greece’s woes had hit the euro hard but last week attention shifted to sterling, which was undermined by weak investment data and dovish comments from Mervyn King, the Bank of England governor, and some of his monetary policy committee (MPC) colleagues. ..."
Germany and France agree to rescue Greece, with conditions
Telegraph
"Germany and France are putting together a plan to buy as much as €30bn (£26.7bn) of Greek debt to help the country avoid a calamitous sovereign default – but only if Athens commits to slashing public spending. "
"Germany and France are putting together a plan to buy as much as €30bn (£26.7bn) of Greek debt to help the country avoid a calamitous sovereign default – but only if Athens commits to slashing public spending. "
Saturday, 27 February 2010
Don't be fooled: GDP was actually revised down
Telegraph
"’m going to say something which might come as a surprise, given all the positive coverage this morning of the GDP figures. The Office for National Statistics has actually revised GDP down today – not up.The size of the British economy – in other words the total amount of cash generated by its companies and spent by its people – was actually £133m smaller in the fourth quarter than the ONS previously thought. Before today’s revisions, it thought the economy pumped out £315,845m worth of output in those three months. Now, it thinks the actual figure was more like £315,712m. ..."
"’m going to say something which might come as a surprise, given all the positive coverage this morning of the GDP figures. The Office for National Statistics has actually revised GDP down today – not up.The size of the British economy – in other words the total amount of cash generated by its companies and spent by its people – was actually £133m smaller in the fourth quarter than the ONS previously thought. Before today’s revisions, it thought the economy pumped out £315,845m worth of output in those three months. Now, it thinks the actual figure was more like £315,712m. ..."
Recovery? Who are you trying to kid?
Telegraph
"n some recent work for the Institute for Fiscal Studies, Barclays Capital concluded that the outlook for long-term growth – and therefore the already calamitous state of the public finances – is almost certainly worse than the Treasury has been forecasting. According to Barclays, the permanent loss of output in the UK economy may be as much as double what the Treasury has estimated, while the assumed future growth rate of 2.75 per cent is dismissed as unrealistically high. It is only mildly reassuring to know that in terms of delusional thinking, the Treasury is less guilty than many other developed nations, which have all been far too optimistic in their assumptions.
Barclays’ gloomy prognosis chimes with remarks made this week by the Governor of the Bank of England, Mervyn King. His take on the prospects for recovery did not make for pleasant listening. For more than a decade now, he reminded us, Britain and other deficit nations have consumed more than they’ve earned, and borrowed the difference. To heal the resulting wounds, that process needs to go sharply into reverse. "
"n some recent work for the Institute for Fiscal Studies, Barclays Capital concluded that the outlook for long-term growth – and therefore the already calamitous state of the public finances – is almost certainly worse than the Treasury has been forecasting. According to Barclays, the permanent loss of output in the UK economy may be as much as double what the Treasury has estimated, while the assumed future growth rate of 2.75 per cent is dismissed as unrealistically high. It is only mildly reassuring to know that in terms of delusional thinking, the Treasury is less guilty than many other developed nations, which have all been far too optimistic in their assumptions.
Barclays’ gloomy prognosis chimes with remarks made this week by the Governor of the Bank of England, Mervyn King. His take on the prospects for recovery did not make for pleasant listening. For more than a decade now, he reminded us, Britain and other deficit nations have consumed more than they’ve earned, and borrowed the difference. To heal the resulting wounds, that process needs to go sharply into reverse. "
Friday, 26 February 2010
Who owns the UK's debt?
BBC
"The amount the economy grew in the last three months of 2009 has been revised up from 0.1% to 0.3%.Even the first estimate, that it had grown a miserly 0.1%, was enough to take the country out of recession.So why does this 0.2 percentage point change matter? In large part, because of two key effects on the country's debt position.Firstly, if the economy is not growing, the amount of tax paid to the government will not grow, which means that the amount it has to borrow to fund its spending programmes will increase. Figures released last week showed that the government borrowed £4.3bn in January, which is usually a month when bumper corporate tax receipts mean that it does not have to borrow any money.Secondly, the UK does not want to get a reputation as a weak economy, because that would increase the interest rate it has to pay to borrow money...."
"The amount the economy grew in the last three months of 2009 has been revised up from 0.1% to 0.3%.Even the first estimate, that it had grown a miserly 0.1%, was enough to take the country out of recession.So why does this 0.2 percentage point change matter? In large part, because of two key effects on the country's debt position.Firstly, if the economy is not growing, the amount of tax paid to the government will not grow, which means that the amount it has to borrow to fund its spending programmes will increase. Figures released last week showed that the government borrowed £4.3bn in January, which is usually a month when bumper corporate tax receipts mean that it does not have to borrow any money.Secondly, the UK does not want to get a reputation as a weak economy, because that would increase the interest rate it has to pay to borrow money...."
Pound slides as figures underline scale of UK recession
Telegraph
"The pound slid to new lows on Friday after it emerged that an apparent improvement in Britain's growth late last year disguised the fact that the Office for National Statistics has actually cut its estimate of Britain's economic output. ".....
"In fact, the official estimate of the level of economic output in the fourth quarter was actually £133m lower than the ONS's previous estimate, at £315,712m. The ONS also revealed that the peak-to-trough fall in economic output was, at 6.2pc, significantly steeper than the 6pc decline previously estimated – making this the deepest recession since comparable records began just after the Second World War, and by most yardsticks the most severe economic contraction since the 1920s.
Andrew Lilico, chief economist at Policy Exchange, pointed out that the lower estimate of GDP would have far-reaching consequences for the public finances. He said: "A political consequence is that, since the economy will now be smaller at the start of the 2010/11 budget year, tax receipts should now be expected to be lower, so the 2010/11 and 2011/12 deficit projections will need to be revised up – perhaps to above £200bn – even if the deficit ends up fractionally down this year. That makes early spending cuts more urgent."
"The pound slid to new lows on Friday after it emerged that an apparent improvement in Britain's growth late last year disguised the fact that the Office for National Statistics has actually cut its estimate of Britain's economic output. ".....
"In fact, the official estimate of the level of economic output in the fourth quarter was actually £133m lower than the ONS's previous estimate, at £315,712m. The ONS also revealed that the peak-to-trough fall in economic output was, at 6.2pc, significantly steeper than the 6pc decline previously estimated – making this the deepest recession since comparable records began just after the Second World War, and by most yardsticks the most severe economic contraction since the 1920s.
Andrew Lilico, chief economist at Policy Exchange, pointed out that the lower estimate of GDP would have far-reaching consequences for the public finances. He said: "A political consequence is that, since the economy will now be smaller at the start of the 2010/11 budget year, tax receipts should now be expected to be lower, so the 2010/11 and 2011/12 deficit projections will need to be revised up – perhaps to above £200bn – even if the deficit ends up fractionally down this year. That makes early spending cuts more urgent."
Man who broke the Bank of England George Soros 'at centre of hedge funds betting against crisis-hit euro'
Daily Mail
" * Traders make a series of huge bets against single currency
* Fund managers could make hundreds of millions profit
* Greek PM says he will protect country against speculators
* Merkel: The euro is in a 'difficult situation' for the first time
The man about to break the euro? George Soros is said to be placing large bearish bets against the single currency - The man who broke the Bank of England in 1992 is said to be at the centre of a plot to cash in on the demise of the euro.George Soros's investment business Soros Fund Management is among a group of heavyweight Wall Street hedge funds which have launched a series of massive bets against the euro."
" * Traders make a series of huge bets against single currency
* Fund managers could make hundreds of millions profit
* Greek PM says he will protect country against speculators
* Merkel: The euro is in a 'difficult situation' for the first time
The man about to break the euro? George Soros is said to be placing large bearish bets against the single currency - The man who broke the Bank of England in 1992 is said to be at the centre of a plot to cash in on the demise of the euro.George Soros's investment business Soros Fund Management is among a group of heavyweight Wall Street hedge funds which have launched a series of massive bets against the euro."
Euro in danger as the Greek crisis deepens and Merkel admits currency is at risk
Daily Mail
"Greece's debt crisis has plunged the euro into a ‘ difficult situation’, the German Chancellor Angela Merkel admitted last night, prompting fresh fears about the collapse of the single currency.In the gravest sign yet of the international threat posed by Greece’s crippled economy, Mrs Merkel warned for the first time that the eurozone faces a ‘ dangerous’ period.The beleaguered euro initially fell in the wake of her comments and fresh speculation that Greece’s international credit rating may be downgraded.
On a dramatic day which also saw money markets around the world fall:
* The head of Germany’s leading debt management agency warned the euro would collapse if any member defaulted on its debt.
* U.S. regulators said they would investigate whether investment bank Goldman Sachs helped Athens disguise its budget deficit.
* EU inspectors visiting Athens told authorities they see a deeper than expected recession.
"Greece's debt crisis has plunged the euro into a ‘ difficult situation’, the German Chancellor Angela Merkel admitted last night, prompting fresh fears about the collapse of the single currency.In the gravest sign yet of the international threat posed by Greece’s crippled economy, Mrs Merkel warned for the first time that the eurozone faces a ‘ dangerous’ period.The beleaguered euro initially fell in the wake of her comments and fresh speculation that Greece’s international credit rating may be downgraded.
On a dramatic day which also saw money markets around the world fall:
* The head of Germany’s leading debt management agency warned the euro would collapse if any member defaulted on its debt.
* U.S. regulators said they would investigate whether investment bank Goldman Sachs helped Athens disguise its budget deficit.
* EU inspectors visiting Athens told authorities they see a deeper than expected recession.
Thursday, 25 February 2010
We must arm ourselves for a class war
Telegraph
"..Today, the economy is in a far more damaging spiral. The first leg of the financial and economic crisis, which stemmed from excessive private borrowing and the subsequent collapse of the banking industry, is over. The second leg, characterised by a crisis of sovereign debt in even the richest economies, is only just beginning. The Bank of England's inflation-targeting approach is under question from sources as authoritative as the International Monetary Fund. The world economy looks increasingly vulnerable to a "double-dip", tipping back into recession or stagnation rather than bouncing back to health."
"..Today, the economy is in a far more damaging spiral. The first leg of the financial and economic crisis, which stemmed from excessive private borrowing and the subsequent collapse of the banking industry, is over. The second leg, characterised by a crisis of sovereign debt in even the richest economies, is only just beginning. The Bank of England's inflation-targeting approach is under question from sources as authoritative as the International Monetary Fund. The world economy looks increasingly vulnerable to a "double-dip", tipping back into recession or stagnation rather than bouncing back to health."
London companies predict 'double dip' recession
Telegraph
""Businesses in the capital are bracing themselves for a return to recession or at the very best weak economic growth. The government needs to take heed and deal with the UK's public debt to restore confidence in UK markets and keep businesses free from the burden of higher taxes and onerous regulation," said Colin Stanbridge, chief executive of the LCCI. "
""Businesses in the capital are bracing themselves for a return to recession or at the very best weak economic growth. The government needs to take heed and deal with the UK's public debt to restore confidence in UK markets and keep businesses free from the burden of higher taxes and onerous regulation," said Colin Stanbridge, chief executive of the LCCI. "
Number of immigrants applying for British citizenship jumps 30% in just three months
Daily Mail
"More than 44,000 British passports were handed out to foreigners in just three months as the number of applications for citizenship soared 30 per cent.Latest Home Office figures reveal that 51,315 applications were made for citizenship in the final quarter of last year - a massive rise from the 39,325 requests made for the same period in 2008.The number of immigrants granted UK passports rose 15 per cent from 38,955 to 44,870. It is much higher than the previous record average of 41,000 passports handed out each quarter in 2007."
"More than 44,000 British passports were handed out to foreigners in just three months as the number of applications for citizenship soared 30 per cent.Latest Home Office figures reveal that 51,315 applications were made for citizenship in the final quarter of last year - a massive rise from the 39,325 requests made for the same period in 2008.The number of immigrants granted UK passports rose 15 per cent from 38,955 to 44,870. It is much higher than the previous record average of 41,000 passports handed out each quarter in 2007."
Wednesday, 24 February 2010
George Osborne: cut debt now or face economic disaster
Telegraph
"In a stark warning the shadow chancellor said that unless cuts were made imminently to public spending budgets the financial markets will lose confidence in Britain, with catastrophic consequences. ..Mr Osborne, giving the Mais economic lecture - a rare invitation for a shadow chancellor - said it would “undermine credibility” to try and argue that cuts are not needed and he warned that a country in debt was one that was not free. ...He added: “Over the summer we will work flat out to conduct the detailed departmental Spending Review for the years after 2011 that the current government has simply refused to carry out, and publish that results of that review in the autumn.
“The only possible reason why the Treasury has not already produced a Spending Review is that the Government do not want to spell out the difficult decisions that even their own spending plans imply.“We will not hesitate to take the difficult decisions to get Britain working. We will take targeted steps to reduce some budgets in-year... in order to build credibility and make a start on reducing the deficit.”
"In a stark warning the shadow chancellor said that unless cuts were made imminently to public spending budgets the financial markets will lose confidence in Britain, with catastrophic consequences. ..Mr Osborne, giving the Mais economic lecture - a rare invitation for a shadow chancellor - said it would “undermine credibility” to try and argue that cuts are not needed and he warned that a country in debt was one that was not free. ...He added: “Over the summer we will work flat out to conduct the detailed departmental Spending Review for the years after 2011 that the current government has simply refused to carry out, and publish that results of that review in the autumn.
“The only possible reason why the Treasury has not already produced a Spending Review is that the Government do not want to spell out the difficult decisions that even their own spending plans imply.“We will not hesitate to take the difficult decisions to get Britain working. We will take targeted steps to reduce some budgets in-year... in order to build credibility and make a start on reducing the deficit.”
Tories put economy at centre of campaign
Reuters
"LONDON (Reuters) - Britain's record national debt is the biggest threat to the economy, the Conservative Party will say on Wednesday as it puts the Labour government's economic record at the centre of its election campaign.With an election expected on May 6, both main parties are turning up the rhetoric on who should run a country just emerging from a recession that wiped out 6.0 percent of output and pushed the budget deficit to above 12 percent of GDP."
"LONDON (Reuters) - Britain's record national debt is the biggest threat to the economy, the Conservative Party will say on Wednesday as it puts the Labour government's economic record at the centre of its election campaign.With an election expected on May 6, both main parties are turning up the rhetoric on who should run a country just emerging from a recession that wiped out 6.0 percent of output and pushed the budget deficit to above 12 percent of GDP."
Sterling falls vs euro on BoE QE comment
Reuters
" LONDON, Feb 24 (Reuters) - Sterling fell against the euro on Wednesday after Bank of England policymakers left the door open to more asset puchases under quantiative easing.BoE Monetary Policy Committee member Adam Posen said the central bank would expand its quantiative easing programme if necessary after it put the 200 billion pound scheme on hold earlier this month."
" LONDON, Feb 24 (Reuters) - Sterling fell against the euro on Wednesday after Bank of England policymakers left the door open to more asset puchases under quantiative easing.BoE Monetary Policy Committee member Adam Posen said the central bank would expand its quantiative easing programme if necessary after it put the 200 billion pound scheme on hold earlier this month."
WTO says global trade shrank 12pc in 2009, biggest collapse since Second World War
Telegraph
"World trade has also been a casualty of the crisis," said Pascal Lamy, director general of the WTO, told business figures and policymakers at the European Policy Centre, a Brussels think-tank, on Wednesday.The decline is a steep downward revision on the organisation's estimate of a 10pc contraction in December."
"World trade has also been a casualty of the crisis," said Pascal Lamy, director general of the WTO, told business figures and policymakers at the European Policy Centre, a Brussels think-tank, on Wednesday.The decline is a steep downward revision on the organisation's estimate of a 10pc contraction in December."
Tuesday, 23 February 2010
Sterling takes a beating on Mervyn King's downbeat assessment
Telegraph
"Mervyn King’s last appearance before the election in front of the Commons Treasury Select Committee, which has just concluded, was a bit of a disappointment. This was not because Mr King and his Monetary Policy Committee colleagues gave a poor account of themselves in answering questions about the latest Inflation Report, but because the Committee failed to ask the right questions.To my mind, the two key questions were these: what is the trade off between monetary and fiscal policy likely to be after the election, or in other words, can there be reasonable certainty that the zero interest rate policy will be maintained through much of the next parliament if the new government embarks on the sort of fiscal consolidation demanded by the credit rating agencies, which is elimination of the deficit within five years; and secondly, is there a case for permanently adjusting the inflation target to allow the persistence of loose money conditions? This latter question is another way of asking whether narrow inflation targeting as the over-riding objective of monetary policy has been discredited by the crisis."
"Mervyn King’s last appearance before the election in front of the Commons Treasury Select Committee, which has just concluded, was a bit of a disappointment. This was not because Mr King and his Monetary Policy Committee colleagues gave a poor account of themselves in answering questions about the latest Inflation Report, but because the Committee failed to ask the right questions.To my mind, the two key questions were these: what is the trade off between monetary and fiscal policy likely to be after the election, or in other words, can there be reasonable certainty that the zero interest rate policy will be maintained through much of the next parliament if the new government embarks on the sort of fiscal consolidation demanded by the credit rating agencies, which is elimination of the deficit within five years; and secondly, is there a case for permanently adjusting the inflation target to allow the persistence of loose money conditions? This latter question is another way of asking whether narrow inflation targeting as the over-riding objective of monetary policy has been discredited by the crisis."
Sterling plunges after Bank of England warns UK might have to print MORE money
Daily Mail
"The value of Sterling plunged this afternoon after Bank of England chief Mervyn King told told MPs that Britain may have to print more money to boost the country's fragile economic recovery.Mr King sent the Pound into a fresh slump against the U.S. dollar after he admitted the Bank might extend its £200billion quantitative easing programme. In a gloomy update to MPs on the Treasury Committee, he warned that expectations for the British economy remain 'to the downside'.And he again stressed the need for the Government to give a 'detailed explanation' about how it will slash the £178billion deficit in public finances."
"The value of Sterling plunged this afternoon after Bank of England chief Mervyn King told told MPs that Britain may have to print more money to boost the country's fragile economic recovery.Mr King sent the Pound into a fresh slump against the U.S. dollar after he admitted the Bank might extend its £200billion quantitative easing programme. In a gloomy update to MPs on the Treasury Committee, he warned that expectations for the British economy remain 'to the downside'.And he again stressed the need for the Government to give a 'detailed explanation' about how it will slash the £178billion deficit in public finances."
Monday, 22 February 2010
Doom, gloom and crystal balls
The Times
"Marc Faber, the Swiss-born investment guru, is often called “Dr Doom” by the media. A former trader with Drexel Burnham Lambert, the corporate raider caught up in the junk bonds scandal of the late 1980s, Dr Faber set up his own business, Marc Faber Ltd in 1990, where he works as an investment adviser and fund manager.The ponytailed Dr Faber, who publishes the Gloom, Boom & Doom Report, a monthly market commentary, has a reputation for saying things that nobody wants to hear. "
"Marc Faber, the Swiss-born investment guru, is often called “Dr Doom” by the media. A former trader with Drexel Burnham Lambert, the corporate raider caught up in the junk bonds scandal of the late 1980s, Dr Faber set up his own business, Marc Faber Ltd in 1990, where he works as an investment adviser and fund manager.The ponytailed Dr Faber, who publishes the Gloom, Boom & Doom Report, a monthly market commentary, has a reputation for saying things that nobody wants to hear. "
UK businesses 'blinkered' on state of the economy after the recession
Telegraph
"The UK's business environment will "never return to pre-recession normality" and weak economic growth is likely to continue until 2015, according to some of the UK's top economists."
"The UK's business environment will "never return to pre-recession normality" and weak economic growth is likely to continue until 2015, according to some of the UK's top economists."
Secret Labour plan to increase immigration said public's opposition was 'racist'
Daily Mail
"Ministers were accused today of drawing up secret plans to increase immigration - and branding opponents of the controversial scheme 'racist'.A previously unseen joint Cabinet Office and Home Office report called for increases in foreign workers to meet the Government's 'economic and social objectives'.But it also stated that the public would be opposed to the shift because of 'racism' and urged ministers to try to alter public attitudes towards immigrants.The document, which was written in July 2000 and released under the Freedom of Information Act, outlined plans for a step change in the number of both high and low skilled migrants.A draft version of the report emerged last week, but the full copy was finally released today.In it, the authors warned: 'Policy development is constrained by public opinion and the current tone of public debate.'
'It is correct that public opinion favours relatively restrictive policies on immigration.'Sections advising ministers to adopt a 'clear strategy for public opinion and public debate' to change views were removed from the published version.Critics said the document showed ministers 'deliberately rode roughshod' over the public.
"Ministers were accused today of drawing up secret plans to increase immigration - and branding opponents of the controversial scheme 'racist'.A previously unseen joint Cabinet Office and Home Office report called for increases in foreign workers to meet the Government's 'economic and social objectives'.But it also stated that the public would be opposed to the shift because of 'racism' and urged ministers to try to alter public attitudes towards immigrants.The document, which was written in July 2000 and released under the Freedom of Information Act, outlined plans for a step change in the number of both high and low skilled migrants.A draft version of the report emerged last week, but the full copy was finally released today.In it, the authors warned: 'Policy development is constrained by public opinion and the current tone of public debate.'
'It is correct that public opinion favours relatively restrictive policies on immigration.'Sections advising ministers to adopt a 'clear strategy for public opinion and public debate' to change views were removed from the published version.Critics said the document showed ministers 'deliberately rode roughshod' over the public.
Europe's monetary union has become an instrument of deflation torture
Telegraph
"If the purpose of the euro was to bind Europe's tribes together and serve as catalyst for political union, EU elites must have been chastened by the outpouring of anti-German feeling in the Greek parliament last week. "
"If the purpose of the euro was to bind Europe's tribes together and serve as catalyst for political union, EU elites must have been chastened by the outpouring of anti-German feeling in the Greek parliament last week. "
Sunday, 21 February 2010
How Rudd the dud dropped Australia in the alphabet soup
The Sydney Morning Herald
"Rarely has a government promised so much, spent so much, said so much, and launched so many nationwide programs, and delivered so little value for money and expectation. Two years of Kevin Rudd has produced 20 years of debt, and most of it cannot be blamed on the global financial crisis. This alphabet soup is self-inflicted. ....Debt and deficit The Rudd government inherited a massive $90 billion financial firewall when it came to office, via a federal budget surplus, the Future Fund and two infrastructure funds. In two years the budget has gone from $20 billion in surplus to $58 billion in deficit. Net federal debt has gone from zero to a projection of between $130 billion and $180 billion. It took the previous government 10 years to dismantle the $96 billion debt mountain that it inherited. It took Rudd one year to build it back up again."
ED: Copy of Blair/ Brown government of the UK?
"Rarely has a government promised so much, spent so much, said so much, and launched so many nationwide programs, and delivered so little value for money and expectation. Two years of Kevin Rudd has produced 20 years of debt, and most of it cannot be blamed on the global financial crisis. This alphabet soup is self-inflicted. ....Debt and deficit The Rudd government inherited a massive $90 billion financial firewall when it came to office, via a federal budget surplus, the Future Fund and two infrastructure funds. In two years the budget has gone from $20 billion in surplus to $58 billion in deficit. Net federal debt has gone from zero to a projection of between $130 billion and $180 billion. It took the previous government 10 years to dismantle the $96 billion debt mountain that it inherited. It took Rudd one year to build it back up again."
ED: Copy of Blair/ Brown government of the UK?
Saturday, 20 February 2010
Thousands of illegal immigrants win right to stay in Britain under 'squatters' rights'
Telegraph
"A little-known rule, introduced by Labour in 2003, allows illegal immigrants to claim "indefinite leave to remain" if they manage to live in Britain's black economy for long enough or are failed asylum seekers who manage to avoid deportation.After 14 years they can apply to the Home Office which considers factors such as "compassionate circumstances, strength of connection to the UK and previous criminal record", before deciding whether an illegal immigrant will be allowed to stay.If successful, the immigrant will then be allowed full access to the welfare state and be eligible to apply for a British passport.Since rules changed in April 2003, 7,245 illegals have won the right to live here permanently – more than 1,000 a year on average. It is likely that many paid no income tax during the 14 years they spent in Britain.The Home Office estimated in 2005 that the illegal immigrant population in Britain was between 310,000 and 570,000 but other groups such as Migrationwatch UK, which campaigns against mass immigration, have put the figure far higher.Migrationwatch UK now believes the true number of illegal immigrants could be as high as one million. "
"A little-known rule, introduced by Labour in 2003, allows illegal immigrants to claim "indefinite leave to remain" if they manage to live in Britain's black economy for long enough or are failed asylum seekers who manage to avoid deportation.After 14 years they can apply to the Home Office which considers factors such as "compassionate circumstances, strength of connection to the UK and previous criminal record", before deciding whether an illegal immigrant will be allowed to stay.If successful, the immigrant will then be allowed full access to the welfare state and be eligible to apply for a British passport.Since rules changed in April 2003, 7,245 illegals have won the right to live here permanently – more than 1,000 a year on average. It is likely that many paid no income tax during the 14 years they spent in Britain.The Home Office estimated in 2005 that the illegal immigrant population in Britain was between 310,000 and 570,000 but other groups such as Migrationwatch UK, which campaigns against mass immigration, have put the figure far higher.Migrationwatch UK now believes the true number of illegal immigrants could be as high as one million. "
So where did all the money go?
Telegraph
"So here, for any of you who might have forgotten, is a quick reminder: some £76bn from the Treasury to buy shares in RBS and Lloyds Banking Group ; £200bn worth of lender-of-last resort liquidity support provided by the Bank of England to stricken banks at the height of the crisis; £250bn of wholesale lending guaranteed by the Bank through the credit guarantee scheme; £185bn of loans to banks through the Special Liquidity Scheme; £40bn of loans and other funding to Bradford & Bingley and the Financial Services Compensation Scheme. Then, deep breath, there is the £200bn of liabilities taken on board from the Asset Protection Scheme, and the £200bn of cash poured into the economy through quantitative easing ."
Friday, 19 February 2010
Double-dip recession fears intensify on dire retail figures
The Times
"Fears of a double-dip recession intensified this morning as the sharpest monthly fall in retail sales in one and a half years was revealed.The downbeat spending figures come the morning after a shock rise in public sector borrowing emerged, casting doubt over the recovery. The £4.3 billion deficit for last month is the first time on record that the Treasury has not recorded a January surplus.Treasury coffers were hit by a plunge in tax receipts prompting concern that Britain’s finances could be worse than those of Greece."
"Fears of a double-dip recession intensified this morning as the sharpest monthly fall in retail sales in one and a half years was revealed.The downbeat spending figures come the morning after a shock rise in public sector borrowing emerged, casting doubt over the recovery. The £4.3 billion deficit for last month is the first time on record that the Treasury has not recorded a January surplus.Treasury coffers were hit by a plunge in tax receipts prompting concern that Britain’s finances could be worse than those of Greece."
Britain's debt set to be higher than that of Greece
Telegraph
"Britain's public finances may end this year in a worse state than those of Greece, economists warned yesterday, raising serious fears over the economic stability of the country."
Britain's deficit third worst in the world, table
Telegraph
"Britain has one of the worst deficits as a percentage of GDP in the world, according to OECD figures. Only Iceland and Greece have higher deficits and experts fear it could overtake Greece. Here is a table of how the UK compares with other nations.
Iceland
15.7
Greece
12.7
Britain
12.6
Ireland
12.2
"Britain has one of the worst deficits as a percentage of GDP in the world, according to OECD figures. Only Iceland and Greece have higher deficits and experts fear it could overtake Greece. Here is a table of how the UK compares with other nations.
Iceland
15.7
Greece
12.7
Britain
12.6
Ireland
12.2
Pound slides further on surprise Fed rate rise
Telegraph
"Sterling hit a nine-month low against the dollar on Friday as the US currency continued to gain broadly after the Federal Reserve raised its discount rate. "
"Sterling hit a nine-month low against the dollar on Friday as the US currency continued to gain broadly after the Federal Reserve raised its discount rate. "
It's official: the crisis in UK public finances has taken a turn for the worse
Telegraph
"What can go wrong, is going wrong for the British economy.Despite all the money that's been pumped in, including the Bank of England's £200bn in quantitative easing, activity will be "quite hesitant" according to Kate Barker of the Bank's Monetary Policy Committee.The support the economy received last year stopped a recession turning into a depression so was worth it. But the latest news reveals that our crisis in public finances is getting worse, while the real economy should prepare for a return to negative growth. ..."
"What can go wrong, is going wrong for the British economy.Despite all the money that's been pumped in, including the Bank of England's £200bn in quantitative easing, activity will be "quite hesitant" according to Kate Barker of the Bank's Monetary Policy Committee.The support the economy received last year stopped a recession turning into a depression so was worth it. But the latest news reveals that our crisis in public finances is getting worse, while the real economy should prepare for a return to negative growth. ..."
Thursday, 18 February 2010
British finances to be 'worse than Greek deficit'
The Times
"The Government is on course to run up a higher budget deficit this year than Greece after dire figures on the public finances today showed that it borrowed £4.3 billion more than it received in taxes in January, the first time this has happened.January is usually a bumper month for tax receipts as people submit their tax returns and corporation tax payments fall due.However, a steep decline in income tax and capital gains tax payments, coupled with a sharp rise in interest payments to cover the Government's debts, forced the Treasury to borrow money to balance its books.The dire data confounded economists' expectations of a surplus of £2.8 billion, and falls far short of the £5.3 billion surplus recorded in January last year."
"The Government is on course to run up a higher budget deficit this year than Greece after dire figures on the public finances today showed that it borrowed £4.3 billion more than it received in taxes in January, the first time this has happened.January is usually a bumper month for tax receipts as people submit their tax returns and corporation tax payments fall due.However, a steep decline in income tax and capital gains tax payments, coupled with a sharp rise in interest payments to cover the Government's debts, forced the Treasury to borrow money to balance its books.The dire data confounded economists' expectations of a surplus of £2.8 billion, and falls far short of the £5.3 billion surplus recorded in January last year."
Britain posts first deficit for January since records began
Telegraph
"The Office for National Statistics said on Thursday that spending by the Government had exceeded its income by £4.3bn.It is first time the Government has had to borrow in a January since records began in 1993. Economists had expected a surplus of around £1bn."
"The Office for National Statistics said on Thursday that spending by the Government had exceeded its income by £4.3bn.It is first time the Government has had to borrow in a January since records began in 1993. Economists had expected a surplus of around £1bn."
Public borrowing hit £4.3bn last month... the first January deficit since records began
Daily Mail
"The dire state of Britain's public finances was highlighted again this morning when it was revealed the Government had to borrow money in January for the first time since records began.Labour's hopes of a 'feel-good factor' leading up to the general election took a serious knock by the news that public borrowing for the month was £4.3billion.Analysts had predicted that the Treasury would actually repay around £1billion.The Government usually enjoys a surplus at the beginning of the year because of increased amounts of income and corporation tax.Last January, when Britain was in the teeth of the worst recession since the 1930s, some £5.3billion was repaid."
"The dire state of Britain's public finances was highlighted again this morning when it was revealed the Government had to borrow money in January for the first time since records began.Labour's hopes of a 'feel-good factor' leading up to the general election took a serious knock by the news that public borrowing for the month was £4.3billion.Analysts had predicted that the Treasury would actually repay around £1billion.The Government usually enjoys a surplus at the beginning of the year because of increased amounts of income and corporation tax.Last January, when Britain was in the teeth of the worst recession since the 1930s, some £5.3billion was repaid."
Wednesday, 17 February 2010
Bank of England rate setters voted 9-0 to halt quantitative easing
Telegraph
" The Bank of England has said time is ticking down on quantitative easing...Minutes of the MPC's February 3-4 meeting also showed a unanimous vote in favour of leaving interest rates at 0.5pc, though the decision on whether to increase the £200bn QE programme was "very finely balanced" for some MPC members."
" The Bank of England has said time is ticking down on quantitative easing...Minutes of the MPC's February 3-4 meeting also showed a unanimous vote in favour of leaving interest rates at 0.5pc, though the decision on whether to increase the £200bn QE programme was "very finely balanced" for some MPC members."
Frozen family budgets squeezed as inflation DOUBLES in two months
Daily Mail
"....Food price inflation has taken off again and, with the Asian economies recovering strongly, the upward pressure on both food and energy prices will remain strong.Similarly, there is now very little doubt that whichever party wins the expected May election it is a given that VAT rates will be lifted by at least 2.5 percentage points to 20 per cent as the government seeks to bring the public finances under control. The Institute of Fiscal Studies has gone as far as to suggest a 21 per cent VAT rate.But the greatest threat to longer term price stability is the Bank's monetary policy.In its efforts to refloat the economy, the Bank has held interest rates at 1 per cent and added some £200billion to the supply of money. ..."
"....Food price inflation has taken off again and, with the Asian economies recovering strongly, the upward pressure on both food and energy prices will remain strong.Similarly, there is now very little doubt that whichever party wins the expected May election it is a given that VAT rates will be lifted by at least 2.5 percentage points to 20 per cent as the government seeks to bring the public finances under control. The Institute of Fiscal Studies has gone as far as to suggest a 21 per cent VAT rate.But the greatest threat to longer term price stability is the Bank's monetary policy.In its efforts to refloat the economy, the Bank has held interest rates at 1 per cent and added some £200billion to the supply of money. ..."
Tuesday, 16 February 2010
Family budgets squeezed as VAT rise sends inflation soaring to 14-month high of 3.5%
Daily Mail
"Families and savers are facing a massive squeeze on their finances after inflation soared beyond its official target last month.The official Consumer Price Index(CPI) inflation measure has seen a record two month increase from 1.9 per cent in November to 3.5 per cent in January - the highest figure in 14 months.At the same time the Retail Prices Index (RPI) inflation, which includes the cost of mortgages and housing, has also rocketed from 2.1per cent to 3.7per cent.The figures mean that families already struggling to pay the bills as wages fall are being hit with huge increases on food essentials compared to January last year."
"Families and savers are facing a massive squeeze on their finances after inflation soared beyond its official target last month.The official Consumer Price Index(CPI) inflation measure has seen a record two month increase from 1.9 per cent in November to 3.5 per cent in January - the highest figure in 14 months.At the same time the Retail Prices Index (RPI) inflation, which includes the cost of mortgages and housing, has also rocketed from 2.1per cent to 3.7per cent.The figures mean that families already struggling to pay the bills as wages fall are being hit with huge increases on food essentials compared to January last year."
Welcome to boarded-up Britain: One in eight shops now stand empty as recession hits high streets
Daily Mail
"The number of empty shops blighting our high streets has trebled since the start of the credit crunch, it was revealed yesterday.A report shows 12.4 per cent of shops in town centres are empty, compared to 4 per cent in the summer of 2007.In some towns and cities a quarter of shops lie vacant as the recession has exacerbated the effect of other problems, such as rising rents and the growth of out-of-town shopping centres."
"The number of empty shops blighting our high streets has trebled since the start of the credit crunch, it was revealed yesterday.A report shows 12.4 per cent of shops in town centres are empty, compared to 4 per cent in the summer of 2007.In some towns and cities a quarter of shops lie vacant as the recession has exacerbated the effect of other problems, such as rising rents and the growth of out-of-town shopping centres."
Greece loses EU voting power in blow to sovereignty
Telegraph
"While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty. "We certainly won't let them off the hook," said Austria's finance minister, Josef Proll, echoing views shared by colleagues in Northern Europe. Some German officials have called for Greece to be denied a vote in all EU matter until it emerges from "receivership".The EU has still refused to reveal details of how it might help Greece raise €30bn (£26bn) from global debt markets by the end of June. Investors are unsure whether this is part of Kabuki play of "constructive ambiguity" to pressure Greece and keep markets guessing, or reflects the deep reluctance by Germany to be drawn deeper in an EU fiscal union. Greek bonds sold off as ten-year yields jumped to 6.42pc, but the euro rallied to $1.3765 against the dollar as broader issues resurfaced in currency markets."
"While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty. "We certainly won't let them off the hook," said Austria's finance minister, Josef Proll, echoing views shared by colleagues in Northern Europe. Some German officials have called for Greece to be denied a vote in all EU matter until it emerges from "receivership".The EU has still refused to reveal details of how it might help Greece raise €30bn (£26bn) from global debt markets by the end of June. Investors are unsure whether this is part of Kabuki play of "constructive ambiguity" to pressure Greece and keep markets guessing, or reflects the deep reluctance by Germany to be drawn deeper in an EU fiscal union. Greek bonds sold off as ten-year yields jumped to 6.42pc, but the euro rallied to $1.3765 against the dollar as broader issues resurfaced in currency markets."
Monday, 15 February 2010
Germany growls as Greece balks at immolation
Telegraph
"The EU has issued a political pledge to rescue Greece – and by precedent, all Club Med – without first securing a mandate from the parliaments of creditor nations.Holland's Tweede Kamer has passed a motion backed by all parties prohibiting the use of Dutch taxpayer money to bail out Greece, either through bilateral aid or EU bodies. "Not one cent for Greece," was the headline in Trouw. The right-wing PVV proposed "chucking Greece out of EU altogether".Germany's Bundestag has drafted an opinion deeming aid to Greece illegal. State bodies may not purchase the debt of another state, in whatever guise...."
"The EU has issued a political pledge to rescue Greece – and by precedent, all Club Med – without first securing a mandate from the parliaments of creditor nations.Holland's Tweede Kamer has passed a motion backed by all parties prohibiting the use of Dutch taxpayer money to bail out Greece, either through bilateral aid or EU bodies. "Not one cent for Greece," was the headline in Trouw. The right-wing PVV proposed "chucking Greece out of EU altogether".Germany's Bundestag has drafted an opinion deeming aid to Greece illegal. State bodies may not purchase the debt of another state, in whatever guise...."
UK jobless rate would be 15pc if Britain had joined euro, says CEBR
Telegraph
"Britain's unemployment rate would be twice as high as it is now if Tony Blair had taken Britain into the euro when he was prime minister, the Centre for Economic and Business Research said on Monday. "
"Britain's unemployment rate would be twice as high as it is now if Tony Blair had taken Britain into the euro when he was prime minister, the Centre for Economic and Business Research said on Monday. "
Greece refuses EU austerity measures demand
The Times
"The Greek Government looked set on a collision course with the European Commission today as its finance minister denied demands that it needed to take further austerity measures to cut its debt.Hours ahead of a two-day meeting of eurozone finance ministers in Brussels, being held to scrutinise Greece's existing plan to cut is deficit, Olli Rehn, the new EU Commissioner for Economic and Monetary Affairs said: "Our view is that risks... are materialising, and therefore there is a clear case for additional measures.”But George Papaconstantinou, the country’s Finance Minister, said the EU needed to show more support to Greece instead of expecting more detailed austerity measures."
"The Greek Government looked set on a collision course with the European Commission today as its finance minister denied demands that it needed to take further austerity measures to cut its debt.Hours ahead of a two-day meeting of eurozone finance ministers in Brussels, being held to scrutinise Greece's existing plan to cut is deficit, Olli Rehn, the new EU Commissioner for Economic and Monetary Affairs said: "Our view is that risks... are materialising, and therefore there is a clear case for additional measures.”But George Papaconstantinou, the country’s Finance Minister, said the EU needed to show more support to Greece instead of expecting more detailed austerity measures."
Sunday, 14 February 2010
Can anyone fix the euro puzzle?
Telegraph
"...His broad proposal was that the northern European nations should at the least issue a statement promising to stand behind Greece, and perhaps go so far as to spell out how much they would put into a potential lifeboat. Merkel was not convinced. For one thing, she was well aware that Sarkozy had his own political motivations for such a move: the alternative, an International Monetary Fund (IMF) bail-out, would enable IMF chief Dominique Strauss-Kahn, Sarkozy's most likely opponent at the next French election, to ride in and "save the euro".But, more fundamentally, by organising a bail-out Germany would be seen as providing unfair support for a country which had proven itself incapable of fiscal rectitude. Such a move would not only be hideously unpopular with German taxpayers, it would potentially encourage poorer countries to follow Greece's lead. Moreover, under the German constitution, such moves were legally tricky to organise. ..."
"...His broad proposal was that the northern European nations should at the least issue a statement promising to stand behind Greece, and perhaps go so far as to spell out how much they would put into a potential lifeboat. Merkel was not convinced. For one thing, she was well aware that Sarkozy had his own political motivations for such a move: the alternative, an International Monetary Fund (IMF) bail-out, would enable IMF chief Dominique Strauss-Kahn, Sarkozy's most likely opponent at the next French election, to ride in and "save the euro".But, more fundamentally, by organising a bail-out Germany would be seen as providing unfair support for a country which had proven itself incapable of fiscal rectitude. Such a move would not only be hideously unpopular with German taxpayers, it would potentially encourage poorer countries to follow Greece's lead. Moreover, under the German constitution, such moves were legally tricky to organise. ..."
Immigration: a plan to alter the nation's soul
Telegraph
"But as it turns out, the policy was motivated by something far more radical and fundamental than any of this. The full text of the draft policy paper composed in 2000 by a Home Office research unit – the gist of which had already been made public by a former Labour adviser – was released last week under Freedom of Information rules. Properly understood, it is political dynamite. What it states quite unequivocally was that mass immigration was being encouraged at least as much for "social objectives" as for economic ones. Migration was intended specifically to alter the demographic and cultural pattern of the country: to produce by force majeure the changes in attitude that the Labour government saw itself as representing.Tony Blair's "forces of conservatism" speech; his improbable presentation of Britain as a "young country"; the advocacy of a multicultural society which would have to reassess its own history, replacing traditional pride with inherited guilt: all of this could be facilitated by a large influx of migrants whose presence in the population would require the wholesale deconstruction of the country's sense of its own identity."
"But as it turns out, the policy was motivated by something far more radical and fundamental than any of this. The full text of the draft policy paper composed in 2000 by a Home Office research unit – the gist of which had already been made public by a former Labour adviser – was released last week under Freedom of Information rules. Properly understood, it is political dynamite. What it states quite unequivocally was that mass immigration was being encouraged at least as much for "social objectives" as for economic ones. Migration was intended specifically to alter the demographic and cultural pattern of the country: to produce by force majeure the changes in attitude that the Labour government saw itself as representing.Tony Blair's "forces of conservatism" speech; his improbable presentation of Britain as a "young country"; the advocacy of a multicultural society which would have to reassess its own history, replacing traditional pride with inherited guilt: all of this could be facilitated by a large influx of migrants whose presence in the population would require the wholesale deconstruction of the country's sense of its own identity."
Friday, 12 February 2010
Euro is facing 'inevitable break up' despite Greece bailout, leading bank warns
Daily Mail
"The European single currency is facing an ‘inevitable break up’ a leading French bank warned yesterday.Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide ‘sticking plasters’ to cover the deep-seated flaws in the Eurozone bloc.The stark warning came as the Euro slipped further on the currency markets and dire growth figures raised the prospect of a ‘double dip’ recession in the embattled Eurozone. ..."
"The European single currency is facing an ‘inevitable break up’ a leading French bank warned yesterday.Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide ‘sticking plasters’ to cover the deep-seated flaws in the Eurozone bloc.The stark warning came as the Euro slipped further on the currency markets and dire growth figures raised the prospect of a ‘double dip’ recession in the embattled Eurozone. ..."
Britain's quarter of a trillion pound exposure to the PIIGS
Telegraph
"Here, in a chart, is why Britain can’t afford to be complacent about the plight of Portugal, Ireland, Italy, Greece and Spain. UK banks are exposed to these countries to the tune of 16 per cent of gross domestic product, according to this chart from Stephen Jen of BlueGold Capital Management (the figures themselves are Bank for International Settlement numbers)."
EU's lack of detail on Greek rescue leads to confusion
Telegraph
"In an unprecedented move, heads of state from the euro area issued a statement pledging "determined and co-ordinated action" to prevent the Greek fiscal crisis from descending into a full-blown economic collapse, but stopped short of detailing how much cash would be provided, and from whom.In a short statement, the leaders indicated that they stood ready to provide economic support for the country, which is struggling to borrow in capital markets after running up an unprecedented budget deficit."
"In an unprecedented move, heads of state from the euro area issued a statement pledging "determined and co-ordinated action" to prevent the Greek fiscal crisis from descending into a full-blown economic collapse, but stopped short of detailing how much cash would be provided, and from whom.In a short statement, the leaders indicated that they stood ready to provide economic support for the country, which is struggling to borrow in capital markets after running up an unprecedented budget deficit."
Thursday, 11 February 2010
Wednesday, 10 February 2010
Traders splash £5 billion betting against the euro as the single currency falters amid debt crisis
Daily Mail
"Traders and hedge funds are making record bets against the euro, underlining the mounting alarm over the region’s debt crisis.Market players have bet almost £5billion that the value of the currency will fall against the U.S. dollar, the largest ‘short position’ since it was launched.European governments have been drawing up plans for a possible bail-out of Greece, amid fears it could be spiralling towards debt default."
"Traders and hedge funds are making record bets against the euro, underlining the mounting alarm over the region’s debt crisis.Market players have bet almost £5billion that the value of the currency will fall against the U.S. dollar, the largest ‘short position’ since it was launched.European governments have been drawing up plans for a possible bail-out of Greece, amid fears it could be spiralling towards debt default."
Britain's economy now as bad as 1970s, JP Morgan warns
Telegraph
"JP Morgan, said that in “many” ways “the UK’s fiscal position is currently worse than observed around the IMF loan in 1976”.The bank warns that Government debts, when compared to the total size of the economy, are higher than during the 1970s crisis."
"JP Morgan, said that in “many” ways “the UK’s fiscal position is currently worse than observed around the IMF loan in 1976”.The bank warns that Government debts, when compared to the total size of the economy, are higher than during the 1970s crisis."
How Labour threw open doors to mass migration in secret plot to make a multicultural UK
Daily Mail
"Labour threw open the doors to mass migration in a deliberate policy to change the social make-up of the UK, secret papers suggest.A draft report from the Cabinet Office shows that ministers wanted to ‘maximise the contribution’ of migrants to their ‘social objectives’.The number of foreigners allowed in the UK increased by as much as 50 per cent in the wake of the report, written in 2000.
-------------------
Paying the price for a decade of deception
"...In an article for the Evening Standard, Andrew Neather revealed that ‘it didn’t just happen: the deliberate policy of ministers from late 2000 until at least February last year ...was to open up the UK to mass migration’. ...He went on to describe a Government policy document which he had helped to write in 2000.He said that ‘drafts were handed out in summer 2000 only with extreme reluctance: there was paranoia about it reaching the media’.The paper eventually surfaced as a purely technical product of the research department of the Home Office but earlier drafts that he saw ‘included a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural’.
"Labour threw open the doors to mass migration in a deliberate policy to change the social make-up of the UK, secret papers suggest.A draft report from the Cabinet Office shows that ministers wanted to ‘maximise the contribution’ of migrants to their ‘social objectives’.The number of foreigners allowed in the UK increased by as much as 50 per cent in the wake of the report, written in 2000.
-------------------
Paying the price for a decade of deception
"...In an article for the Evening Standard, Andrew Neather revealed that ‘it didn’t just happen: the deliberate policy of ministers from late 2000 until at least February last year ...was to open up the UK to mass migration’. ...He went on to describe a Government policy document which he had helped to write in 2000.He said that ‘drafts were handed out in summer 2000 only with extreme reluctance: there was paranoia about it reaching the media’.The paper eventually surfaced as a purely technical product of the research department of the Home Office but earlier drafts that he saw ‘included a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural’.
Labour's 'secret plan' to lure migrants
Telegraph
"The release of a previously unseen document suggested that Labour’s migration policy over the past decade had been aimed not just at meeting the country’s economic needs, but also the Government’s “social objectives”. ....However, the full document was made public only yesterday following a Freedom of Information request by Migrationwatch, a pressure group. A version of the paper was published in 2001, but most of the references to “social objectives” had been removed. In the executive summary alone, six out of eight uses of the phrase were deleted.Labour has overseen an unprecedented rise in immigration, which has led to a rise of about three million in the UK population since 1997. Until recently, it accused opponents who called for tougher controls of playing the “race card”. Labour was forced to change its rhetoric amid concerns that the economic and social reality of immigration had alienated voters in its heartlands. "
"The release of a previously unseen document suggested that Labour’s migration policy over the past decade had been aimed not just at meeting the country’s economic needs, but also the Government’s “social objectives”. ....However, the full document was made public only yesterday following a Freedom of Information request by Migrationwatch, a pressure group. A version of the paper was published in 2001, but most of the references to “social objectives” had been removed. In the executive summary alone, six out of eight uses of the phrase were deleted.Labour has overseen an unprecedented rise in immigration, which has led to a rise of about three million in the UK population since 1997. Until recently, it accused opponents who called for tougher controls of playing the “race card”. Labour was forced to change its rhetoric amid concerns that the economic and social reality of immigration had alienated voters in its heartlands. "
Tuesday, 9 February 2010
Who in their right mind will bail out the poor relations of Europe?
Telegraph
"...Look at the state of Greece, and of the Spanish and Portuguese not far behind it. Look at the commendable measures taken by the government of Brian Cowen in Ireland, which have caused strictures of a sort that would, we are told, occasion riots here. That is the joy of the euro: welcome to meltdown. .."
"...Look at the state of Greece, and of the Spanish and Portuguese not far behind it. Look at the commendable measures taken by the government of Brian Cowen in Ireland, which have caused strictures of a sort that would, we are told, occasion riots here. That is the joy of the euro: welcome to meltdown. .."
Trichet departure sparks Greece rescue talk
Reuters
"SYDNEY (Reuters) - European Central Bank President Jean-Claude Trichet is cutting short a trip to Australia to attend a special European Union summit, prompting market speculation initiatives are in the works to help resolve Greece's debt problems.EU heads of state are due to meet on Thursday in Brussels for a special summit on the economy under pressure to restore confidence among investors worried that rising debt in Greece, Portugal and other weaker states in the euro zone could undermine a global recovery.The summit was called in early January and Trichet had been expected to spend both Tuesday and Wednesday in Australia at central bank meetings. Instead, he is leaving early, officials at the Reserve Bank of Australia and the ECB said."
"SYDNEY (Reuters) - European Central Bank President Jean-Claude Trichet is cutting short a trip to Australia to attend a special European Union summit, prompting market speculation initiatives are in the works to help resolve Greece's debt problems.EU heads of state are due to meet on Thursday in Brussels for a special summit on the economy under pressure to restore confidence among investors worried that rising debt in Greece, Portugal and other weaker states in the euro zone could undermine a global recovery.The summit was called in early January and Trichet had been expected to spend both Tuesday and Wednesday in Australia at central bank meetings. Instead, he is leaving early, officials at the Reserve Bank of Australia and the ECB said."
Greek finance minister says turning for help would send 'worst possible signal'
Telegraph
"Speaking in a television interview with Bloomberg, Mr Papaconstantinou said that "the worst possible signal which we could send out is one calling for outside help."
He added that the country will "tackle the deficit.” Greece has pledged to bring its deficit down to 3pc of its gross domestic product from 12.7pc this year to avoid being engulfed by ever greater interest payments. Financial markets remain unsure whether Greek voters will be prepared to stomach the austerity measures and public spending cuts required. "
"Speaking in a television interview with Bloomberg, Mr Papaconstantinou said that "the worst possible signal which we could send out is one calling for outside help."
He added that the country will "tackle the deficit.” Greece has pledged to bring its deficit down to 3pc of its gross domestic product from 12.7pc this year to avoid being engulfed by ever greater interest payments. Financial markets remain unsure whether Greek voters will be prepared to stomach the austerity measures and public spending cuts required. "
UK sales fall prompts fears of 'double-dip' recession
Telegraph
"Fears that Britain may already be succumbing to a "double-dip" recession materialised as it emerged that 2010 opened with the worst January for the high street since comparable records began 15 years ago."
"Fears that Britain may already be succumbing to a "double-dip" recession materialised as it emerged that 2010 opened with the worst January for the high street since comparable records began 15 years ago."
Monday, 8 February 2010
Greek crisis intensifies as Joe Stiglitz calls for Europe to 'teach the speculators a lesson'
Telegraph
"Yields on Greek debt rose by 14 basis points, as investors digested the fact that G7 and eurozone finance ministers refused at their weekend summit to provide more detail on a rescue package for the troubled economy.Alongside Portugal, Spain, Italy and Ireland, Greece has been the focus of widespread market selling over the past few weeks, with investors fearing the countries may be unable to repair their balance sheets alone. The interest rate on Greek 10-year benchmark debt is now 6.75pc, compared with fellow euro member Germany’s rate of 3.14pc. Suspicions that the Greek crisis could give way to a full-blown attack on the euro have been reinforced as it emerged that currency speculators have increased their bets against the currency to the highest level since its creation."
"Yields on Greek debt rose by 14 basis points, as investors digested the fact that G7 and eurozone finance ministers refused at their weekend summit to provide more detail on a rescue package for the troubled economy.Alongside Portugal, Spain, Italy and Ireland, Greece has been the focus of widespread market selling over the past few weeks, with investors fearing the countries may be unable to repair their balance sheets alone. The interest rate on Greek 10-year benchmark debt is now 6.75pc, compared with fellow euro member Germany’s rate of 3.14pc. Suspicions that the Greek crisis could give way to a full-blown attack on the euro have been reinforced as it emerged that currency speculators have increased their bets against the currency to the highest level since its creation."
Euro under pressure as Greek crisis becomes a 'huge game of chicken'
Telegraph
"The euro faced renewed selling in foreign-exchange markets on Monday morning as doubts about the ability of Greece to cut its deficit heaped pressure on the single currency....The euro fell more than half a cent against the dollar to $1.3630 in early trading and also weakened against sterling as uncertainty over whether Greece will need to turn to the European Union or the International Monetary Fund for a bail-out persisted.Greece's spiralling deficit - estimated at 12.7pc of its gross domestic product last year - stands far beyond the 3pc threshold permitted by the rules of European Monetary Union (EMU) and has left the single currency facing its biggest challenge in its short history."
"The euro faced renewed selling in foreign-exchange markets on Monday morning as doubts about the ability of Greece to cut its deficit heaped pressure on the single currency....The euro fell more than half a cent against the dollar to $1.3630 in early trading and also weakened against sterling as uncertainty over whether Greece will need to turn to the European Union or the International Monetary Fund for a bail-out persisted.Greece's spiralling deficit - estimated at 12.7pc of its gross domestic product last year - stands far beyond the 3pc threshold permitted by the rules of European Monetary Union (EMU) and has left the single currency facing its biggest challenge in its short history."
Sunday, 7 February 2010
G7: Europe must rescue Greece
The Times
"FINANCE ministers and officials from the G7 countries, meeting in Canada yesterday, insisted there would be a “European” solution to the problems affecting Greece, Portugal and Spain and no need for an IMF rescue.“We told our partners we had to solve the problem ourselves,” said Jean-Claude Juncker, chairman of the Eurogroup of finance ministers. The difficulties in Greece extended to Portugal and Spain last week, with credit spreads widening sharply, provoking a plunge in local stock markets.Wolfgang Schaeuble, the German finance minister, said the problems would not undermine the euro but warned that Greece would have to make sacrifices.“The euro will stay stable: markets always tend to overreact,” he said. “Greece has to realise that when you break the rules over a long period of time, you have to pay a high price.”
"FINANCE ministers and officials from the G7 countries, meeting in Canada yesterday, insisted there would be a “European” solution to the problems affecting Greece, Portugal and Spain and no need for an IMF rescue.“We told our partners we had to solve the problem ourselves,” said Jean-Claude Juncker, chairman of the Eurogroup of finance ministers. The difficulties in Greece extended to Portugal and Spain last week, with credit spreads widening sharply, provoking a plunge in local stock markets.Wolfgang Schaeuble, the German finance minister, said the problems would not undermine the euro but warned that Greece would have to make sacrifices.“The euro will stay stable: markets always tend to overreact,” he said. “Greece has to realise that when you break the rules over a long period of time, you have to pay a high price.”
G7 warns IMF not to interfere in Greece
Daily Mail
"Stock markets will remain on tenterhooks after the two-day meeting of finance ministers from the G7 leading nations in Canada did little to ease growing concerns about the deep European budget crisis that has sent the euro and share prices plummeting.Telling the International Monetary Fund to keep its distance, G7 ministers said that there would be a ' European' solution to the problems affecting Greece.European Central Bank president Jean-Claude Trichet said he was ' confident that Greece would meet tougher new belttightening targets'.Greece's budget deficit has mushroomed to almost13% of its national economy. And its debt has kept growing, threatening the economic stability of the entire euro zone.Greek finance minister George Papaconstantinou said yesterday: 'Greece will stick to its deficit-cutting plan. The first three months of the year will be crucial for regaining investors and EU confidence.'
"Stock markets will remain on tenterhooks after the two-day meeting of finance ministers from the G7 leading nations in Canada did little to ease growing concerns about the deep European budget crisis that has sent the euro and share prices plummeting.Telling the International Monetary Fund to keep its distance, G7 ministers said that there would be a ' European' solution to the problems affecting Greece.European Central Bank president Jean-Claude Trichet said he was ' confident that Greece would meet tougher new belttightening targets'.Greece's budget deficit has mushroomed to almost13% of its national economy. And its debt has kept growing, threatening the economic stability of the entire euro zone.Greek finance minister George Papaconstantinou said yesterday: 'Greece will stick to its deficit-cutting plan. The first three months of the year will be crucial for regaining investors and EU confidence.'
Friday, 5 February 2010
Plunging euro drags sterling to 8-month low amid fears of debt default and concern over UK's ragged public finances
Daily Mail
"Sterling fell to an eight-and-a-half month low against the dollar today as concerns over euro zone sovereign debt problems grew.Worries about public sector debt extended beyond Greece to Portugal and Spain, hitting riskier assets, with sterling falling in tandem with the euro against the dollar.Concern over Britain's public finances, and political uncertainty ahead of a general election due by June also weighed on sterling sentiment - even though the two currencies are separate fluctuate in value against one another."
"Sterling fell to an eight-and-a-half month low against the dollar today as concerns over euro zone sovereign debt problems grew.Worries about public sector debt extended beyond Greece to Portugal and Spain, hitting riskier assets, with sterling falling in tandem with the euro against the dollar.Concern over Britain's public finances, and political uncertainty ahead of a general election due by June also weighed on sterling sentiment - even though the two currencies are separate fluctuate in value against one another."
Stock markets plunge over Europe debt fears
The Times
"European and American stock markets plunged yesterday as investors took fright over the difficulties in debt-ridden countries such as Greece and Portugal and fears mounted over the health of the world’s biggest economy.There were concerns that Greece may not meet its tough budget plans as workers started the first in a wave of strikes, prompting worries that Spain, Portugal and the Irish Republic may also struggle to cut their soaring debts. In a sign of the scale of the problems, a gauge of the perceived credit risk of Western European nations overtook that of the most stable US companies for the first time. ...This came as the Monetary Policy Committee (MPC) of the Bank of England voted to call a halt to quantitative easing, saying it was expecting “gradual growth” in the UK economy. However, it gave warning that repairing the UK’s public finances would weigh on consumer spending. There were stinging losses on Spanish and Portuguese stock markets...."
"European and American stock markets plunged yesterday as investors took fright over the difficulties in debt-ridden countries such as Greece and Portugal and fears mounted over the health of the world’s biggest economy.There were concerns that Greece may not meet its tough budget plans as workers started the first in a wave of strikes, prompting worries that Spain, Portugal and the Irish Republic may also struggle to cut their soaring debts. In a sign of the scale of the problems, a gauge of the perceived credit risk of Western European nations overtook that of the most stable US companies for the first time. ...This came as the Monetary Policy Committee (MPC) of the Bank of England voted to call a halt to quantitative easing, saying it was expecting “gradual growth” in the UK economy. However, it gave warning that repairing the UK’s public finances would weigh on consumer spending. There were stinging losses on Spanish and Portuguese stock markets...."
Thursday, 4 February 2010
European economy panic leads to euro tumble and jolt in stock market
Daily Mail
"Fears that the European economy is teetering on the brink of a new economic crisis sent the euro tumbling and jolted stock markets lower today.The FTSE 100 slumped 113 points to 5139 points, the lowest level since November 2009.The single currency plummeted to its weakest since June amid concerns that the budgetary woes faced by Greece would are being mirrored in the debt-laden economies of Portugal and Spain."
"Fears that the European economy is teetering on the brink of a new economic crisis sent the euro tumbling and jolted stock markets lower today.The FTSE 100 slumped 113 points to 5139 points, the lowest level since November 2009.The single currency plummeted to its weakest since June amid concerns that the budgetary woes faced by Greece would are being mirrored in the debt-laden economies of Portugal and Spain."
But not yet...
Burning Our Money
"Everybody now agrees that public spending has to be cut significantly. But not everyone agrees on when. And despite what we may sometimes suggest on BOM, not everyone who says we can put it off is an out-and-out scoundrel."
End money printing today
John Redwood
"Will the MPC make honest people of us at last? With inflation well over 3% and rising it is high time they said “No” to more easy money for a government awash with too much debt and wasting far too much money. They should grasp that recovery requires a private sector, export and savings led recovery. That in turn requires a government spending sensibly and gaining us some better value for money..."
"Will the MPC make honest people of us at last? With inflation well over 3% and rising it is high time they said “No” to more easy money for a government awash with too much debt and wasting far too much money. They should grasp that recovery requires a private sector, export and savings led recovery. That in turn requires a government spending sensibly and gaining us some better value for money..."
Wednesday, 3 February 2010
Tories will need emergency Budget for Britain to avoid the risk of a Greek mess
Telegraph
"..But while Osborne was mainly trying to allay the market’s fears there was also something in his speech for ordinary voters in the promise to “Get Britain working”. Similarly, private-sector employers were cheered by his entreaty to “improve Britain’s international rankings for tax competitiveness and business regulation”.So the Tories have got step one right in delivering the correct messages on economic reform – mixed messages but ones consistent with recovery. But if Osborne is to carry the support of business leaders, such as the seven who publicly backed him yesterday, then he must get step two right, which is delivery.That needs to start with the emergency Budget 50 days after an election. If he fails he will be quickly found out – not just by the business leaders backing him at the moment, but by the markets and with disastrous consequences for Britain."
"..But while Osborne was mainly trying to allay the market’s fears there was also something in his speech for ordinary voters in the promise to “Get Britain working”. Similarly, private-sector employers were cheered by his entreaty to “improve Britain’s international rankings for tax competitiveness and business regulation”.So the Tories have got step one right in delivering the correct messages on economic reform – mixed messages but ones consistent with recovery. But if Osborne is to carry the support of business leaders, such as the seven who publicly backed him yesterday, then he must get step two right, which is delivery.That needs to start with the emergency Budget 50 days after an election. If he fails he will be quickly found out – not just by the business leaders backing him at the moment, but by the markets and with disastrous consequences for Britain."
Greece under EU protectorate as funds shift fire to Portugal
Telegraph
"The European Commission has ordered Greece to slash public spending and spell out details of its austerity plan within "one month", invoking sweeping new EU Treaty powers to impose a radical shake-up of the Greek economy."
"The European Commission has ordered Greece to slash public spending and spell out details of its austerity plan within "one month", invoking sweeping new EU Treaty powers to impose a radical shake-up of the Greek economy."
Greece rattled by 'hidden debt' controversy
Telegraph
"Greek debt markets have come under fresh assault from hot money funds after a commission of experts in Athens told the country's parliament that it had uncovered €40bn (£35bn) of "hidden debts" during an investigation into past manipulation by the financial authorities."
"Greek debt markets have come under fresh assault from hot money funds after a commission of experts in Athens told the country's parliament that it had uncovered €40bn (£35bn) of "hidden debts" during an investigation into past manipulation by the financial authorities."
Greece to face European Commission economic scrutiny
BBC
"Greece will face the most stringent monitoring of any European Union country as it attempts to balance its finances over the next few years.The news came as the European Commission confirmed its support of Greece's plans to reduce its deficit.EU economic commissioner JoaquÃn Almunia also launched an infringement procedure to ensure Greek authorities report reliable budgetary statistics.Greece's deficit is more than four times higher than eurozone rules allow".
"Greece will face the most stringent monitoring of any European Union country as it attempts to balance its finances over the next few years.The news came as the European Commission confirmed its support of Greece's plans to reduce its deficit.EU economic commissioner JoaquÃn Almunia also launched an infringement procedure to ensure Greek authorities report reliable budgetary statistics.Greece's deficit is more than four times higher than eurozone rules allow".
Tuesday, 2 February 2010
The only economic advice the Tories need - cut spending
Telegraph
"If Cameron refuses to tackle government debt, the consequences for Britain will be disastrous,.....We spend roughly two-thirds of a trillion pounds a year in the public sector now. The annual deficit is conservatively estimated at £178 billion (we should prepare to believe that when we see it, by the way). Our total debt, including pension liabilities, is estimated at around £2.2 trillion. A cut of £1 billion is therefore not an economic policy. ...I know there is an institutional resistance in the party to understanding economics – the way they used to bandy about the idiotic phrase "market failure" proved that beyond doubt – but Messrs Cameron and Osborne need to get serious. Failure to cut our debt quickly will lead to the loss of our triple-A rating, the collapse of sterling and higher interest rates – much higher. Some yields on gilts at the long end are already 7 per cent. That really is à la Grecque. That in turn would lead to a choice between inflation or a collapse in the housing market, and companies being crushed by debt before they could get back off the ground again. As Labour found in 1976, if a government won't take the right course, in the end the markets will make it do so."
"If Cameron refuses to tackle government debt, the consequences for Britain will be disastrous,.....We spend roughly two-thirds of a trillion pounds a year in the public sector now. The annual deficit is conservatively estimated at £178 billion (we should prepare to believe that when we see it, by the way). Our total debt, including pension liabilities, is estimated at around £2.2 trillion. A cut of £1 billion is therefore not an economic policy. ...I know there is an institutional resistance in the party to understanding economics – the way they used to bandy about the idiotic phrase "market failure" proved that beyond doubt – but Messrs Cameron and Osborne need to get serious. Failure to cut our debt quickly will lead to the loss of our triple-A rating, the collapse of sterling and higher interest rates – much higher. Some yields on gilts at the long end are already 7 per cent. That really is à la Grecque. That in turn would lead to a choice between inflation or a collapse in the housing market, and companies being crushed by debt before they could get back off the ground again. As Labour found in 1976, if a government won't take the right course, in the end the markets will make it do so."
Incidents of identity theft up by 32pc
Telegraph
"CIFAS has seen a 31pc rise in the number of victims of this type of identity fraud along with a rise in many other types of financial crime which has been blamed on the economic downturn.Peter Hurst, chief executive of CIFAS, said: ‘It is well-known that a rise in fraud goes hand in hand with a recession. Fraudsters adapt their methods in response to changes in the economy, finding and exploiting any area of weakness.’
"CIFAS has seen a 31pc rise in the number of victims of this type of identity fraud along with a rise in many other types of financial crime which has been blamed on the economic downturn.Peter Hurst, chief executive of CIFAS, said: ‘It is well-known that a rise in fraud goes hand in hand with a recession. Fraudsters adapt their methods in response to changes in the economy, finding and exploiting any area of weakness.’
Australian central bank shocks markets by halting series of rate rises
Telegraph
"Traders were shocked by the decision, with heavy selling of the Australian dollar and buying of government bonds after the decision. The Bank indicated that future rate rises will depend on whether they're needed to keep inflation within its 2pc to 3pc target."
"Traders were shocked by the decision, with heavy selling of the Australian dollar and buying of government bonds after the decision. The Bank indicated that future rate rises will depend on whether they're needed to keep inflation within its 2pc to 3pc target."
Monday, 1 February 2010
Barack Obama forecasts record US deficit of almost £1 trillion
Telegraph
"President Barack Obama on Monday forecast a record budget deficit of $1.56 trillion (£975 billion) for 2010 – worse even than the White House's prediction made just a week ago – as red ink threatened to submerge his leadership and reforms such as health care. .."
"President Barack Obama on Monday forecast a record budget deficit of $1.56 trillion (£975 billion) for 2010 – worse even than the White House's prediction made just a week ago – as red ink threatened to submerge his leadership and reforms such as health care. .."
A weakening recovery poses the real threat of a double-dip recession
Telegraph
"....Third, our public finances are in the worst state of just about any large developed country. After the election there has to be a tightening, which will involve higher taxes and cuts to public expenditure. This may well be necessary, but let us not kid ourselves that it won't reduce the growth of aggregate demand. "
"....Third, our public finances are in the worst state of just about any large developed country. After the election there has to be a tightening, which will involve higher taxes and cuts to public expenditure. This may well be necessary, but let us not kid ourselves that it won't reduce the growth of aggregate demand. "
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