Growth continues to slow in major economies

Gross domestic product (GDP) in the OECD area slowed to 0.2% in the second quarter of 2011, down from 0.3% in the previous quarter. This is the fourth consecutive quarter of slower growth. The slowdown was particularly marked in the Euro area and the European Union, where growth slowed to 0.2% compared to 0.8% in the previous quarter. Significant falls … Continue reading

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UK Manufacturing grinds to a halt

Manufacturing has been driving our economic recovery, such as it is, and was expected to continue to do so. But, there is bad news. Although manufacturing output grew by 0.9% in January, it failed to grow at all in February. Alan Clarke, UK economist at BNP Paribas, was quoted as saying that the data was “bitterly disappointing”. The wider measure … Continue reading

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Homeowners paying off mortgages at record rate

In 2010, homeowners paid back over £24bn of their mortgage borrowings, which was the highest amount since records began in 1970. Detailed figures from the Bank of England also showed that £7bn was repaid in the final quarter of 2010, compared to £6.6bn in the third quarter. This means that mortgage repayments have exceeded borrowings for eleven consecutive quarters. This … Continue reading

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“We’re absolutely certain that nobody knows what’s going to happen.”

This could have been the headline from the Bank of England’s November Inflation Report that was published this morning. All in all, it was riddled with uncertainty. Mr King, the governor of the Bank, said that given the slower growth in government spending, the strength of any recovery depended heavily on what was happening externally. He said: “The biggest …. … Continue reading

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Oh no, it’s started already.

Following my blog yesterday on the dangers of austerity packages, Ireland’s actions are coming home to roost. Ireland had been praised in some quarters for its savage austerity measures which have led to rising unemployment. But it has just been announced that the Irish Republic saw shrinkage of its economy by 1.2% in the second quarter. The fact that government’s … Continue reading

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NICE is to become a DRAG

So writes Larry Elliott in his online article today at www.guardian.co.uk. He says:  “Get ready for the austerity decade. Forget all thoughts that the economic storm of the past 30 months is about to blow over. We’ve had what Mervyn King once called the NICE period of non-inflationary constant expansion but now we face a long DRAG – deficit reduction, … Continue reading

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Inflation, Growth and Stability

Paul Tucker, who is a member of the Monetary Policy Committee and Deputy Governor for Financial Stability, has just given a speech in which he discusses some of the current challenges facing monetary policy and issues relevant to the overall framework for preserving macroeconomic stability. First, he discusses the effects of household and bank balance sheet repair on aggregate demand, … Continue reading

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OECD unemployment stabilises

Latest figures from Paris this morning show that the OECD unemployment rate stabilised at 8.8% in December 2009. This was unchanged from the previous month but was up by 1.8 percentage points from the same month a year earlier.   Given that unemployment is a lagging indicator, and normally continues rising after a recession has come to an end, it … Continue reading

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To Hull and back

The recent recession has increased the gap between city economies in the UK, according to the Centre for Cities annual index. When looking at the increases in the Job Seekers Allowance claimant count rate in November 2009, compared to February 2008, Hull fares the worst. In fact the claimant count rose from 4.8% to 8.4% over this period. At the … Continue reading

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Advanced economies no longer in recession

After four quarters of continuous decline in GDP, the 30 advanced nations of the OECD showed that growth had stabilised in the second quarter of 2009. Well, if we are being completely truthful, they recorded a contraction of -0.002%, but this compares with a fall of 2.1% in the previous quarter.   As far as the major seven countries of … Continue reading

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