Daily Mail
"Hopes of a swift economic recovery in Britain have been dampened after unemployment in the eurozone rose to 10 per cent in February - the highest level for more than a decade.The jobless rate was up from 8.8 per cent a year earlier, adding to signs of faltering economic performance in continental Europe, the UK's biggest export market.Euro area unemployment is at its highest since August 1998, with Spain's 19 per cent jobless rate the most alarming."
Wednesday, 31 March 2010
Brown gets ticking off from statistics chief over mis-use of immigration figures in podcast
Daily Mail
"Gordon Brown was today accused of misleading the British people over immigration after the head of the national statistics watchdog criticised him for mis-using statistics.UK Statistics Authority chair Sir Michael Scholar delivered a stinging rebuke to the Prime Minister as he accused him of using data that was 'not comparable' in a podcast which sparked protests from opposition parties last week."
"Gordon Brown was today accused of misleading the British people over immigration after the head of the national statistics watchdog criticised him for mis-using statistics.UK Statistics Authority chair Sir Michael Scholar delivered a stinging rebuke to the Prime Minister as he accused him of using data that was 'not comparable' in a podcast which sparked protests from opposition parties last week."
Monday, 29 March 2010
It's official: vote Labour, get a downgrade
Telegraph
"However, the news from later this morning that Standard & Poors have reiterated their “outlook negative” warning on the UK is far more destabilising for Darling. In short, the now more or less official verdict from S&P and hence the investment community is that if the British people vote for a Labour Government, they are voting for a downgrade in Britain’s credit rating. Simple as that."
"However, the news from later this morning that Standard & Poors have reiterated their “outlook negative” warning on the UK is far more destabilising for Darling. In short, the now more or less official verdict from S&P and hence the investment community is that if the British people vote for a Labour Government, they are voting for a downgrade in Britain’s credit rating. Simple as that."
Saturday, 27 March 2010
The day Gordon Brown settled our fate
Telegraph
"By 1997, public spending stood at £322 billion. After Mr Brown's 1998 Comprehensive Spending Review, it was projected that it might almost double, over 10 years, to more than £600 billion. So it turned out. The public sector exploded in every direction, as these additional hundreds of billions began flooding into health, education, social benefits – and into the inflated salaries and pensions of our new lords of local government. ...And now we begin to see the consequences. As public spending rises this year to £661 billion, more than a quarter of it is having to be borrowed, giving us a larger public sector deficit than Greece, the country having to be bailed out by the IMF.
The overspend is so colossal that the Government itself predicts that in just four years' time our national debt will have doubled, to £1.4 trillion – equal to our present annual national output. And if our international credit rating is downgraded, as seems very possible, we will have to pay even more to borrow the money. According to the Institute for Fiscal Studies, we may soon be shelling out some £74 billion a year – £60 a week from every household in the land – not to reduce our debt, but simply to pay the interest."
"By 1997, public spending stood at £322 billion. After Mr Brown's 1998 Comprehensive Spending Review, it was projected that it might almost double, over 10 years, to more than £600 billion. So it turned out. The public sector exploded in every direction, as these additional hundreds of billions began flooding into health, education, social benefits – and into the inflated salaries and pensions of our new lords of local government. ...And now we begin to see the consequences. As public spending rises this year to £661 billion, more than a quarter of it is having to be borrowed, giving us a larger public sector deficit than Greece, the country having to be bailed out by the IMF.
The overspend is so colossal that the Government itself predicts that in just four years' time our national debt will have doubled, to £1.4 trillion – equal to our present annual national output. And if our international credit rating is downgraded, as seems very possible, we will have to pay even more to borrow the money. According to the Institute for Fiscal Studies, we may soon be shelling out some £74 billion a year – £60 a week from every household in the land – not to reduce our debt, but simply to pay the interest."
Alistair Darling and His Genius Debt Dodge
WSJ
"Fraser Nelson has long said that one of the biggest problems with the debate around Britain’s battered public finances is that too many people confuse the deficit (the gap between revenue and expenditure) and the total national debt. He’s right. One now hears the two terms used interchangeably.
The Chancellor and the Dark Lord (Mandelson) realise why this is important and are cleverly spinning accordingly.
The government has a plan to “halve the deficit” in the next parliament. When ministers, such as Liam Byrne and Mandelson, emphasise this endlessly they want voters to hear it as debt somehow being halved. But it’s no such thing. Ministers only aim, on rather heroic growth assumptions, to half the size of the annual gap between income and expenditure in four years.
They never mention the national debt. And no wonder. It’s going to go through the roof.
The Treasury projections on debt are horrific. By 2014-15 it will hit more than £1.4 trillion. As of February, public-sector net debt was sitting at £848.5 billion. So it’s going to almost double again.
The amount the government pays in debt interest payments then becomes such a large chunk of tax receipts that it represents a vast waste of national resources. Those payments could easily come close to £100 billion each year by the middle of the decade if there is any increase in interest rates. This is more than the likely annual education budget, just on paying the interest on the debt.
The Tories seem trapped and don’t sound very clear (Cameron’s punchy budget response being the exception). Sometimes they talk about the deficit (which few voters will understand in its proper sense) and claim it’ll come down a bit faster on their watch if they win. On other occasions they point and say: Look at the enormous debt, isn’t that scary!
Meanwhile, Labour sticks calmly to spinning its line of halving the deficit — and the effect is like an anaesthetic being administered to voters. Labour hopes the patient, the electorate, doesn’t wake up to this between now and the election. The debt dodge is a smart wheeze. And it is now central to Labour’s emerging electoral strategy of offering supposed reassurance in contrast with alleged Tory risk.
Ed: article reproduced in full due to its importance.
"Fraser Nelson has long said that one of the biggest problems with the debate around Britain’s battered public finances is that too many people confuse the deficit (the gap between revenue and expenditure) and the total national debt. He’s right. One now hears the two terms used interchangeably.
The Chancellor and the Dark Lord (Mandelson) realise why this is important and are cleverly spinning accordingly.
The government has a plan to “halve the deficit” in the next parliament. When ministers, such as Liam Byrne and Mandelson, emphasise this endlessly they want voters to hear it as debt somehow being halved. But it’s no such thing. Ministers only aim, on rather heroic growth assumptions, to half the size of the annual gap between income and expenditure in four years.
They never mention the national debt. And no wonder. It’s going to go through the roof.
The Treasury projections on debt are horrific. By 2014-15 it will hit more than £1.4 trillion. As of February, public-sector net debt was sitting at £848.5 billion. So it’s going to almost double again.
The amount the government pays in debt interest payments then becomes such a large chunk of tax receipts that it represents a vast waste of national resources. Those payments could easily come close to £100 billion each year by the middle of the decade if there is any increase in interest rates. This is more than the likely annual education budget, just on paying the interest on the debt.
The Tories seem trapped and don’t sound very clear (Cameron’s punchy budget response being the exception). Sometimes they talk about the deficit (which few voters will understand in its proper sense) and claim it’ll come down a bit faster on their watch if they win. On other occasions they point and say: Look at the enormous debt, isn’t that scary!
Meanwhile, Labour sticks calmly to spinning its line of halving the deficit — and the effect is like an anaesthetic being administered to voters. Labour hopes the patient, the electorate, doesn’t wake up to this between now and the election. The debt dodge is a smart wheeze. And it is now central to Labour’s emerging electoral strategy of offering supposed reassurance in contrast with alleged Tory risk.
Ed: article reproduced in full due to its importance.
Greek deal wins muted approval
Reuters
"BRUSSELS (Reuters) - Euro zone leaders won muted approval from financial markets on Friday for a "band aid" agreement to create a safety net for debt-ridden Greece, but a row over the IMF's role flared up just as it had seemed settled.Central bankers played down the likelihood that Athens, which is struggling to cut a giant budget deficit, would ever need hard cash from European governments and the International Monetary Fund to avoid defaulting on its debt.But the day after the leaders hammered out their deal in Brussels, the plan remained short on details and the IMF had yet to make any public comment on its role, which Berlin had demanded due to German public hostility to bailing out Athens.One prominent European Central Bank policymaker said he remained against the Fund's involvement. ...."
"BRUSSELS (Reuters) - Euro zone leaders won muted approval from financial markets on Friday for a "band aid" agreement to create a safety net for debt-ridden Greece, but a row over the IMF's role flared up just as it had seemed settled.Central bankers played down the likelihood that Athens, which is struggling to cut a giant budget deficit, would ever need hard cash from European governments and the International Monetary Fund to avoid defaulting on its debt.But the day after the leaders hammered out their deal in Brussels, the plan remained short on details and the IMF had yet to make any public comment on its role, which Berlin had demanded due to German public hostility to bailing out Athens.One prominent European Central Bank policymaker said he remained against the Fund's involvement. ...."
Thursday, 25 March 2010
Budget: Cuts of more than 25% in Whitehall needed to fill £46bn black hole in Darling's figures
Daily Mail
"Government departments could have their budgets slashed by more than a quarter after the election to plug a multi-billion black hole in Alistair Darling's figures, a leading think-tank warned today.The Institute of Fiscal Studies said Whitehall departments will have to find savings of £25billion over the next two years, almost doubling to £46billion by 2014-15, to make the Chancellor's numbers add up.Because Labour has pledged to ring fence front-line spending for schools, the NHS and overseas aid, larger savings will have to be made in other departments.Carl Emmerson of the IFS warned the rest will have to find savings of 14 per cent by 2012-13. If the ring-fencing goes on beyond that, this figures would almost double to 25.4 per cent by 2014-15.'This next spending settlement is set to be very tight for areas such as higher education, transport and housing,' he said."
"Government departments could have their budgets slashed by more than a quarter after the election to plug a multi-billion black hole in Alistair Darling's figures, a leading think-tank warned today.The Institute of Fiscal Studies said Whitehall departments will have to find savings of £25billion over the next two years, almost doubling to £46billion by 2014-15, to make the Chancellor's numbers add up.Because Labour has pledged to ring fence front-line spending for schools, the NHS and overseas aid, larger savings will have to be made in other departments.Carl Emmerson of the IFS warned the rest will have to find savings of 14 per cent by 2012-13. If the ring-fencing goes on beyond that, this figures would almost double to 25.4 per cent by 2014-15.'This next spending settlement is set to be very tight for areas such as higher education, transport and housing,' he said."
Euro zone to back Greek safety net with IMF role
Reuters
"BRUSSELS (Reuters) - The leaders of Germany and France clinched agreement on a joint European-IMF financial safety net for debt-stricken Greece just before an EU summit on Thursday, the French president's office said. ......Under the arrangement, euro zone countries would provide the majority of any funding for Greece, with rigorous conditions set by the European Commission and the ECB, and the International Monetary Fund would contribute money and expertise."
"BRUSSELS (Reuters) - The leaders of Germany and France clinched agreement on a joint European-IMF financial safety net for debt-stricken Greece just before an EU summit on Thursday, the French president's office said. ......Under the arrangement, euro zone countries would provide the majority of any funding for Greece, with rigorous conditions set by the European Commission and the ECB, and the International Monetary Fund would contribute money and expertise."
Labour's pre-election budget fails to woo voters
Reuters
"LONDON (Reuters) - Many voters in London were unimpressed by the Chancellor's budget on Wednesday, the ruling Labour party's last attempt to convince voters ahead of an election that it can reduce the country's mountain of debt.Trailing in polls against the main rival Conservative Party ahead of a vote expected on May 6, many voters did not expect Labour to extend its 13 years in power."The budget is quite irrelevant really. There will be another government after May 6. I don't think the people trust them," said John Keary, who works in a law firm."
"LONDON (Reuters) - Many voters in London were unimpressed by the Chancellor's budget on Wednesday, the ruling Labour party's last attempt to convince voters ahead of an election that it can reduce the country's mountain of debt.Trailing in polls against the main rival Conservative Party ahead of a vote expected on May 6, many voters did not expect Labour to extend its 13 years in power."The budget is quite irrelevant really. There will be another government after May 6. I don't think the people trust them," said John Keary, who works in a law firm."
Budget 2010: City's verdict was swift and damning
Telegraph
"No sooner had Alistair Darling sat down shortly after lunchtime than the gilt market suddenly crumpled. Investors around the world started selling British government bonds, pulling their money out of the country as fast as possible. As markets closed last night, the stampede was continuing. ....Yesterday was a seminal point: the moment at which investors signalled that they had lost faith in Labour. That even an unusually honest, slightly more sensible Budget was simply not good enough. The rest of Britain will have to wait a couple of months before going to the polls, but investors have already cast their vote."
"No sooner had Alistair Darling sat down shortly after lunchtime than the gilt market suddenly crumpled. Investors around the world started selling British government bonds, pulling their money out of the country as fast as possible. As markets closed last night, the stampede was continuing. ....Yesterday was a seminal point: the moment at which investors signalled that they had lost faith in Labour. That even an unusually honest, slightly more sensible Budget was simply not good enough. The rest of Britain will have to wait a couple of months before going to the polls, but investors have already cast their vote."
'Turn out the lights and don't get sick': Darling ridiculed over £11bn efficiency savings... but he won't cut a single public sector job
Daily Mail
* Darling denies hiding tax hike for millions
* Doubt grows over £11bn 'efficiency savings'
* Chancellor stands by 'rosy' economic forecast
Alistair Darling today stood by his 'wildly optimistic' economic forecasts as he dismissed calls to slash public spending and denied hiding a tax hike for millions in his Budget speech.In his final Budget before the election, the Chancellor refused to start belt-tightening this year - counting on his forecasts of a return to growth to help repay an unprecedented national debt.As his many of his measures were dismissed as cheap electioneering, Mr Darling asked voters to believe the route to recovery lies in a £15billion stealth tax raid on middle earners and yet more cash for public services.Mr Darling failed to spell out that millions will be hit by frozen income tax allowances next month and a 1p rise in National Insurance next year, but said it was only fair that those who have done well in Labour's boom years now helped to balance the books.And he faced incredulity after suggesting Government departments could make 'efficiency savings' of £11billion - without cutting a single job - but by taking measures such as turning off the lights in Government buildings. ...."
* Darling denies hiding tax hike for millions
* Doubt grows over £11bn 'efficiency savings'
* Chancellor stands by 'rosy' economic forecast
Alistair Darling today stood by his 'wildly optimistic' economic forecasts as he dismissed calls to slash public spending and denied hiding a tax hike for millions in his Budget speech.In his final Budget before the election, the Chancellor refused to start belt-tightening this year - counting on his forecasts of a return to growth to help repay an unprecedented national debt.As his many of his measures were dismissed as cheap electioneering, Mr Darling asked voters to believe the route to recovery lies in a £15billion stealth tax raid on middle earners and yet more cash for public services.Mr Darling failed to spell out that millions will be hit by frozen income tax allowances next month and a 1p rise in National Insurance next year, but said it was only fair that those who have done well in Labour's boom years now helped to balance the books.And he faced incredulity after suggesting Government departments could make 'efficiency savings' of £11billion - without cutting a single job - but by taking measures such as turning off the lights in Government buildings. ...."
Wednesday, 24 March 2010
The phoney Budget
Dr Eamonn Butler
"Whatever the Chancellor says today, everybody knows that this is a phoney Budget. Like the 'phoney war' of late 1914, the true horrors are yet to come. The real, blood and guts, Budget will come at the end of June, after the election is out of the way.
The Chancellor will certainly bask in one ray of sunshine – the economy looks a bit less dire than he predicted last November. Businesses have held on, and tax receipts have held up. Job losses have not spiked, so nor have benefit costs. Inflation is moderate. All that paper – or rather, electronic – money that the Bank of England created has definitely had its effect. So the Chancellor will not have to borrow as much as he feared. He may even have room to toss us a few eye-popping pre-election sweeteners.
But you cannot keep cloning funny money for ever. The pound has already plummeted. And we are also lumbered with a national debt that stands at wartime levels, and is scheduled to increase year upon year upon year, as far as anyone can predict. We have borrowed to pay off yesterday's bills with tomorrow's earnings. The interest payments on our debt mountain will soon be more than the defence budget. if we had not borrowed so much, we could slash income tax by a third – and grow our way out of the financial crisis. ..."
"Whatever the Chancellor says today, everybody knows that this is a phoney Budget. Like the 'phoney war' of late 1914, the true horrors are yet to come. The real, blood and guts, Budget will come at the end of June, after the election is out of the way.
The Chancellor will certainly bask in one ray of sunshine – the economy looks a bit less dire than he predicted last November. Businesses have held on, and tax receipts have held up. Job losses have not spiked, so nor have benefit costs. Inflation is moderate. All that paper – or rather, electronic – money that the Bank of England created has definitely had its effect. So the Chancellor will not have to borrow as much as he feared. He may even have room to toss us a few eye-popping pre-election sweeteners.
But you cannot keep cloning funny money for ever. The pound has already plummeted. And we are also lumbered with a national debt that stands at wartime levels, and is scheduled to increase year upon year upon year, as far as anyone can predict. We have borrowed to pay off yesterday's bills with tomorrow's earnings. The interest payments on our debt mountain will soon be more than the defence budget. if we had not borrowed so much, we could slash income tax by a third – and grow our way out of the financial crisis. ..."
Revealed: the great scandal no one’s noticed
The Times
"So the spending review works. And Mr Brown knows it. Robert Peston’s biography of the former Chancellor tells how Mr Brown is pressed by Bill Clinton’s adviser Sidney Blumenthal to run a budget surplus but rejects the advice because it would make things too easy for the Tories, reducing the political potency of the spending review. And in 2006 he put off the review for another year so that he could announce its results when he first became Prime Minister.
Which means we are due one right now. Right now, I tell you! But are we going to get one? I think not. We will get a Budget, but no proper spending review. And given its political potency, that can only mean one thing. That the Government knows that a spending review would be so painful, so dreadful, that they are prepared to forgo its usual advantages.
It is scandalous to have had a review through all the good years but refuse to have one now. .."
"So the spending review works. And Mr Brown knows it. Robert Peston’s biography of the former Chancellor tells how Mr Brown is pressed by Bill Clinton’s adviser Sidney Blumenthal to run a budget surplus but rejects the advice because it would make things too easy for the Tories, reducing the political potency of the spending review. And in 2006 he put off the review for another year so that he could announce its results when he first became Prime Minister.
Which means we are due one right now. Right now, I tell you! But are we going to get one? I think not. We will get a Budget, but no proper spending review. And given its political potency, that can only mean one thing. That the Government knows that a spending review would be so painful, so dreadful, that they are prepared to forgo its usual advantages.
It is scandalous to have had a review through all the good years but refuse to have one now. .."
Alistair Darling targets the rich in pre-election Budget
The Times
"Alistair Darling unveiled a nakedly political pre-election Budget today, hoping to use one-off taxes on the rich to delay inevitable cuts in public services until well into what would be Labour's fourth term in office.With barely six weeks to go before an election widely expected on May 6, the Chancellor was unable to conjure up a classic Budget giveaway for voters, his hands tied by record levels of public sector borrowing."
"Alistair Darling unveiled a nakedly political pre-election Budget today, hoping to use one-off taxes on the rich to delay inevitable cuts in public services until well into what would be Labour's fourth term in office.With barely six weeks to go before an election widely expected on May 6, the Chancellor was unable to conjure up a classic Budget giveaway for voters, his hands tied by record levels of public sector borrowing."
Darling cuts debt forecast, sets election stage
Reuters
"LONDON (Reuters) - The Labour government set the stage on Wednesday for a looming election with a budget that promised a 2.5 billion pounds package to boost growth, higher taxes for the well-off and lower borrowing than predicted only three months ago.Given a record deficit has spooked markets and threatened the country's debt rating, big giveaways were off the agenda but chancellor Alistair Darling still found some concessions like cutting house purchase duty for first-time buyers and laid claim to an economic recovery he said his Conservative opponents would crush. .....After Darling's address, bookmakers were still predicting that this will have been his last budget speech and shadow chancellor George Osborne will be making the next one."
"LONDON (Reuters) - The Labour government set the stage on Wednesday for a looming election with a budget that promised a 2.5 billion pounds package to boost growth, higher taxes for the well-off and lower borrowing than predicted only three months ago.Given a record deficit has spooked markets and threatened the country's debt rating, big giveaways were off the agenda but chancellor Alistair Darling still found some concessions like cutting house purchase duty for first-time buyers and laid claim to an economic recovery he said his Conservative opponents would crush. .....After Darling's address, bookmakers were still predicting that this will have been his last budget speech and shadow chancellor George Osborne will be making the next one."
The big lie at the heart of Darling's class war Budget: Stamp duty hike for £1m homes will NOT pay for first-time buyers' holiday '
Daily Mail
# Stamp duty scrapped on homes up to £250,000
# But those buying homes worth £1m or more hit by 5 per cent levy
# Inheritance tax threshold held at £325,000 for four years
# Darling ignores warnings with another £2.5bn stimulus package
# Public sector net debt to reach 54% of GDP this year
# 60% of tax rises paid for by top 5% of earners since start of global crisis
# £20bn in public sector cuts from 2011 but no detail
# Retailers furious at secret 2.2% rise in minimum wage
# Duty on beer, wine and spirits rises 2% - cider rises 10% above inflation
# Fuel duty rises staggered through until next January
# Markets unimpressed and sterling falls to two-week low against dollar
# Stamp duty scrapped on homes up to £250,000
# But those buying homes worth £1m or more hit by 5 per cent levy
# Inheritance tax threshold held at £325,000 for four years
# Darling ignores warnings with another £2.5bn stimulus package
# Public sector net debt to reach 54% of GDP this year
# 60% of tax rises paid for by top 5% of earners since start of global crisis
# £20bn in public sector cuts from 2011 but no detail
# Retailers furious at secret 2.2% rise in minimum wage
# Duty on beer, wine and spirits rises 2% - cider rises 10% above inflation
# Fuel duty rises staggered through until next January
# Markets unimpressed and sterling falls to two-week low against dollar
Budget 2010: growth and borrowing figures 'too optimistic'
Telegraph
"Britain's national debt will rise to a record £1.4 trillion even after Alistair Darling promised to reduce his borrowing plans. "
Tuesday, 23 March 2010
Public sector now 53% of economy as record 6.09million Britons work for the state
Daily Mail
"The public sector has ballooned under Labour to make up more than half of the economy.State spending now accounts for 53.4 per cent of gross domestic product (GDP) compared to 40 per cent when Labour came to power in 1997.Britain's public sector is now bigger than the European Union average of 50.4 per cent, according to the Organisation for Economic Co-operation and Development figures."
Monday, 22 March 2010
Greece accuses Germany of 'squalid game' in debt crisis
Telegraph
"Greece has further complicated its chances of an EU rescue package this week, accusing Germany of exploiting the debt crisis to enrich its banks and drive down the euro for global export advantage. "
"Greece has further complicated its chances of an EU rescue package this week, accusing Germany of exploiting the debt crisis to enrich its banks and drive down the euro for global export advantage. "
Saturday, 20 March 2010
Alistair Darling mustn't blow his fantasy windfall
Daily Mail
"For Chancellor Alistair Darling, these long-awaited green shoots could hardly have come at a more opportune moment, as he prepares for next Wednesday's last Budget before the election.Indeed, the respected Institute for Fiscal Studies estimates he will be better off by some £12billion than he expected only last December.But let's get one thing straight: whatever the figure may be, this is most emphatically NOT 'spare' cash, piling up in the Treasury coffers and waiting to be spent however the Chancellor chooses.It's money the Government doesn't have - and the country can't afford - which Mr Darling had resigned himself to having to borrow.The bitter truth is that even if the wildest optimists prove correct, we'll still be left with the most catastrophic deficit in our history.Tens of billions of it are 'structural' - built into the system after 13 years of Labour's wanton mishandling of the public finances - which means that without painful cuts, we'll be stuck with it even after a full recovery.Disgracefully, however, many are urging Mr Darling to go ahead and squander his fantasy 'windfall' on pre-election bribes."
"For Chancellor Alistair Darling, these long-awaited green shoots could hardly have come at a more opportune moment, as he prepares for next Wednesday's last Budget before the election.Indeed, the respected Institute for Fiscal Studies estimates he will be better off by some £12billion than he expected only last December.But let's get one thing straight: whatever the figure may be, this is most emphatically NOT 'spare' cash, piling up in the Treasury coffers and waiting to be spent however the Chancellor chooses.It's money the Government doesn't have - and the country can't afford - which Mr Darling had resigned himself to having to borrow.The bitter truth is that even if the wildest optimists prove correct, we'll still be left with the most catastrophic deficit in our history.Tens of billions of it are 'structural' - built into the system after 13 years of Labour's wanton mishandling of the public finances - which means that without painful cuts, we'll be stuck with it even after a full recovery.Disgracefully, however, many are urging Mr Darling to go ahead and squander his fantasy 'windfall' on pre-election bribes."
Britain is a nation in denial and voters are just as deluded as the PM about the calamitous state the country is in .
Daily Mail
"Gordon Brown led this country into its worst economic predicament since World War II. We have an unprecedented scale of national debt that threatens a sterling crisis and will burden the country for years to come.During 13 years of power, Labour has failed abysmally to reform public services, above all education, or to equip Britain to earn its living in the 21st century.The Government's latest initiative threatens higher education, the country's only hope of creating a skilled workforce to meet the challenges of the next generation.Universities are threatened with more than half a billion pounds' worth of funding cuts. The money is presumably needed to finance more NHS cosmetic surgery, asylum seekers' housing benefit or - most likely - to pay the interest charges on Gordon Brown's horrendous national borrowings.Yet against this background of incompetence, fiscal recklessness and neglect of real priorities, millions of people seem willing to give Gordon Brown another chance. ...There is no easy or pain-free path out of our ghastly economic predicament. Any politician who pretends otherwise is a shyster unfit to govern.Gordon Brown has parted company so decisively that he will never rejoin planet Earth.He wants to be in office, but not in power. He craves the title of prime minister, but rejects any vestige of personal responsibility for the nation's fate in war or peace. He has become a psychological mess of frightening proportions. ....It is time for those who aspire to govern us to dismiss the lies surrounding Britain's sickness and to confront the hard truths about the only credible remedies for them.
"Gordon Brown led this country into its worst economic predicament since World War II. We have an unprecedented scale of national debt that threatens a sterling crisis and will burden the country for years to come.During 13 years of power, Labour has failed abysmally to reform public services, above all education, or to equip Britain to earn its living in the 21st century.The Government's latest initiative threatens higher education, the country's only hope of creating a skilled workforce to meet the challenges of the next generation.Universities are threatened with more than half a billion pounds' worth of funding cuts. The money is presumably needed to finance more NHS cosmetic surgery, asylum seekers' housing benefit or - most likely - to pay the interest charges on Gordon Brown's horrendous national borrowings.Yet against this background of incompetence, fiscal recklessness and neglect of real priorities, millions of people seem willing to give Gordon Brown another chance. ...There is no easy or pain-free path out of our ghastly economic predicament. Any politician who pretends otherwise is a shyster unfit to govern.Gordon Brown has parted company so decisively that he will never rejoin planet Earth.He wants to be in office, but not in power. He craves the title of prime minister, but rejects any vestige of personal responsibility for the nation's fate in war or peace. He has become a psychological mess of frightening proportions. ....It is time for those who aspire to govern us to dismiss the lies surrounding Britain's sickness and to confront the hard truths about the only credible remedies for them.
Alistair Darling's budget la-la land
Telegraph
"Telegraph columnist Liam Halligan tells Robert Miller that Budget tax rises are inevitable after the election. " (video)
"Telegraph columnist Liam Halligan tells Robert Miller that Budget tax rises are inevitable after the election. " (video)
Petrol prices soar
Reuters
"LONDON (Reuters) - The average petrol price has risen by 4 pence per litre in the past month to mid-March and may hit a record high in April, the AA said on Friday.The cost of petrol has risen to 1.1609 pound per litre from 1.1210 in mid-February. Diesel rose to 1.1687 pound a litre, up from 1.1384 a month ago."Soaring wholesale prices, an increase in duty on 1 April and the end of the subsidy for biofuel producers could push the cost of petrol close to 124 pence a litre just after Easter," the AA said in a statement.That would be above the record high price of 1.1197 pound hit in July 2008, it said."!
"LONDON (Reuters) - The average petrol price has risen by 4 pence per litre in the past month to mid-March and may hit a record high in April, the AA said on Friday.The cost of petrol has risen to 1.1609 pound per litre from 1.1210 in mid-February. Diesel rose to 1.1687 pound a litre, up from 1.1384 a month ago."Soaring wholesale prices, an increase in duty on 1 April and the end of the subsidy for biofuel producers could push the cost of petrol close to 124 pence a litre just after Easter," the AA said in a statement.That would be above the record high price of 1.1197 pound hit in July 2008, it said."!
Friday, 19 March 2010
Markets spooked as Greek rescue plan crumbles
Telegraph
"Europe’s rescue plan for Greece appears to be crumbling after the country threatened to call in the International Monetary Fund unless Brussels comes up with real money on acceptable terms within a week. "
"Europe’s rescue plan for Greece appears to be crumbling after the country threatened to call in the International Monetary Fund unless Brussels comes up with real money on acceptable terms within a week. "
Thursday, 18 March 2010
The phoney budget
Reuters
"The March 2010 Budget, to be held next Wednesday, will inevitably be highly political as it is effectively the starting gun for the general election campaign. In this context, further significant fiscal measures to tackle the 178 billion pound government deficit will almost certainly be postponed.
Whatever the political colour (or colours) of the next Government, tough decisions will need to be taken in a second Budget within months of the general election. Individual taxpayers and businesses should steel themselves for a frustrating period of uncertainty as party politics overshadow the uncomfortable fiscal imperative to raise significant additional tax revenues as a contribution, alongside significant public spending cuts, to curb the unsustainable fiscal deficit.
In the wake of the credit quake we have seen a 42 billion pounds fall in tax collections. This leaves the Chancellor very little room for any tax cuts to curry favour with voters but, equally, he dare not raise taxes significantly in a Budget held only a few weeks before a general election. We can expect a ‘Phoney Budget’ on 24th March with any hard hitting, significant tax raising measures deferred until the second 2010 Budget."
"The March 2010 Budget, to be held next Wednesday, will inevitably be highly political as it is effectively the starting gun for the general election campaign. In this context, further significant fiscal measures to tackle the 178 billion pound government deficit will almost certainly be postponed.
Whatever the political colour (or colours) of the next Government, tough decisions will need to be taken in a second Budget within months of the general election. Individual taxpayers and businesses should steel themselves for a frustrating period of uncertainty as party politics overshadow the uncomfortable fiscal imperative to raise significant additional tax revenues as a contribution, alongside significant public spending cuts, to curb the unsustainable fiscal deficit.
In the wake of the credit quake we have seen a 42 billion pounds fall in tax collections. This leaves the Chancellor very little room for any tax cuts to curry favour with voters but, equally, he dare not raise taxes significantly in a Budget held only a few weeks before a general election. We can expect a ‘Phoney Budget’ on 24th March with any hard hitting, significant tax raising measures deferred until the second 2010 Budget."
EU faces high-stakes ultimatum on aid for Greece
Reuters
"BRUSSELS (Reuters) - Greece has made what amounts to an ultimatum to the European Union to come up with a clear offer of standby loans next week or face the embarrassment of Athens asking the International Monetary Fund for help.Greece has long held out the prospect of seeking IMF help to put pressure on the EU, but Prime Minister George Papandreou raised the stakes on Thursday by calling for a firm pledge of financial support at an EU summit in Brussels on March 25-26.His appeal is designed to force EU leaders, and particularly German Chancellor Angela Merkel, to rally behind Greece after EU finance ministers offered only a vague plan for a standby safety net this week. But success is far from certain for Athens. ..."
"BRUSSELS (Reuters) - Greece has made what amounts to an ultimatum to the European Union to come up with a clear offer of standby loans next week or face the embarrassment of Athens asking the International Monetary Fund for help.Greece has long held out the prospect of seeking IMF help to put pressure on the EU, but Prime Minister George Papandreou raised the stakes on Thursday by calling for a firm pledge of financial support at an EU summit in Brussels on March 25-26.His appeal is designed to force EU leaders, and particularly German Chancellor Angela Merkel, to rally behind Greece after EU finance ministers offered only a vague plan for a standby safety net this week. But success is far from certain for Athens. ..."
Wednesday, 17 March 2010
How about a Budget with a bit of honesty?
Telegraph
"This is what the Chancellor should say in his Budget speech next week, says Edmund Conway. ..."
"This is what the Chancellor should say in his Budget speech next week, says Edmund Conway. ..."
Royal Navy attack submarine sent to Falklands as British drillers 'get close to oil'
Daily Mail
"A Royal Navy attack submarine has been sent to the Falkands to boost security as speculation mounts that drillers have found oil there, it was revealed today."
"A Royal Navy attack submarine has been sent to the Falkands to boost security as speculation mounts that drillers have found oil there, it was revealed today."
Tuesday, 16 March 2010
Britain rejects EC call to cut deficit faster
Telegraph
""We think the EU has got the judgment wrong," Liam Byrne, Treasury Chief Secretary, told BBC radio on Tuesday."We think the plan that they've set out would require us to take something like £20bn more out of the economy by 2014-15 and we think that would do irreparable damage to public services or to taxpayers." ...The Conservatives, whose lead in the polls has slipped in recent weeks, seized on the EU report. They have promised to take quicker action on tackling the deficit than either the Labour government or the Liberal Democrat party and have warned that Britain's triple-A credit rating was under threat because of government profligacy."What has to be done now is to get this debt rapidly under control and get the bulk of the structural deficit, get rid of it during the next parliament and I also think one needs to start now," said Conservative business spokesman Ken Clarke."
""We think the EU has got the judgment wrong," Liam Byrne, Treasury Chief Secretary, told BBC radio on Tuesday."We think the plan that they've set out would require us to take something like £20bn more out of the economy by 2014-15 and we think that would do irreparable damage to public services or to taxpayers." ...The Conservatives, whose lead in the polls has slipped in recent weeks, seized on the EU report. They have promised to take quicker action on tackling the deficit than either the Labour government or the Liberal Democrat party and have warned that Britain's triple-A credit rating was under threat because of government profligacy."What has to be done now is to get this debt rapidly under control and get the bulk of the structural deficit, get rid of it during the next parliament and I also think one needs to start now," said Conservative business spokesman Ken Clarke."
Curb your spending, Brussels tells Gordon Brown
The Times
"Gordon Brown was dealt an embarrassing blow last night when Brussels gave warning that Britain must do more to curb its spiralling debt.The European Commission wants Labour to outline further spending cuts and spell out where the axe will fall.The intervention, a week before the Budget, will electrify the debate over the economy. David Cameron promised in a BBC interview last night to fight the election campaign by going farther than Mr Brown in saying where cuts will be made.The Commission is due to release its latest assessment of Britain’s plans to reduce the deficit tomorrow, but a leaked draft makes uncomfortable reading for the Prime Minister and Alistair Darling, the Chancellor. "
"Gordon Brown was dealt an embarrassing blow last night when Brussels gave warning that Britain must do more to curb its spiralling debt.The European Commission wants Labour to outline further spending cuts and spell out where the axe will fall.The intervention, a week before the Budget, will electrify the debate over the economy. David Cameron promised in a BBC interview last night to fight the election campaign by going farther than Mr Brown in saying where cuts will be made.The Commission is due to release its latest assessment of Britain’s plans to reduce the deficit tomorrow, but a leaked draft makes uncomfortable reading for the Prime Minister and Alistair Darling, the Chancellor. "
Monday, 15 March 2010
Brussels berates Britain for disappointing Budget plan
Telegraph
"Early drafts of the EC's assessment of the UK's public finances show that Brussels will urge the Treasury to put together more ambitious debt reduction plans. The warning will play into the hands of the Shadow Chancellor, George Osborne, who warned that waiting to produce a stringent budget-cutting plan would undermine Britain's credibility.
In a report on the fiscal plans put together by a range of European economies, the EC will chide Britain for failing to guarantee that it will meet the Maastricht limit for budget deficits of 3pc of gross domestic product by 2014/15. According to a draft obtained by Reuters, the Commission will say: "The overall conclusion is that the fiscal strategy in the convergence programme is not sufficiently ambitious and needs to be significantly reinforced. A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned."
"Early drafts of the EC's assessment of the UK's public finances show that Brussels will urge the Treasury to put together more ambitious debt reduction plans. The warning will play into the hands of the Shadow Chancellor, George Osborne, who warned that waiting to produce a stringent budget-cutting plan would undermine Britain's credibility.
In a report on the fiscal plans put together by a range of European economies, the EC will chide Britain for failing to guarantee that it will meet the Maastricht limit for budget deficits of 3pc of gross domestic product by 2014/15. According to a draft obtained by Reuters, the Commission will say: "The overall conclusion is that the fiscal strategy in the convergence programme is not sufficiently ambitious and needs to be significantly reinforced. A credible timeframe for restoring public finances to a sustainable position requires additional fiscal tightening measures beyond those currently planned."
U.S., U.K. Move Closer to Losing Rating, Moody’s Says
Bloomberg
" March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”
The pound fell against the dollar and the euro for the first time in three days, depreciating 0.8 percent to $1.5090, while the dollar index snapped a four-day drop, adding 0.3 percent to 90.075. "
" March 15 (Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.
The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.
Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.
“We expect the situation to further deteriorate in terms of the key ratings metrics before they start stabilizing,” Cailleteau said. “This story is not going to stop at the end of the year. There is inertia in the deterioration of credit metrics.”
The pound fell against the dollar and the euro for the first time in three days, depreciating 0.8 percent to $1.5090, while the dollar index snapped a four-day drop, adding 0.3 percent to 90.075. "
UK taxpayer 'WILL pay tens of billions of euros for Greek rescue'
Daily Mail
"The UK taxpayer could still end up forking out for the bailout of debt-stricken Greece despite Treasury assurances, politicians warned last night.The fears come as eurozone finance ministers are today expected to discuss a package of aid worth tens of billions of euros for the ailing country."
"The UK taxpayer could still end up forking out for the bailout of debt-stricken Greece despite Treasury assurances, politicians warned last night.The fears come as eurozone finance ministers are today expected to discuss a package of aid worth tens of billions of euros for the ailing country."
Darling refuses to come clean on cuts and leaves the door open to tax rises
Daily Mail
"Alistair Darling made it clear yesterday that he will not detail public-spending cuts in the pre-election Budget, as he left the door open to tax rises.The Chancellor signalled that he will ignore the advice of the City to spell out where the axe will fall to tackle Britain's soaring deficit.Instead, Labour wants to carry on spending before the election."
"Alistair Darling made it clear yesterday that he will not detail public-spending cuts in the pre-election Budget, as he left the door open to tax rises.The Chancellor signalled that he will ignore the advice of the City to spell out where the axe will fall to tackle Britain's soaring deficit.Instead, Labour wants to carry on spending before the election."
Saturday, 13 March 2010
Budget deception
Daily Mail
"Britain national debt is fast heading towards £1.4trillion and, this year, the Treasury expects to borrow £178billion.The markets are in a febrile state and - should drastic action not to be taken to reduce the deficit immediately after the election - investors are expected to pummel the already weak pound.So what is the latest response of the Government which did so much to get us into this mess?On Thursday, in a quite extraordinary intervention, Treasury Chief Secretary Liam Byrne said there would be no new tax rises to pay back our horrendous national debt.Now it is being revealed that, having found itself £3billion less in debt than expected, the Treasury plans to blow this money on pre-election Budget bribes.In many ways, this Budget is an irrelevance, so close to an election which may render its contents redundant.But the Chancellor's overall message will be crucial in defining the choice faced by the electorate.Does it want a Tory Party which, while vague on detail, is honest about the need to make spending cuts to ensure Britain's long-term economic health.Or a Labour Party which is living in cloud cuckoo land or - worse - is prepared to cynically deceive voters about tax rises and cuts which are inevitable whoever wins the election and, if fudged, will condemn the country to decades of poverty.
"Britain national debt is fast heading towards £1.4trillion and, this year, the Treasury expects to borrow £178billion.The markets are in a febrile state and - should drastic action not to be taken to reduce the deficit immediately after the election - investors are expected to pummel the already weak pound.So what is the latest response of the Government which did so much to get us into this mess?On Thursday, in a quite extraordinary intervention, Treasury Chief Secretary Liam Byrne said there would be no new tax rises to pay back our horrendous national debt.Now it is being revealed that, having found itself £3billion less in debt than expected, the Treasury plans to blow this money on pre-election Budget bribes.In many ways, this Budget is an irrelevance, so close to an election which may render its contents redundant.But the Chancellor's overall message will be crucial in defining the choice faced by the electorate.Does it want a Tory Party which, while vague on detail, is honest about the need to make spending cuts to ensure Britain's long-term economic health.Or a Labour Party which is living in cloud cuckoo land or - worse - is prepared to cynically deceive voters about tax rises and cuts which are inevitable whoever wins the election and, if fudged, will condemn the country to decades of poverty.
EU countries agree to €25bn Greece bailout
The Times
"Plans for a bailout for Greece totalling €20 to €25 billion will be put to a meeting of Eurozone finance ministers on Monday.A system of co-ordinated bilateral moves has been agreed behind the scenes by major players among the 16 countries in the single currency, led by Germany. They will step in as a last resort if Greece requests help in meeting its huge sovereign debt repayments.The package has been formulated to work around a "no bailout" clause in EU rules, and would amount to an agreement to facilitate loan guarantees if Athens finds the price of selling its debt pushed too high by speculators."
"Plans for a bailout for Greece totalling €20 to €25 billion will be put to a meeting of Eurozone finance ministers on Monday.A system of co-ordinated bilateral moves has been agreed behind the scenes by major players among the 16 countries in the single currency, led by Germany. They will step in as a last resort if Greece requests help in meeting its huge sovereign debt repayments.The package has been formulated to work around a "no bailout" clause in EU rules, and would amount to an agreement to facilitate loan guarantees if Athens finds the price of selling its debt pushed too high by speculators."
Eurozone could risk 'sovereign debt explosion'
Telegraph
"Europe's governments are at increasing risk of an interest rate shock this year as the lingering effects of the Great Recession drive debt issuance to record levels and saturate bond markets, according to Standard & Poor's. "
"Europe's governments are at increasing risk of an interest rate shock this year as the lingering effects of the Great Recession drive debt issuance to record levels and saturate bond markets, according to Standard & Poor's. "
Another banking crisis looms
Telegraph
"..The FSA document reports that UK banks need to find approximately £440bn by 2012 to replace maturing debt. This figure includes more than £300bn of funding provided under the Government’s Special Liquidity and Credit Guarantee Schemes. The Governor of the Bank of England, Mervyn King, has made it clear that these schemes will not be rolled over.As the FSA notes, that’s an awful lot of alternative funding that has to be found. But the problem may be much bigger. According to the Bank of England’s last Financial Stability Report, published in December, UK banks face a £1trillion funding timebomb. Or to put it another way, that’s around £1trillion of term money which matures over the next five years for which alternative funding has to be sought."
"..The FSA document reports that UK banks need to find approximately £440bn by 2012 to replace maturing debt. This figure includes more than £300bn of funding provided under the Government’s Special Liquidity and Credit Guarantee Schemes. The Governor of the Bank of England, Mervyn King, has made it clear that these schemes will not be rolled over.As the FSA notes, that’s an awful lot of alternative funding that has to be found. But the problem may be much bigger. According to the Bank of England’s last Financial Stability Report, published in December, UK banks face a £1trillion funding timebomb. Or to put it another way, that’s around £1trillion of term money which matures over the next five years for which alternative funding has to be sought."
Friday, 12 March 2010
'No more tax rises' gaffe by minister: He insists £178bn deficit is under control
Daily Mail
"A Treasury minister caused astonishment last night by apparently ruling out tax rises for the next four years if Labour stays in office. ....The Institute of Fiscal Studies, Britain's leading independent economic body, has said the Government must deliver £13billion in spending cuts or tax hikes in order to restore international credibility.The Treasury has announced that £57billion will be found using a combination of tax rises and spending cuts over the next four years. But the IFS says £70billion will have to be raised - 5 per cent of national income - in the next parliament.Options include a three percentage-point rise in income tax rates and National Insurance contributions, or raising VAT to 21 per cent."
"A Treasury minister caused astonishment last night by apparently ruling out tax rises for the next four years if Labour stays in office. ....The Institute of Fiscal Studies, Britain's leading independent economic body, has said the Government must deliver £13billion in spending cuts or tax hikes in order to restore international credibility.The Treasury has announced that £57billion will be found using a combination of tax rises and spending cuts over the next four years. But the IFS says £70billion will have to be raised - 5 per cent of national income - in the next parliament.Options include a three percentage-point rise in income tax rates and National Insurance contributions, or raising VAT to 21 per cent."
Europe's banks brace for UK debt crisis
Telegraph
"...Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.
"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph.
"Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points."
"...Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.
"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph.
"Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points."
Thursday, 11 March 2010
UK inflation expectations nudge higher in Feb - BoE
Reuters
"LONDON (Reuters) - The publics' expectations for inflation over the next 12 months rose slightly to 2.5 percent in February from 2.4 percent in November, a quarterly survey from the Bank of England showed on Thursday.Consumer price inflation hit 3.5 percent in January, well above the BoE's 2 percent target, though the central bank expects it to fall back within target by the end of the year.The public estimated in February that inflation was running at an annual 3.4 percent, compared to 3.2 percent in November."
"LONDON (Reuters) - The publics' expectations for inflation over the next 12 months rose slightly to 2.5 percent in February from 2.4 percent in November, a quarterly survey from the Bank of England showed on Thursday.Consumer price inflation hit 3.5 percent in January, well above the BoE's 2 percent target, though the central bank expects it to fall back within target by the end of the year.The public estimated in February that inflation was running at an annual 3.4 percent, compared to 3.2 percent in November."
Wednesday, 10 March 2010
Double-dip recession fears hit pound as output stalls
Daily Mail
"Sterling took a further dip today after a January slump in manufacturing raised fears that the UK economy is not out of the woods.The pound at one point lost 1.5 cents to trade at $1.48 after the Office for National Statistics said output had plunged by 0.9 per cent - its sharpest drop since last August.The data surprised the markets as analysts had expected a 0.3 per cent increase, and the discrepancy will revive fears that the UK economy risks entering a second phase of recession this year, having barely emerged into growth at the end of 2009."
"Sterling took a further dip today after a January slump in manufacturing raised fears that the UK economy is not out of the woods.The pound at one point lost 1.5 cents to trade at $1.48 after the Office for National Statistics said output had plunged by 0.9 per cent - its sharpest drop since last August.The data surprised the markets as analysts had expected a 0.3 per cent increase, and the discrepancy will revive fears that the UK economy risks entering a second phase of recession this year, having barely emerged into growth at the end of 2009."
Brown claims his 'sufficiently impatient and strong-willed' character helped Britain avoid a worse recession
Daily Mail
# Brown tries to turn bullying row to his advantage
# He implies Cameron is too lightweight to be PM
# Defends Labour's lack of savage spending cuts
# May 6 election very likely after Budget on March 24
# Shock 0.9 per cent fall in manufacturing output
"Critics condemned the speech as more 'waffle' and questioned how Mr Brown could set himself up as the saviour of the economy after proclaiming he had abolished boom and bust while Chancellor only to preside over the worst bust since the 1930s.The Prime Minister has been forced to change tack in his election campaign due to a slew of bleak economic data that means he cannot hail the UK's return to growth.Yesterday figures showed exports suffered their sharpest monthly fall since 2006, the Pound fell below $1.50 and there were warnings Britain's credit rating is under threat.And today, there was yet more bad news as official figures revealed a shock 0.9 per cent drop in manufacturing output in January - the biggest fall since last August.This compares to a 0.9 per cent rise in December, which helped the economy grow slightly in the fourth quarter, and will fuel fears of a double dip recession."
# Brown tries to turn bullying row to his advantage
# He implies Cameron is too lightweight to be PM
# Defends Labour's lack of savage spending cuts
# May 6 election very likely after Budget on March 24
# Shock 0.9 per cent fall in manufacturing output
"Critics condemned the speech as more 'waffle' and questioned how Mr Brown could set himself up as the saviour of the economy after proclaiming he had abolished boom and bust while Chancellor only to preside over the worst bust since the 1930s.The Prime Minister has been forced to change tack in his election campaign due to a slew of bleak economic data that means he cannot hail the UK's return to growth.Yesterday figures showed exports suffered their sharpest monthly fall since 2006, the Pound fell below $1.50 and there were warnings Britain's credit rating is under threat.And today, there was yet more bad news as official figures revealed a shock 0.9 per cent drop in manufacturing output in January - the biggest fall since last August.This compares to a 0.9 per cent rise in December, which helped the economy grow slightly in the fourth quarter, and will fuel fears of a double dip recession."
Budget to be held on March 24
Telegraph
"The Prime Minister Gordon Brown has said the Budget will be delivered on March 24, in what will be one of the most hotly anticipated statements since Labour came to power. ...It will come just weeks ahead of a general election, which is widely expected to held on May 6, and the Chancellor Alistair Darling will be under pressure to outline measures for supporting economic recovery. At the same time, he has to convince financial markets the Government has a credible plan for reducing Britain’s record deficit. "
"The Prime Minister Gordon Brown has said the Budget will be delivered on March 24, in what will be one of the most hotly anticipated statements since Labour came to power. ...It will come just weeks ahead of a general election, which is widely expected to held on May 6, and the Chancellor Alistair Darling will be under pressure to outline measures for supporting economic recovery. At the same time, he has to convince financial markets the Government has a credible plan for reducing Britain’s record deficit. "
Government's plan to cut the deficit is lacking something ... the cuts
Telegraph
"Many dismal scientists have, of late, predicted a sterling crisis if Britain acts quickly to address its appalling public deficit — none more so than those at UBS. "
"Many dismal scientists have, of late, predicted a sterling crisis if Britain acts quickly to address its appalling public deficit — none more so than those at UBS. "
Tuesday, 9 March 2010
Pound falls below $1.50 again as credit agency warns that efforts to cut deficit are moving at 'pedestrian pace'
Daily Mail
"The Government's attempts to tackle its mounting national debt are taking place at a 'pedestrian pace' that is 'too slow', an influential ratings agency warned today.In a boost to the Tories, Fitch insisted that the shortfall in the country's finances must be reduced quickly because the nation’s credit profile has 'deteriorated'.Its head of global economics Brian Coulton warned: 'If we don’t get an improvement in the medium-term outlook in the UK, there will be cause for concern.'The declaration sparked fresh fears about the strength of the UK's economic recovery and prompted the pound to hit a week-long low of $1.4965 against the dollar this afternoon.And there was further dire economic news as new figures showed that exports took their biggest plunge in more than three years in January."
"The Government's attempts to tackle its mounting national debt are taking place at a 'pedestrian pace' that is 'too slow', an influential ratings agency warned today.In a boost to the Tories, Fitch insisted that the shortfall in the country's finances must be reduced quickly because the nation’s credit profile has 'deteriorated'.Its head of global economics Brian Coulton warned: 'If we don’t get an improvement in the medium-term outlook in the UK, there will be cause for concern.'The declaration sparked fresh fears about the strength of the UK's economic recovery and prompted the pound to hit a week-long low of $1.4965 against the dollar this afternoon.And there was further dire economic news as new figures showed that exports took their biggest plunge in more than three years in January."
UK's growing trade gap sends sterling below $1.50
The Times
"Sterling slumped on foreign exchanges again this morning after it was revealed that Britain’s trade deficit with the rest of the world unexpectedly widened during January.Britain’s deficit in global goods widened to £7.987 billion during January, the biggest total since August 2008.This was up from £7.01 billion in December and compared with the £7 billion that City economists had expected.Sterling, which had traded at $1.5067 earlier in the session, sank to $1.4948 immediately after publication of the figures. "
"Sterling slumped on foreign exchanges again this morning after it was revealed that Britain’s trade deficit with the rest of the world unexpectedly widened during January.Britain’s deficit in global goods widened to £7.987 billion during January, the biggest total since August 2008.This was up from £7.01 billion in December and compared with the £7 billion that City economists had expected.Sterling, which had traded at $1.5067 earlier in the session, sank to $1.4948 immediately after publication of the figures. "
Another £20bn of tax rises and spending cuts will be needed, PwC says
Telegraph
"The accountant said its projections were based on less optimistic UK growth forecasts over the medium term compared with the Treasury. PwC said that trend growth rate in the UK is likely to be 2.25pc a year, and not the 2.75pc forecast by the Treasury.It estimated that Government borrowing would be around 5pc of gross domestic product in 2014-15, higher than the Treasury's forecast of 4.4pc. PwC said the fiscal gap could be closed through many possible combinations of tax rises and spending cuts starting from 2011-12 and building up to around £20bn a year by 2013-14. "
"The accountant said its projections were based on less optimistic UK growth forecasts over the medium term compared with the Treasury. PwC said that trend growth rate in the UK is likely to be 2.25pc a year, and not the 2.75pc forecast by the Treasury.It estimated that Government borrowing would be around 5pc of gross domestic product in 2014-15, higher than the Treasury's forecast of 4.4pc. PwC said the fiscal gap could be closed through many possible combinations of tax rises and spending cuts starting from 2011-12 and building up to around £20bn a year by 2013-14. "
Monday, 8 March 2010
Portugal budget plan cuts investment, caps wages
Reuters
"LISBON (Reuters) - Portugal plans to cut its budget deficit to below the EU's 3-percent limit by 2013 by reducing investment and capping public sector wage growth, although it will also rely on the economy recovering from this year.The plan, which Portugal has to submit to Brussels, projects a fall in the deficit to 2.8 percent of gross domestic product in 2013 from 8.3 percent this year and also raises taxes on high incomes and stock market gains, according to a draft document.The Socialist government's austerity plan, whose growth forecast for 2011 is broadly in line with latest published projections by the European Commission, is seen as key to convince markets Portugal will tackle rising deficits and debt. That in turn is vital as investors assess whether the country may be next in line to run into Greece-style fiscal problems."
"LISBON (Reuters) - Portugal plans to cut its budget deficit to below the EU's 3-percent limit by 2013 by reducing investment and capping public sector wage growth, although it will also rely on the economy recovering from this year.The plan, which Portugal has to submit to Brussels, projects a fall in the deficit to 2.8 percent of gross domestic product in 2013 from 8.3 percent this year and also raises taxes on high incomes and stock market gains, according to a draft document.The Socialist government's austerity plan, whose growth forecast for 2011 is broadly in line with latest published projections by the European Commission, is seen as key to convince markets Portugal will tackle rising deficits and debt. That in turn is vital as investors assess whether the country may be next in line to run into Greece-style fiscal problems."
Portugal follows Greece on austerity path
Reuters
"LISBON/BRUSSELS (Reuters) - Portugal became the latest euro zone country to announce austerity measures to rein in a ballooning budget deficit on Monday as debt-stricken Greece urged global action to curb speculation in credit default swaps."
"LISBON/BRUSSELS (Reuters) - Portugal became the latest euro zone country to announce austerity measures to rein in a ballooning budget deficit on Monday as debt-stricken Greece urged global action to curb speculation in credit default swaps."
Solution: emigrate to lands where your preferred laws run
Andrew Bolt, Herald Sun, Australia
"The legal system that makes this country so safe and attractive to so many Muslims is one that’s blind to your gender, class and faith. So why destroy one it’s most vital principles - and destroy, too, the concept that our laws form a community from a collection of tribes: "
"The legal system that makes this country so safe and attractive to so many Muslims is one that’s blind to your gender, class and faith. So why destroy one it’s most vital principles - and destroy, too, the concept that our laws form a community from a collection of tribes: "
'Hypocrite' Harman refuses to answer questions about Labour's major funders
Daily Mail
"Labour was accused of 'rank hypocrisy' last night over non-doms after Harriet Harman refused to answer questions about her party's major donors.The deputy leader refused to say whether some of Labour's biggest backers paid all their taxes in the UK, insisting it was a 'private matter'.Her refusal to come clean follows criticism from a string of ministers over the tax status of Tory donor Lord Ashcroft.Business Secretary Lord Mandelson last week insisted that Labour should be 'clear and upfront' about whether its backers were full British taxpayers.Labour is estimated to have taken more than £10million since 2001 from non-doms - those who legally avoid paying tax on their overseas earnings - including Lord Paul, Sir Ronald Cohen and William Bollinger.But in an interview with BBC1's Andrew Marr Show, Miss Harman repeatedly refused to discuss their tax status, insisting she did not know whether they were non-doms.She said: 'The tax status of donors is not an issue for electoral law. People's tax affairs is [sic] a private matter.'
"Labour was accused of 'rank hypocrisy' last night over non-doms after Harriet Harman refused to answer questions about her party's major donors.The deputy leader refused to say whether some of Labour's biggest backers paid all their taxes in the UK, insisting it was a 'private matter'.Her refusal to come clean follows criticism from a string of ministers over the tax status of Tory donor Lord Ashcroft.Business Secretary Lord Mandelson last week insisted that Labour should be 'clear and upfront' about whether its backers were full British taxpayers.Labour is estimated to have taken more than £10million since 2001 from non-doms - those who legally avoid paying tax on their overseas earnings - including Lord Paul, Sir Ronald Cohen and William Bollinger.But in an interview with BBC1's Andrew Marr Show, Miss Harman repeatedly refused to discuss their tax status, insisting she did not know whether they were non-doms.She said: 'The tax status of donors is not an issue for electoral law. People's tax affairs is [sic] a private matter.'
Sunday, 7 March 2010
British taxpayers to fork out millions more in benefits for EU migrants
Daily Mail
"Taxpayers face paying millions of pounds in extra benefits to Eastern European immigrants because of changes to EU regulations.For the past seven years, immigrants from eight countries due to become full members of the EU were banned from claiming benefits in the UK until they had worked here for 12 months.But from April 2011, immigrants from Poland, Estonia, Latvia, Hungary, Lithuania, Slovakia, Slovenia and the Czech Republic – where income levels are 40 per cent of the European average – will be allowed to claim Jobseekers’ Allowance and other benefits after just three months."
"Taxpayers face paying millions of pounds in extra benefits to Eastern European immigrants because of changes to EU regulations.For the past seven years, immigrants from eight countries due to become full members of the EU were banned from claiming benefits in the UK until they had worked here for 12 months.But from April 2011, immigrants from Poland, Estonia, Latvia, Hungary, Lithuania, Slovakia, Slovenia and the Czech Republic – where income levels are 40 per cent of the European average – will be allowed to claim Jobseekers’ Allowance and other benefits after just three months."
Land of Rising Sun watches as Greek star wanes
Telegraph
"The Japanese have always been fascinated with Europe. They modelled their system of government on Britain’s, as well as their health care system and roads; their railways owe something to France; their banks are being remodelled in German fashion. But right now it is another less familiar nook of Europe that is provoking the most attention: Greece.
No prizes for guessing why. With Athens having last week agreed a set of unprecedented austerity cuts and declared itself open to the prospect of an International Monetary Fund bail-out, the Japanese are asking themselves whether a similar fate lies in store for them."
"The Japanese have always been fascinated with Europe. They modelled their system of government on Britain’s, as well as their health care system and roads; their railways owe something to France; their banks are being remodelled in German fashion. But right now it is another less familiar nook of Europe that is provoking the most attention: Greece.
No prizes for guessing why. With Athens having last week agreed a set of unprecedented austerity cuts and declared itself open to the prospect of an International Monetary Fund bail-out, the Japanese are asking themselves whether a similar fate lies in store for them."
Saturday, 6 March 2010
A weak pound is no substitute for making tough decisions on debt
Telegraph
"There are growing concerns not only about Britain's dire fiscal position, but that this country's political classes lack the grit and determination to do anything about it.The deeper fear stalking the markets, in fact, is that gutless policymakers have concluded, sotto voce, that a lower pound and a dose of inflation are just the ticket - the least worst way for the UK to "tackle" its fiscal predicament."
"There are growing concerns not only about Britain's dire fiscal position, but that this country's political classes lack the grit and determination to do anything about it.The deeper fear stalking the markets, in fact, is that gutless policymakers have concluded, sotto voce, that a lower pound and a dose of inflation are just the ticket - the least worst way for the UK to "tackle" its fiscal predicament."
Friday, 5 March 2010
Greece is a harbinger of austerity for all
Telegraph
"..To many of you, this might have been obvious for some time. But there remained a deluded belief that governments and central banks could magic away the crisis, or at least save us from its worst consequences. ..Two events this week have highlighted that, despite a stimulus of unprecedented proportions and scope, they cannot. ...Policymakers are desperate to unwind the “unconventional support”, to activate “exit strategies” and begin the long march back to normality. But there is still little sign of the sustained private-sector recovery required to take up the slack. ...A year on, and the roof plainly hasn’t fallen in. There has been a severe economic contraction, but unemployment hasn’t climbed to anywhere near the levels predicted, asset and commodity prices have rebounded strongly, and because of record low interest rates, many are feeling better off than they were. Those seeking an explanation of why the Conservatives aren’t faring better in the polls need look no further: over the past year, Britain has had what amounts to the biggest pre-election giveaway of all time. ...Sadly, the necessary structural reforms must begin with our unsustainable pension and healthcare costs. Which means that working longer and saving more will become the defining mantras of the next decade.
"..To many of you, this might have been obvious for some time. But there remained a deluded belief that governments and central banks could magic away the crisis, or at least save us from its worst consequences. ..Two events this week have highlighted that, despite a stimulus of unprecedented proportions and scope, they cannot. ...Policymakers are desperate to unwind the “unconventional support”, to activate “exit strategies” and begin the long march back to normality. But there is still little sign of the sustained private-sector recovery required to take up the slack. ...A year on, and the roof plainly hasn’t fallen in. There has been a severe economic contraction, but unemployment hasn’t climbed to anywhere near the levels predicted, asset and commodity prices have rebounded strongly, and because of record low interest rates, many are feeling better off than they were. Those seeking an explanation of why the Conservatives aren’t faring better in the polls need look no further: over the past year, Britain has had what amounts to the biggest pre-election giveaway of all time. ...Sadly, the necessary structural reforms must begin with our unsustainable pension and healthcare costs. Which means that working longer and saving more will become the defining mantras of the next decade.
Thursday, 4 March 2010
Greece draws strong bond demand
Reuters
"ATHENS (Reuters) - Debt-stricken Greece drew strong demand for a crucial bond issue on Thursday but paid a steep risk premium that underscored its plea to Germany and other EU partners for support to help lower its borrowing costs.A day after the government announced draconian new austerity measures, a 5 billion euro (4.5 billion pound) 10-year syndicated bond was more than three times oversubscribed at a price of about 6.4 percent -- twice what Berlin pays, banking sources said. ....Athens needs to borrow 53 billion euros this year -- at least 20 billion of it by end May -- to repay existing debt and cover its huge budget deficit."We are compensating the markets to re-enter," the country's new debt agency chief, Petros Christodoulou, told Reuters.He said Athens aimed to bring its borrowing costs down to "levels not far wider than Ireland".
"ATHENS (Reuters) - Debt-stricken Greece drew strong demand for a crucial bond issue on Thursday but paid a steep risk premium that underscored its plea to Germany and other EU partners for support to help lower its borrowing costs.A day after the government announced draconian new austerity measures, a 5 billion euro (4.5 billion pound) 10-year syndicated bond was more than three times oversubscribed at a price of about 6.4 percent -- twice what Berlin pays, banking sources said. ....Athens needs to borrow 53 billion euros this year -- at least 20 billion of it by end May -- to repay existing debt and cover its huge budget deficit."We are compensating the markets to re-enter," the country's new debt agency chief, Petros Christodoulou, told Reuters.He said Athens aimed to bring its borrowing costs down to "levels not far wider than Ireland".
UK's recovery is 'false dawn'
Guardian
"Britain's emergence from the deepest recession since the war was a "false dawn," and paying the costs of the crisis would put the brakes on recovery, John Lewis's chairman, Charlie Mayfield, warned today. .......The upmarket retailer had a successful Christmas, and Mayfield said it would report a "strong set" of annual results next week. But he warned that growing optimism about the outlook was misplaced.....
"I think we're in a bit of a false dawn, I'm afraid to say ... Getting out of the crisis has cost an eye-watering amount of money and we simply haven't started to pay the price for that," he said. "Everyone wants to think it's going to return to how it was two years ago. It's not going to happen."
"Britain's emergence from the deepest recession since the war was a "false dawn," and paying the costs of the crisis would put the brakes on recovery, John Lewis's chairman, Charlie Mayfield, warned today. .......The upmarket retailer had a successful Christmas, and Mayfield said it would report a "strong set" of annual results next week. But he warned that growing optimism about the outlook was misplaced.....
"I think we're in a bit of a false dawn, I'm afraid to say ... Getting out of the crisis has cost an eye-watering amount of money and we simply haven't started to pay the price for that," he said. "Everyone wants to think it's going to return to how it was two years ago. It's not going to happen."
Britain's refusal to join the euro is a 'blessing', leading Japanese businessman argues
Telegraph
"Masahiro Sakane, chairman of Komatsu, the world’s second-biggest manufacturer of heavy construction equipment, said that Britain’s reluctance to join the single European currency was “a blessing”.Komatsu, which is fast catching up with world leader Caterpillar, has a factory near Newcastle which employs 750 people. The declaration represents a change of stance for Japanese business leaders, many of whom were still insisting only recently that unless the UK joined the euro they would reconsider their position there. "
"Masahiro Sakane, chairman of Komatsu, the world’s second-biggest manufacturer of heavy construction equipment, said that Britain’s reluctance to join the single European currency was “a blessing”.Komatsu, which is fast catching up with world leader Caterpillar, has a factory near Newcastle which employs 750 people. The declaration represents a change of stance for Japanese business leaders, many of whom were still insisting only recently that unless the UK joined the euro they would reconsider their position there. "
Wednesday, 3 March 2010
Greece piles on austerity
Reuters
"ATHENS (Reuters) - Greece targeted civil servants, the rich and the church Wednesday in a sweeping new 4.8 billion euro (4.3 billion pounds) austerity program designed to secure European help to tackle its crippling debt burden.The European Union praised Greece's third savings package in as many months and said the country could count on European solidarity.But German Chancellor Angela Merkel, whose backing for any European safety net for Greek borrowing would be vital, stopped short of any commitment to financial support.French Economy Minister Christine Lagarde said Greece did not need aid at the moment but Europe would be able to provide it if a call for help came.The government said the public sector pay cuts, pensions freeze and tax increases would save the equivalent of 2 percent of gross domestic product on top of existing plans to reduce this year's budget deficit to 8.7 percent of GDP from 12.7 percent in 2009."
"ATHENS (Reuters) - Greece targeted civil servants, the rich and the church Wednesday in a sweeping new 4.8 billion euro (4.3 billion pounds) austerity program designed to secure European help to tackle its crippling debt burden.The European Union praised Greece's third savings package in as many months and said the country could count on European solidarity.But German Chancellor Angela Merkel, whose backing for any European safety net for Greek borrowing would be vital, stopped short of any commitment to financial support.French Economy Minister Christine Lagarde said Greece did not need aid at the moment but Europe would be able to provide it if a call for help came.The government said the public sector pay cuts, pensions freeze and tax increases would save the equivalent of 2 percent of gross domestic product on top of existing plans to reduce this year's budget deficit to 8.7 percent of GDP from 12.7 percent in 2009."
Britain Grapples With Debt of Greek Proportions
New York Times
"As Greece’s debt troubles batter the euro, Britain has done its utmost to stay above the fray. Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets.The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape.The slide in the pound followed a sharper decline on Monday after polls released over the weekend indicated that the opposition Conservatives had lost their clear lead in the election race.Without a strong political majority to tackle Britain’s lumbering fiscal problems, investors could start to make it greatly more expensive for the government to raise funds, setting the stage for a potential double-dip recession, if not worse. “If you really want a fiscal problem, look at the U.K.,” said Mark Schofield, a fixed-income strategist at Citigroup. “In Europe, the average deficit is about 6 percent of G.D.P. and in the U.K. it’s 12 percent. It is only just beginning.”
Since the Labour government’s intense fiscal intervention in 2008 and 2009, yields on British government debt have soared to among the highest in Europe. And on a broader scale, which includes the borrowing of households and companies, the overall level of debt in Britain is the second-largest in the world,....."
"As Greece’s debt troubles batter the euro, Britain has done its utmost to stay above the fray. Until now, that is. Suddenly, investors are asking if Britain may soon face its own sovereign debt crisis if the government fails to slash its growing budget deficits quickly enough to escape the contagious fears of financial markets.The pound fell to $1.4954 on Tuesday, its lowest level against the dollar in nearly 10 months. The yield on 10-year government bonds, known as gilts, slid as investors fretted that Parliament would be too fragmented after a crucial election in May to whip Britain’s messy finances back into shape.The slide in the pound followed a sharper decline on Monday after polls released over the weekend indicated that the opposition Conservatives had lost their clear lead in the election race.Without a strong political majority to tackle Britain’s lumbering fiscal problems, investors could start to make it greatly more expensive for the government to raise funds, setting the stage for a potential double-dip recession, if not worse. “If you really want a fiscal problem, look at the U.K.,” said Mark Schofield, a fixed-income strategist at Citigroup. “In Europe, the average deficit is about 6 percent of G.D.P. and in the U.K. it’s 12 percent. It is only just beginning.”
Since the Labour government’s intense fiscal intervention in 2008 and 2009, yields on British government debt have soared to among the highest in Europe. And on a broader scale, which includes the borrowing of households and companies, the overall level of debt in Britain is the second-largest in the world,....."
Tuesday, 2 March 2010
Ken Clarke: How dare they say this crisis isn't their fault
Daily Mail
"It is time to take a clear, unblinking look at the UK economy. With a General Election only weeks away, the indicators are uniformly bleak. The UK is the last economy in the G20 to leave recession and is now witnessing one of the weakest recoveries in the industrialised world.Our budget deficit is the highest of any developed country. One in five of our young people cannot find work. Perhaps most striking of all, one pound in every four our government spends has to be borrowed from the markets.We are faced with the most extraordinary background to economic policymaking I have ever seen. Not since the war has there been such a need for concerted leadership and a programme of action.Yet in this moment of crisis, from Gordon Brown and his Cabinet, we see almost total inactivity. They still seem to believe the complete myth that this crisis was some natural calamity which hit us, without warning, from America. ..."
"It is time to take a clear, unblinking look at the UK economy. With a General Election only weeks away, the indicators are uniformly bleak. The UK is the last economy in the G20 to leave recession and is now witnessing one of the weakest recoveries in the industrialised world.Our budget deficit is the highest of any developed country. One in five of our young people cannot find work. Perhaps most striking of all, one pound in every four our government spends has to be borrowed from the markets.We are faced with the most extraordinary background to economic policymaking I have ever seen. Not since the war has there been such a need for concerted leadership and a programme of action.Yet in this moment of crisis, from Gordon Brown and his Cabinet, we see almost total inactivity. They still seem to believe the complete myth that this crisis was some natural calamity which hit us, without warning, from America. ..."
Monday, 1 March 2010
Gilts lose triple A lustre for investors
FT
"British government debt is already trading at prices that suggest it has lost its prized top credit rating, heightening concerns that investors already view gilts as less than triple A-rated assets and demand greater rewards for holding them.Since the end of November, the gap between the interest rate Britain and Germany must pay on 10-year government debt has risen from 0.35 percentage points to 0.9 points."
"British government debt is already trading at prices that suggest it has lost its prized top credit rating, heightening concerns that investors already view gilts as less than triple A-rated assets and demand greater rewards for holding them.Since the end of November, the gap between the interest rate Britain and Germany must pay on 10-year government debt has risen from 0.35 percentage points to 0.9 points."
The Markets Vote Against Labour
BOM
"The financial markets have traditionally been highly suspicious of Labour governments. For some unfathomable reason, they reckon that Labour governments spend too much, tax too much, borrow too much, and inflate too much."
Pound suffers sharpest fall in more than a year as prospect of hung parliament looms
Telegraph
"The pound fell the most in more than a year as foreign-exchange markets reacted with shock to the prospect that a hung parliament will fail to tackle Britain's deficit. ...In a dramatic morning's trading, sterling fell 4 1/2 cents against the dollar to trade below $1.48 for the first time since May. By lunchtime it had recovered some of its poise but was still down 3 1/2 cents at just over $1.49 and on course for its worst day since at least February 2009.The steep declines followed an opinion poll published in the Sunday Times showing that the Conservatives' lead has narrowed to just two percentage points over the Labour Party. Experts reckon if that voting pattern were replicated on polling day - widely expected to be May 6 - Labour would win enough seats to lead a hung parliament in which neither of the main parties has a majority. "
"The pound fell the most in more than a year as foreign-exchange markets reacted with shock to the prospect that a hung parliament will fail to tackle Britain's deficit. ...In a dramatic morning's trading, sterling fell 4 1/2 cents against the dollar to trade below $1.48 for the first time since May. By lunchtime it had recovered some of its poise but was still down 3 1/2 cents at just over $1.49 and on course for its worst day since at least February 2009.The steep declines followed an opinion poll published in the Sunday Times showing that the Conservatives' lead has narrowed to just two percentage points over the Labour Party. Experts reckon if that voting pattern were replicated on polling day - widely expected to be May 6 - Labour would win enough seats to lead a hung parliament in which neither of the main parties has a majority. "
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