Daily Mail
"The latest IMF report has revised its estimates for the scale of Britain's deficit upwards.It predicts that by 2010, the UK's debt will equate to 13.3 per cent of gross domestic product - compared to 9.7 per cent for the US.The damning verdict will reignite the political row over the Prime Minister’s refusal to acknowledge the need for spending cuts."
Friday, 31 July 2009
Recession 'could force the unemployment toll to 4m'
Daily Mail
"The unemployment rate could hit almost 4million by the end of the recession - far worse than the post-war peak under Margaret Thatcher.A doomsday scenario by the Centre for Economics and Business Research think-tank says unemployment could rise to 3.8million from its current level of around 2.4million. At the same time national debt could soar to £2trillion."
"The unemployment rate could hit almost 4million by the end of the recession - far worse than the post-war peak under Margaret Thatcher.A doomsday scenario by the Centre for Economics and Business Research think-tank says unemployment could rise to 3.8million from its current level of around 2.4million. At the same time national debt could soar to £2trillion."
Wednesday, 29 July 2009
Big-bank bashing is pure political hypocrisy
The Times
"The days of easy lending are emphatically over, as the Chancellor well knows. It was his Government that let debt run wild.....
The Bank of England’s Financial Stability Report, though it may not be everyone’s idea of a ripping yarn, contains some excellent explanatory material about the state of Britain’s banks. It does not make for very happy reading. In fact, it makes for very grim reading."
"The days of easy lending are emphatically over, as the Chancellor well knows. It was his Government that let debt run wild.....
The Bank of England’s Financial Stability Report, though it may not be everyone’s idea of a ripping yarn, contains some excellent explanatory material about the state of Britain’s banks. It does not make for very happy reading. In fact, it makes for very grim reading."
Five months on and Quantitative Easing still isn’t working
Telegraph
"The problem is, according to the latest stats from the Bank, we haven’t yet even had any convincing signs that step one is working very well. All other things being equal, one would expect a £125bn injection to increase the amount of cash sloshing around the economy (the Bank calls this M4 - no relation to the motorway) by 7pc or more. But according to figures released this morning, the growth in the key measure of M4 (including complex and noisy things like hedge funds) tailed off in June, falling 0.6pc in June following a 0.2pc rise in May."
"The problem is, according to the latest stats from the Bank, we haven’t yet even had any convincing signs that step one is working very well. All other things being equal, one would expect a £125bn injection to increase the amount of cash sloshing around the economy (the Bank calls this M4 - no relation to the motorway) by 7pc or more. But according to figures released this morning, the growth in the key measure of M4 (including complex and noisy things like hedge funds) tailed off in June, falling 0.6pc in June following a 0.2pc rise in May."
The UK economy is still too sick to throw away its QE prescription
Telegraph
"Officially the Bank of England's quantitative easing programme still has at least another week and a bit to run, although to judge from the behaviour of the gilt markets and the comments of economists, you'd be forgiven for thinking the bold move is all but over. .....As Charlie Bean, deputy governor of the Bank, has said repeatedly on his tour of the UK to explain the unusual monetary medicine, it may take as many as nine months to show its full effects. But so far the results have hardly been encouraging. The fact is that the vast majority of this money is being funnelled into banks' reserves – the cash they keep with the Bank of England – and is not finding its way out again."
"Officially the Bank of England's quantitative easing programme still has at least another week and a bit to run, although to judge from the behaviour of the gilt markets and the comments of economists, you'd be forgiven for thinking the bold move is all but over. .....As Charlie Bean, deputy governor of the Bank, has said repeatedly on his tour of the UK to explain the unusual monetary medicine, it may take as many as nine months to show its full effects. But so far the results have hardly been encouraging. The fact is that the vast majority of this money is being funnelled into banks' reserves – the cash they keep with the Bank of England – and is not finding its way out again."
Monday, 27 July 2009
Britain's path to recovery will be long and protracted, Deloitte warns
Telegraph
"The widely-watched forecast come after figures on Friday showed the economy contracted far more than feared last quarter, dashing hopes that Britain would enjoy a quick, 'V’ shaped recovery. Roger Bootle, author of Deloitte’s review, argues that an upturn will at instead be 'U’ shaped - a period of anemic growth - at best, but admits the economy could slide back into recession."
"The widely-watched forecast come after figures on Friday showed the economy contracted far more than feared last quarter, dashing hopes that Britain would enjoy a quick, 'V’ shaped recovery. Roger Bootle, author of Deloitte’s review, argues that an upturn will at instead be 'U’ shaped - a period of anemic growth - at best, but admits the economy could slide back into recession."
Iceland's krona proves the magic wand as Europe ails
Telegraph
"The krona has fallen by half against the euro since the `New Viking' trio of Landsbanki, Glitnir, and Kaupthing strayed out of their depth and brought down Iceland's financial system. .....Those who point to Iceland as a scarecrow exhibit of what happens to a small country caught in a financial storm without the shield of euro membership have the matter backwards, as will become ever clearer over the next two years. .....It baffles me why rating agencies still talk of downgrading Iceland's debt to junk. The country should emerge with public debt of 80pc to 100pc of GDP – much like Britain. Yet Iceland also has the world's best-funded pension system at 120pc of GDP. It is the two together that counts.
In their angst, Icelanders look wistfully at the apparent safe port of EU membership. The Althingi has voted to start entry talks. But the storm will have blown over well before an EU referendum is held in two or three years. By then the delayed cluster bomb of Europe's unemployment will have detonated. Try selling EU protection then."
"The krona has fallen by half against the euro since the `New Viking' trio of Landsbanki, Glitnir, and Kaupthing strayed out of their depth and brought down Iceland's financial system. .....Those who point to Iceland as a scarecrow exhibit of what happens to a small country caught in a financial storm without the shield of euro membership have the matter backwards, as will become ever clearer over the next two years. .....It baffles me why rating agencies still talk of downgrading Iceland's debt to junk. The country should emerge with public debt of 80pc to 100pc of GDP – much like Britain. Yet Iceland also has the world's best-funded pension system at 120pc of GDP. It is the two together that counts.
In their angst, Icelanders look wistfully at the apparent safe port of EU membership. The Althingi has voted to start entry talks. But the storm will have blown over well before an EU referendum is held in two or three years. By then the delayed cluster bomb of Europe's unemployment will have detonated. Try selling EU protection then."
Sunday, 26 July 2009
Huge gilts row barely registers as the UK sleepwalks into stagnation
Telegraph
"The political classes obsess over the Norwich North by-election and Labour's slow-motion hara-kiri under Gordon Brown. But the news that really matters – the economic news – keeps flowing thick and fast. And it's far from reassuring. .....These GDP numbers expose the City's talk of "green shoots" as nonsense. A full recovery won't happen while the UK remains burdened by our newly created Japanese-style "zombie banks".This is the heart of the problem – yet the politicians don't want to know. The banks are ticking over on a diet of government cash while charging usurious rates on extremely limited lending books. The UK, meanwhile, sleepwalks towards a lost decade."
"The political classes obsess over the Norwich North by-election and Labour's slow-motion hara-kiri under Gordon Brown. But the news that really matters – the economic news – keeps flowing thick and fast. And it's far from reassuring. .....These GDP numbers expose the City's talk of "green shoots" as nonsense. A full recovery won't happen while the UK remains burdened by our newly created Japanese-style "zombie banks".This is the heart of the problem – yet the politicians don't want to know. The banks are ticking over on a diet of government cash while charging usurious rates on extremely limited lending books. The UK, meanwhile, sleepwalks towards a lost decade."
Friday, 24 July 2009
Britain facing 'decade of pain' as economists warn public spending must be cut by 16%
Daily Mail
"Now the Institute for Fiscal Studies, in an analysis for the Guardian, is warning of a 'decade of pain' that will see public spending at its tightest since 1977 - just before the Winter of Discontent under the last Labour government."
"Now the Institute for Fiscal Studies, in an analysis for the Guardian, is warning of a 'decade of pain' that will see public spending at its tightest since 1977 - just before the Winter of Discontent under the last Labour government."
Britain's hopes of a quick recovery from recession dashed as GDP disappoints
Telegraph
"Hopes that Britain will soon emerge from the worst recession in decades were dealt a blow on Friday after figures showed the economy shrank more than feared in the last three months. .....The figures are "shockingly bad and firmly dash any hopes that the UK had already pulled out of recession," said Vicky Redwood of Capital Economics. "Overall, it still looks likely to be a long hard slog to get the economy back on track."
"Hopes that Britain will soon emerge from the worst recession in decades were dealt a blow on Friday after figures showed the economy shrank more than feared in the last three months. .....The figures are "shockingly bad and firmly dash any hopes that the UK had already pulled out of recession," said Vicky Redwood of Capital Economics. "Overall, it still looks likely to be a long hard slog to get the economy back on track."
Wednesday, 22 July 2009
UK government debt: almost 9p of each £1 in tax will be needed to pay the interest
Telegraph
"The National Institute of Economic and Social Research said that costs of servicing government debt will rise from £25.6bn this fiscal year to £50.7bn in 2013/14, due to a combination of higher interest rates and a far greater debt burden. The warning underlines the cost facing taxpayers as the Government debt rises at the fastest rate in peacetime history."
"The National Institute of Economic and Social Research said that costs of servicing government debt will rise from £25.6bn this fiscal year to £50.7bn in 2013/14, due to a combination of higher interest rates and a far greater debt burden. The warning underlines the cost facing taxpayers as the Government debt rises at the fastest rate in peacetime history."
A recession for the many, not the few
Telegraph
"It would be bad enough if it was merely the unskilled and poor who were suffering. But we are also facing a youth unemployment crisis of almost unprecedented proportions – indeed, any claims Gordon Brown has to have helped the youngest and most vulnerable have been shattered. The recession has created an army of dispossessed, disenchanted young men (the majority of those losing their jobs are male). It is a recipe for social chaos not witnessed since the riot-punctuated Seventies and Eighties. It also, perhaps, helps to explain the visceral public reaction to this newspaper’s revelations over MPs’ expenses: it was a sign of the widening rift, already at unprecedented proportions before the crash, between the haves and have-nots."
"It would be bad enough if it was merely the unskilled and poor who were suffering. But we are also facing a youth unemployment crisis of almost unprecedented proportions – indeed, any claims Gordon Brown has to have helped the youngest and most vulnerable have been shattered. The recession has created an army of dispossessed, disenchanted young men (the majority of those losing their jobs are male). It is a recipe for social chaos not witnessed since the riot-punctuated Seventies and Eighties. It also, perhaps, helps to explain the visceral public reaction to this newspaper’s revelations over MPs’ expenses: it was a sign of the widening rift, already at unprecedented proportions before the crash, between the haves and have-nots."
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