The Times
"You might be forgiven for thinking that Americans are feeling just a little bit smug. As Britain teeters on the brink of dropping back into recession, the world’s biggest economy grew at an annual rate of 5.9 per cent, figures showed yesterday, revised upwards from the original figure of 5.7 per cent. ....But if America’s recovery is soggy, ours appears to be stillborn. Harnessed to our weakened financial service and property carthorses, we struggle to get momentum. The real recovery is in the Far East, but, unlike the US, Britain does little trade with those nations or even North America. Europe is our patch to till and, for now, the spring looks late indeed. "
Sunday, 28 February 2010
Pound under attack as debt worries grow
The Times
"..Greece’s woes had hit the euro hard but last week attention shifted to sterling, which was undermined by weak investment data and dovish comments from Mervyn King, the Bank of England governor, and some of his monetary policy committee (MPC) colleagues. ..."
"..Greece’s woes had hit the euro hard but last week attention shifted to sterling, which was undermined by weak investment data and dovish comments from Mervyn King, the Bank of England governor, and some of his monetary policy committee (MPC) colleagues. ..."
Germany and France agree to rescue Greece, with conditions
Telegraph
"Germany and France are putting together a plan to buy as much as €30bn (£26.7bn) of Greek debt to help the country avoid a calamitous sovereign default – but only if Athens commits to slashing public spending. "
"Germany and France are putting together a plan to buy as much as €30bn (£26.7bn) of Greek debt to help the country avoid a calamitous sovereign default – but only if Athens commits to slashing public spending. "
Saturday, 27 February 2010
Don't be fooled: GDP was actually revised down
Telegraph
"’m going to say something which might come as a surprise, given all the positive coverage this morning of the GDP figures. The Office for National Statistics has actually revised GDP down today – not up.The size of the British economy – in other words the total amount of cash generated by its companies and spent by its people – was actually £133m smaller in the fourth quarter than the ONS previously thought. Before today’s revisions, it thought the economy pumped out £315,845m worth of output in those three months. Now, it thinks the actual figure was more like £315,712m. ..."
"’m going to say something which might come as a surprise, given all the positive coverage this morning of the GDP figures. The Office for National Statistics has actually revised GDP down today – not up.The size of the British economy – in other words the total amount of cash generated by its companies and spent by its people – was actually £133m smaller in the fourth quarter than the ONS previously thought. Before today’s revisions, it thought the economy pumped out £315,845m worth of output in those three months. Now, it thinks the actual figure was more like £315,712m. ..."
Recovery? Who are you trying to kid?
Telegraph
"n some recent work for the Institute for Fiscal Studies, Barclays Capital concluded that the outlook for long-term growth – and therefore the already calamitous state of the public finances – is almost certainly worse than the Treasury has been forecasting. According to Barclays, the permanent loss of output in the UK economy may be as much as double what the Treasury has estimated, while the assumed future growth rate of 2.75 per cent is dismissed as unrealistically high. It is only mildly reassuring to know that in terms of delusional thinking, the Treasury is less guilty than many other developed nations, which have all been far too optimistic in their assumptions.
Barclays’ gloomy prognosis chimes with remarks made this week by the Governor of the Bank of England, Mervyn King. His take on the prospects for recovery did not make for pleasant listening. For more than a decade now, he reminded us, Britain and other deficit nations have consumed more than they’ve earned, and borrowed the difference. To heal the resulting wounds, that process needs to go sharply into reverse. "
"n some recent work for the Institute for Fiscal Studies, Barclays Capital concluded that the outlook for long-term growth – and therefore the already calamitous state of the public finances – is almost certainly worse than the Treasury has been forecasting. According to Barclays, the permanent loss of output in the UK economy may be as much as double what the Treasury has estimated, while the assumed future growth rate of 2.75 per cent is dismissed as unrealistically high. It is only mildly reassuring to know that in terms of delusional thinking, the Treasury is less guilty than many other developed nations, which have all been far too optimistic in their assumptions.
Barclays’ gloomy prognosis chimes with remarks made this week by the Governor of the Bank of England, Mervyn King. His take on the prospects for recovery did not make for pleasant listening. For more than a decade now, he reminded us, Britain and other deficit nations have consumed more than they’ve earned, and borrowed the difference. To heal the resulting wounds, that process needs to go sharply into reverse. "
Friday, 26 February 2010
Who owns the UK's debt?
BBC
"The amount the economy grew in the last three months of 2009 has been revised up from 0.1% to 0.3%.Even the first estimate, that it had grown a miserly 0.1%, was enough to take the country out of recession.So why does this 0.2 percentage point change matter? In large part, because of two key effects on the country's debt position.Firstly, if the economy is not growing, the amount of tax paid to the government will not grow, which means that the amount it has to borrow to fund its spending programmes will increase. Figures released last week showed that the government borrowed £4.3bn in January, which is usually a month when bumper corporate tax receipts mean that it does not have to borrow any money.Secondly, the UK does not want to get a reputation as a weak economy, because that would increase the interest rate it has to pay to borrow money...."
"The amount the economy grew in the last three months of 2009 has been revised up from 0.1% to 0.3%.Even the first estimate, that it had grown a miserly 0.1%, was enough to take the country out of recession.So why does this 0.2 percentage point change matter? In large part, because of two key effects on the country's debt position.Firstly, if the economy is not growing, the amount of tax paid to the government will not grow, which means that the amount it has to borrow to fund its spending programmes will increase. Figures released last week showed that the government borrowed £4.3bn in January, which is usually a month when bumper corporate tax receipts mean that it does not have to borrow any money.Secondly, the UK does not want to get a reputation as a weak economy, because that would increase the interest rate it has to pay to borrow money...."
Pound slides as figures underline scale of UK recession
Telegraph
"The pound slid to new lows on Friday after it emerged that an apparent improvement in Britain's growth late last year disguised the fact that the Office for National Statistics has actually cut its estimate of Britain's economic output. ".....
"In fact, the official estimate of the level of economic output in the fourth quarter was actually £133m lower than the ONS's previous estimate, at £315,712m. The ONS also revealed that the peak-to-trough fall in economic output was, at 6.2pc, significantly steeper than the 6pc decline previously estimated – making this the deepest recession since comparable records began just after the Second World War, and by most yardsticks the most severe economic contraction since the 1920s.
Andrew Lilico, chief economist at Policy Exchange, pointed out that the lower estimate of GDP would have far-reaching consequences for the public finances. He said: "A political consequence is that, since the economy will now be smaller at the start of the 2010/11 budget year, tax receipts should now be expected to be lower, so the 2010/11 and 2011/12 deficit projections will need to be revised up – perhaps to above £200bn – even if the deficit ends up fractionally down this year. That makes early spending cuts more urgent."
"The pound slid to new lows on Friday after it emerged that an apparent improvement in Britain's growth late last year disguised the fact that the Office for National Statistics has actually cut its estimate of Britain's economic output. ".....
"In fact, the official estimate of the level of economic output in the fourth quarter was actually £133m lower than the ONS's previous estimate, at £315,712m. The ONS also revealed that the peak-to-trough fall in economic output was, at 6.2pc, significantly steeper than the 6pc decline previously estimated – making this the deepest recession since comparable records began just after the Second World War, and by most yardsticks the most severe economic contraction since the 1920s.
Andrew Lilico, chief economist at Policy Exchange, pointed out that the lower estimate of GDP would have far-reaching consequences for the public finances. He said: "A political consequence is that, since the economy will now be smaller at the start of the 2010/11 budget year, tax receipts should now be expected to be lower, so the 2010/11 and 2011/12 deficit projections will need to be revised up – perhaps to above £200bn – even if the deficit ends up fractionally down this year. That makes early spending cuts more urgent."
Man who broke the Bank of England George Soros 'at centre of hedge funds betting against crisis-hit euro'
Daily Mail
" * Traders make a series of huge bets against single currency
* Fund managers could make hundreds of millions profit
* Greek PM says he will protect country against speculators
* Merkel: The euro is in a 'difficult situation' for the first time
The man about to break the euro? George Soros is said to be placing large bearish bets against the single currency - The man who broke the Bank of England in 1992 is said to be at the centre of a plot to cash in on the demise of the euro.George Soros's investment business Soros Fund Management is among a group of heavyweight Wall Street hedge funds which have launched a series of massive bets against the euro."
" * Traders make a series of huge bets against single currency
* Fund managers could make hundreds of millions profit
* Greek PM says he will protect country against speculators
* Merkel: The euro is in a 'difficult situation' for the first time
The man about to break the euro? George Soros is said to be placing large bearish bets against the single currency - The man who broke the Bank of England in 1992 is said to be at the centre of a plot to cash in on the demise of the euro.George Soros's investment business Soros Fund Management is among a group of heavyweight Wall Street hedge funds which have launched a series of massive bets against the euro."
Euro in danger as the Greek crisis deepens and Merkel admits currency is at risk
Daily Mail
"Greece's debt crisis has plunged the euro into a ‘ difficult situation’, the German Chancellor Angela Merkel admitted last night, prompting fresh fears about the collapse of the single currency.In the gravest sign yet of the international threat posed by Greece’s crippled economy, Mrs Merkel warned for the first time that the eurozone faces a ‘ dangerous’ period.The beleaguered euro initially fell in the wake of her comments and fresh speculation that Greece’s international credit rating may be downgraded.
On a dramatic day which also saw money markets around the world fall:
* The head of Germany’s leading debt management agency warned the euro would collapse if any member defaulted on its debt.
* U.S. regulators said they would investigate whether investment bank Goldman Sachs helped Athens disguise its budget deficit.
* EU inspectors visiting Athens told authorities they see a deeper than expected recession.
"Greece's debt crisis has plunged the euro into a ‘ difficult situation’, the German Chancellor Angela Merkel admitted last night, prompting fresh fears about the collapse of the single currency.In the gravest sign yet of the international threat posed by Greece’s crippled economy, Mrs Merkel warned for the first time that the eurozone faces a ‘ dangerous’ period.The beleaguered euro initially fell in the wake of her comments and fresh speculation that Greece’s international credit rating may be downgraded.
On a dramatic day which also saw money markets around the world fall:
* The head of Germany’s leading debt management agency warned the euro would collapse if any member defaulted on its debt.
* U.S. regulators said they would investigate whether investment bank Goldman Sachs helped Athens disguise its budget deficit.
* EU inspectors visiting Athens told authorities they see a deeper than expected recession.
Thursday, 25 February 2010
We must arm ourselves for a class war
Telegraph
"..Today, the economy is in a far more damaging spiral. The first leg of the financial and economic crisis, which stemmed from excessive private borrowing and the subsequent collapse of the banking industry, is over. The second leg, characterised by a crisis of sovereign debt in even the richest economies, is only just beginning. The Bank of England's inflation-targeting approach is under question from sources as authoritative as the International Monetary Fund. The world economy looks increasingly vulnerable to a "double-dip", tipping back into recession or stagnation rather than bouncing back to health."
"..Today, the economy is in a far more damaging spiral. The first leg of the financial and economic crisis, which stemmed from excessive private borrowing and the subsequent collapse of the banking industry, is over. The second leg, characterised by a crisis of sovereign debt in even the richest economies, is only just beginning. The Bank of England's inflation-targeting approach is under question from sources as authoritative as the International Monetary Fund. The world economy looks increasingly vulnerable to a "double-dip", tipping back into recession or stagnation rather than bouncing back to health."
London companies predict 'double dip' recession
Telegraph
""Businesses in the capital are bracing themselves for a return to recession or at the very best weak economic growth. The government needs to take heed and deal with the UK's public debt to restore confidence in UK markets and keep businesses free from the burden of higher taxes and onerous regulation," said Colin Stanbridge, chief executive of the LCCI. "
""Businesses in the capital are bracing themselves for a return to recession or at the very best weak economic growth. The government needs to take heed and deal with the UK's public debt to restore confidence in UK markets and keep businesses free from the burden of higher taxes and onerous regulation," said Colin Stanbridge, chief executive of the LCCI. "
Number of immigrants applying for British citizenship jumps 30% in just three months
Daily Mail
"More than 44,000 British passports were handed out to foreigners in just three months as the number of applications for citizenship soared 30 per cent.Latest Home Office figures reveal that 51,315 applications were made for citizenship in the final quarter of last year - a massive rise from the 39,325 requests made for the same period in 2008.The number of immigrants granted UK passports rose 15 per cent from 38,955 to 44,870. It is much higher than the previous record average of 41,000 passports handed out each quarter in 2007."
"More than 44,000 British passports were handed out to foreigners in just three months as the number of applications for citizenship soared 30 per cent.Latest Home Office figures reveal that 51,315 applications were made for citizenship in the final quarter of last year - a massive rise from the 39,325 requests made for the same period in 2008.The number of immigrants granted UK passports rose 15 per cent from 38,955 to 44,870. It is much higher than the previous record average of 41,000 passports handed out each quarter in 2007."
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