Manufacturing falls, and trade gap worsens

On top of the looting and mayhem, the UK economy is suddenly looking very flat indeed. UK manufacturing output fell by 0.4% in June according to figures from the Office for National Statistics. This compares with an increase of 1.8% in May which had led many analysts to expect manufacturing would have risen by about 0.2% in June. There is … Continue reading

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Record holiday visits to the UK

Some people obviously want to be here – even if it isn’t us. In 2010 we saw the highest number of foreign holidaymakers on record coming to the UK. According to the Office of National Statistics there were 11.7 million of them, and they spent £6.64bn in the UK. On the other hand, 36.4 million UK residents went on holiday … Continue reading

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What Roger Bootle thinks about UK manufacturing

Roger Bootle, Managing Director of Capital Economics, shared his thoughts in an article in The Telegraph today. He examines the question: “Does manufacturing matter?” To which he answers ‘yes’. And to the question: ”given that we’ve got so little of it left, aren’t we essentially finished?” he answers ‘no’.   UK manufacturing’ share of GDP has fallen from over 30% … Continue reading

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UK austerity measures “unsustainable” says George Soros

George Soros, the billionaire investor and hedge fund manager, gave his views on the UK’s economic policy at the World Economic Forum in Davos in Switzerland yesterday. He is quoted as saying that although he thought the UK government was right to start making cuts he also thought the plans would have to be modified. He said: “I don’t think … Continue reading

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Oops! CPI inflation rises to 3.7%. Zimbabwe here we come

“Inflation will soon be in double figures” says Governor of the Bank of England. “We can’t raise interest rates. That’s the only thing preventing David Cameron’s fiscal policy turning the country into a total wasteland.” Well he didn’t actually say that, but he might have liked to. The Governor’s mantra that inflation will eventually come down of its own accord, … Continue reading

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Sterling, economic growth and interest rates

One immediate effect of the 0.8% rise in UK economic growth during the third quarter, which was announced yesterday, was an upward valuation in sterling. The pound rose by about 1.5 cents against the dollar and stands at $1.5814 this morning, according to Reuters. The pound has now risen by almost 2 cents this week. The story is the same … Continue reading

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Several years before we get back to normal

It will be several years before the economy gets “back to anything we can call remotely normal”, said the governor of the Bank of England, Mervyn King in the Bank’s August Inflation Report. Personally I would hate to be seen as normal, but there is something quite reassuring about having that name applied to the economy. However, we are not … Continue reading

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Why is inflation staying so high?

The UK is suffering far higher inflation than most people expected at this stage of the economic cycle. Our inflation is well above that in the US and EU. What are the reasons for this and what implications can we expect? Roger Bootle has tackled this question in an article in the Telegraph. He believes that one-off factors have been … Continue reading

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Have UK exports “hit the wall”?

The UK’s deficit on trade in goods and services widened to £3.8bn in May, compared to a deficit of £3.5bn in April. This is the worst balance of trade deficit for two years. These figures were published by the ONS today. The surplus on trade in services was £4.2bn in May, up from the £3.9bn recorded in April. On the … Continue reading

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The UK could lose 1.3m jobs as a result of the Budget

Surprise, surprise! According to the Guardian, a private Treasury assessment of the planned spending cuts says that up to 1.3m jobs could be lost over the next five years. The Guardian says that it has seen a slide from the final version of a presentation for last week’s Budget, which says that: “100-120,000 public sector jobs and 120-140,000 private sector … Continue reading

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