LONDON (SHARECAST) - Profits bounced 20% higher last year at SThree with all of the recruitment specialist's markets growing so far in 2011.
In the year to November, profits rose from Ј8.9m to Ј21.6m with an underlying improvement of 20%. Sales fell to Ј474m from Ј519m.
"SThree delivered a strong result in 2010 in a market which was still some way from fully recovered. Sentiment improved steadily and we ended the year with all our markets and territories in growth," Russell Clements, chief executive, commented.
Permanent placements increased by 8.1% to 6,551 (2009: 6,060), with average fees remaining strong. The number of active contractors at year end increased by 4.9% to 4,359 (2009: 4,157). Some 76% of gross profit are now derived from outside of the UK ICT market (2009: 69%), it said.
"Taking all the available indicators into consideration, we feel there are justifiable reasons to remain optimistic about the forthcoming year," Clements added. The dividend for the year is unchanged at 12p.
Source: http://www.sharecast.com
Monday, January 31, 2011
Sunday, January 30, 2011
George Osborne warns unions over strike plans
George Osborne today called unions the "forces of stagnation" and blamed them for holding back Britain's economic recovery.
He warned that the government was preparing to draw up contingency plans if its deficit-reduction timetable was disrupted by strikes.
Union leaders met on Friday to discuss the possibility of co-ordinating strikes against the public spending cuts and the TUC has organised a protest in London on 26 March, three days after the budget, which it hopes will attract 1 million demonstrators.
Osborne repeated earlier warnings that union law could be changed.
"We are prepared to consider changes to the law around strikes – as a last resort – but I hope we never get there because I hope we can have a mature, grown-up conversation," he told BBC1's Politics Show.
"I completely understand that trade unions want to represent the interests of their members, but the interests of their members is that jobs are created and prosperity returns to our country".
Speaking at the end of a week in which the government was rocked by an unexpected contraction in the British economy in the last quarter of 2010, Osborne said he hoped growth would come from debt reduction, cutting corporate tax rates and reforms to health and education.
He said: "The challenge for the government in the next year or so is to remove the supply-side obstacles to growth.
"The [other] challenge to me is that UK corporates are sitting on cash on their balance sheets equivalent to about 5% of GDP. What I've got to do in the next few months is to persuade them to start spending that money."The shadow chancellor, Ed Balls, dismissed the government's growth plan and accused the chancellor of being in denial.
On BBC1's Andrew Marr Show, Balls stopped short of predicting another quarter of negative growth but he warned the VAT increase imposed earlier this month made the economy's chances of recovery more unlikely and he called for the government to think again.
Balls pointed out that the US economy, which has not embarked on deficit reduction yet, grew towards the end of last year.
Balls also questioned a statement made on Tuesday by the governor of the Bank of England, Mervyn King, who called the government's deficit reduction timetable the "right course".
He said: "I don't think that Mervyn King, in his heart of hearts, really believes that crushing the economy in this way is the right way to get the economy moving."
Asked if he thought King had been leaned on by the government, Balls said: "I think the governor is being loyal."
Osborne said he felt a "huge responsibility" to make the right decisions for Britain. "I'm fulfilling it to the best of my ability, doing what I think is required for Britain," he told the BBC. "So we are doing those things, they are not easy, they are not easy for families, I completely understand that. But frankly, when you look at the mess we inherited, we didn't have many other options.
When asked why he did not modify the government's deficit-reduction timetable, he said: "If I went to parliament and got up at the despatch box in the House of Commons and said, 'I am abandoning the deficit-reduction plan that Britain set out last year.' What do you think the reaction would be? Within minutes Britain would be in financial turmoil. I'm not prepared to let that happen. It requires tough, difficult decisions. No politician likes cutting spending, increasing people's taxes, but I was delivered a mess by the previous government and I'm trying to clear it up."
The government will tomorrow announce one element of its growth strategy. The employment minister, Chris Grayling, will say that six "enterprise clubs" will be created around the country where established businesses will share their experience with unemployed people, providing them with advice they might not otherwise be able to afford.
Grayling will launch the first club in St Helens, Merseyside, with the head of the British chambers of commerce, David Frost. They will also launch a new enterprise allowance to provide financial help and mentoring to those who have been unemployed for more than six months. They aim to support up to 40,000 new businesses in this way.
Source: http://www.guardian.co.uk
He warned that the government was preparing to draw up contingency plans if its deficit-reduction timetable was disrupted by strikes.
Union leaders met on Friday to discuss the possibility of co-ordinating strikes against the public spending cuts and the TUC has organised a protest in London on 26 March, three days after the budget, which it hopes will attract 1 million demonstrators.
Osborne repeated earlier warnings that union law could be changed.
"We are prepared to consider changes to the law around strikes – as a last resort – but I hope we never get there because I hope we can have a mature, grown-up conversation," he told BBC1's Politics Show.
"I completely understand that trade unions want to represent the interests of their members, but the interests of their members is that jobs are created and prosperity returns to our country".
Speaking at the end of a week in which the government was rocked by an unexpected contraction in the British economy in the last quarter of 2010, Osborne said he hoped growth would come from debt reduction, cutting corporate tax rates and reforms to health and education.
He said: "The challenge for the government in the next year or so is to remove the supply-side obstacles to growth.
"The [other] challenge to me is that UK corporates are sitting on cash on their balance sheets equivalent to about 5% of GDP. What I've got to do in the next few months is to persuade them to start spending that money."The shadow chancellor, Ed Balls, dismissed the government's growth plan and accused the chancellor of being in denial.
On BBC1's Andrew Marr Show, Balls stopped short of predicting another quarter of negative growth but he warned the VAT increase imposed earlier this month made the economy's chances of recovery more unlikely and he called for the government to think again.
Balls pointed out that the US economy, which has not embarked on deficit reduction yet, grew towards the end of last year.
Balls also questioned a statement made on Tuesday by the governor of the Bank of England, Mervyn King, who called the government's deficit reduction timetable the "right course".
He said: "I don't think that Mervyn King, in his heart of hearts, really believes that crushing the economy in this way is the right way to get the economy moving."
Asked if he thought King had been leaned on by the government, Balls said: "I think the governor is being loyal."
Osborne said he felt a "huge responsibility" to make the right decisions for Britain. "I'm fulfilling it to the best of my ability, doing what I think is required for Britain," he told the BBC. "So we are doing those things, they are not easy, they are not easy for families, I completely understand that. But frankly, when you look at the mess we inherited, we didn't have many other options.
When asked why he did not modify the government's deficit-reduction timetable, he said: "If I went to parliament and got up at the despatch box in the House of Commons and said, 'I am abandoning the deficit-reduction plan that Britain set out last year.' What do you think the reaction would be? Within minutes Britain would be in financial turmoil. I'm not prepared to let that happen. It requires tough, difficult decisions. No politician likes cutting spending, increasing people's taxes, but I was delivered a mess by the previous government and I'm trying to clear it up."
The government will tomorrow announce one element of its growth strategy. The employment minister, Chris Grayling, will say that six "enterprise clubs" will be created around the country where established businesses will share their experience with unemployed people, providing them with advice they might not otherwise be able to afford.
Grayling will launch the first club in St Helens, Merseyside, with the head of the British chambers of commerce, David Frost. They will also launch a new enterprise allowance to provide financial help and mentoring to those who have been unemployed for more than six months. They aim to support up to 40,000 new businesses in this way.
Source: http://www.guardian.co.uk
Thursday, January 27, 2011
A quick, easy step toward economic recovery
As the new Congress and the Obama administration get down to business, most Americans are looking for two things from Washington: jobs and bipartisanship.
There are no easy answers, but there is one thing that Congress and the administration can do quickly to boost job growth and demonstrate that bipartisan cooperation: Ratify the U.S.-Korea Free Trade Agreement. By giving U.S. companies greater access to one of Asia’s fast-growing markets, the agreement will generate jobs and economic growth across nearly every sector of the U.S. economy.
The U.S. International Trade Commission estimates that the trade pact would create more than 70,000 American jobs and increase U.S. exports by as much as $11 billion. Those estimates are conservative because they consider only the impact of reducing existing tariffs on U.S. exports. Eliminating procurement requirements and other legal restrictions that favor Korean companies — and effectively shut out U.S. firms — would create additional American jobs.
Ratifying the U.S.-Korea agreement is also vitally important to American strategic and economic interests in Asia. Fast-growing Asian economies are leading the way to a global economy recovery, but the United States is being left behind.
The European Union and other governments are working hard to increase their share of Asian trade, often at the expense of the U.S. When the new EU-Korea trade agreement takes effect on July 1, companies from EU nations will be able to sell products to South Korea tariff-free. Without a U.S.-Korea agreement, American companies will continue to be saddled with tariffs ranging from 6.6 percent to 49 percent.
At the same time, Asian nations are trading more freely with each other, making South Korea less reliant on U.S. imports to meet the country’s growing consumer demand. In 2003, the United States was South Korea’s biggest trading partner. We are now fourth, behind China, Japan and the European Union. Our share of South Korea’s import market has dropped from 21 percent to about nine percent.
It’s a worrisome trend, given the direct link between exports and jobs. By some estimates, every one percent increase in U.S. exports generates about 250,000 American jobs. Quite simply, it would be shortsighted to not lower trade barriers to more of our products and services, thereby creating more jobs. South Korea is America’s seventh largest trading partner, with U.S. exports ranging from cars to corn, from footwear to fish. According to the National Association of Manufacturers, the export of goods to South Korea currently supports more than 200,000 U.S. jobs.
The sale of U.S. communications and information technology accounts for nearly $10 billion in exports to South Korea annually. But to complete those sales, U.S. companies paid about $380 million in duties. The trade agreement would eliminate tariffs for nearly all information technology and communications exports. It would also ensure better protections for intellectual property, and establish a legal framework and transparency for new investments.
Technology and innovation are the twin pillars of a global economic rebound. Breaking down barriers that inhibit the spread of technology makes businesses more productive, encourages economic growth and improves daily life for people across the planet. And because the United States leads the world in information technology, it has the most to gain.
President Obama has pledged to submit the U.S.-Korea Trade Agreement to Congress early this year. When he does, Congress should approve it quickly. The administration and Congress should also complete work as quickly as possible on similar pending agreements with Colombia and Panama.
While those trade agreements would not have as large an economic impact as the U.S.-Korea pact, they would generate trade and American jobs. They also would contribute to stability and economic growth for our allies in Latin America.
Of course, there are many other ways to support an effective growth-and-jobs agenda built on trade, innovation and global engagement.
For America’s long-term financial security, we need to improve our education system, especially in math, science and technology. We need a tax code that encourages innovation and ensures that U.S. companies remain globally competitive. We need to put entitlement spending on a more sustainable path.
But if the 112th Congress and the Obama administration want to do something quickly to show that they can work together to create jobs, there is an easy solution — ratify the free trade agreements for South Korea, Colombia and Panama.
Source: http://thehill.com
There are no easy answers, but there is one thing that Congress and the administration can do quickly to boost job growth and demonstrate that bipartisan cooperation: Ratify the U.S.-Korea Free Trade Agreement. By giving U.S. companies greater access to one of Asia’s fast-growing markets, the agreement will generate jobs and economic growth across nearly every sector of the U.S. economy.
The U.S. International Trade Commission estimates that the trade pact would create more than 70,000 American jobs and increase U.S. exports by as much as $11 billion. Those estimates are conservative because they consider only the impact of reducing existing tariffs on U.S. exports. Eliminating procurement requirements and other legal restrictions that favor Korean companies — and effectively shut out U.S. firms — would create additional American jobs.
Ratifying the U.S.-Korea agreement is also vitally important to American strategic and economic interests in Asia. Fast-growing Asian economies are leading the way to a global economy recovery, but the United States is being left behind.
The European Union and other governments are working hard to increase their share of Asian trade, often at the expense of the U.S. When the new EU-Korea trade agreement takes effect on July 1, companies from EU nations will be able to sell products to South Korea tariff-free. Without a U.S.-Korea agreement, American companies will continue to be saddled with tariffs ranging from 6.6 percent to 49 percent.
At the same time, Asian nations are trading more freely with each other, making South Korea less reliant on U.S. imports to meet the country’s growing consumer demand. In 2003, the United States was South Korea’s biggest trading partner. We are now fourth, behind China, Japan and the European Union. Our share of South Korea’s import market has dropped from 21 percent to about nine percent.
It’s a worrisome trend, given the direct link between exports and jobs. By some estimates, every one percent increase in U.S. exports generates about 250,000 American jobs. Quite simply, it would be shortsighted to not lower trade barriers to more of our products and services, thereby creating more jobs. South Korea is America’s seventh largest trading partner, with U.S. exports ranging from cars to corn, from footwear to fish. According to the National Association of Manufacturers, the export of goods to South Korea currently supports more than 200,000 U.S. jobs.
The sale of U.S. communications and information technology accounts for nearly $10 billion in exports to South Korea annually. But to complete those sales, U.S. companies paid about $380 million in duties. The trade agreement would eliminate tariffs for nearly all information technology and communications exports. It would also ensure better protections for intellectual property, and establish a legal framework and transparency for new investments.
Technology and innovation are the twin pillars of a global economic rebound. Breaking down barriers that inhibit the spread of technology makes businesses more productive, encourages economic growth and improves daily life for people across the planet. And because the United States leads the world in information technology, it has the most to gain.
President Obama has pledged to submit the U.S.-Korea Trade Agreement to Congress early this year. When he does, Congress should approve it quickly. The administration and Congress should also complete work as quickly as possible on similar pending agreements with Colombia and Panama.
While those trade agreements would not have as large an economic impact as the U.S.-Korea pact, they would generate trade and American jobs. They also would contribute to stability and economic growth for our allies in Latin America.
Of course, there are many other ways to support an effective growth-and-jobs agenda built on trade, innovation and global engagement.
For America’s long-term financial security, we need to improve our education system, especially in math, science and technology. We need a tax code that encourages innovation and ensures that U.S. companies remain globally competitive. We need to put entitlement spending on a more sustainable path.
But if the 112th Congress and the Obama administration want to do something quickly to show that they can work together to create jobs, there is an easy solution — ratify the free trade agreements for South Korea, Colombia and Panama.
Source: http://thehill.com
Wednesday, January 26, 2011
Bank of England chief warns of 'choppy' economic recovery
Bank of England boss Mervyn King warns that grim GDP figures serve as a stark reminder of Britain's "choppy" economic recovery and says Britons should expect "uncomfortably high" levels of inflation.
Following yesterday's figures which showed Britain's economy shrank by a shock 0.5 per cent in the final three months of 2010, Mervyn King braced consumers for a bleak financial year.
The Bank Governor said the UK economy was "well placed to return to sustained, balanced growth", but difficult times lay ahead in 2011.
In a speech at Newcastle's Civic Centre last night, the Bank Governor said inflation would rise to "uncomfortable high" levels this year, with a peak of between 4 per cent and 5 per cent over the next few months. Next year inflation would then fall back "quite sharply", Mr King said.
Gross domestic product (GDP) contracted in the in final quarter of 2010, which stoked fears Britain could be heading for a double-dip recession as deep spending cuts are introduced by the government's austerity measures.
It also raises the prospect of stagflation - a period of high inflation coinciding with a stagnating economy.
Last night, Mr King warned that real wages will plunge back to 2005 levels as prices soar and the Government's deficit-busting actions take effect.
Rising unemployment and declines in real earnings will hit spending in the private sector, with the public sector hammered by Government spending cuts.
The Governor said the latest GDP figures "remind us that, as I said last year, the recovery will be choppy.
"Of more immediate concern to the Monetary Policy Committee is that we are experiencing a period of uncomfortably high inflation."
He added: "With the standard rate of VAT rising to 20 per cent this month, and recent further increases in world commodity and energy prices, inflation is likely to rise to somewhere between 4 per cent and 5 per cent over the next few months, before falling back next year."
Despite the warning Mr King appeared to downplay the changes of the Bank of England raising interest rates any time soon.
The Organisation for Economic Co-operation and Development (OECD) backed the Government's economic approach and cuts package today.
Secretary General Angel Gurria told BBC Radio 4's Today programme: "They should stay the course. The package was an ambitious package, which was what was necessary. The fiscal situation of the UK absolutely requires this approach.
"Without it, there will be no medium or long-term growth."
Source: http://www.channel4.com
Following yesterday's figures which showed Britain's economy shrank by a shock 0.5 per cent in the final three months of 2010, Mervyn King braced consumers for a bleak financial year.
The Bank Governor said the UK economy was "well placed to return to sustained, balanced growth", but difficult times lay ahead in 2011.
In a speech at Newcastle's Civic Centre last night, the Bank Governor said inflation would rise to "uncomfortable high" levels this year, with a peak of between 4 per cent and 5 per cent over the next few months. Next year inflation would then fall back "quite sharply", Mr King said.
Gross domestic product (GDP) contracted in the in final quarter of 2010, which stoked fears Britain could be heading for a double-dip recession as deep spending cuts are introduced by the government's austerity measures.
It also raises the prospect of stagflation - a period of high inflation coinciding with a stagnating economy.
Last night, Mr King warned that real wages will plunge back to 2005 levels as prices soar and the Government's deficit-busting actions take effect.
Rising unemployment and declines in real earnings will hit spending in the private sector, with the public sector hammered by Government spending cuts.
The Governor said the latest GDP figures "remind us that, as I said last year, the recovery will be choppy.
"Of more immediate concern to the Monetary Policy Committee is that we are experiencing a period of uncomfortably high inflation."
He added: "With the standard rate of VAT rising to 20 per cent this month, and recent further increases in world commodity and energy prices, inflation is likely to rise to somewhere between 4 per cent and 5 per cent over the next few months, before falling back next year."
Despite the warning Mr King appeared to downplay the changes of the Bank of England raising interest rates any time soon.
The Organisation for Economic Co-operation and Development (OECD) backed the Government's economic approach and cuts package today.
Secretary General Angel Gurria told BBC Radio 4's Today programme: "They should stay the course. The package was an ambitious package, which was what was necessary. The fiscal situation of the UK absolutely requires this approach.
"Without it, there will be no medium or long-term growth."
Source: http://www.channel4.com
Tuesday, January 25, 2011
FTSE slips as UK economic recovery stalls
UK shares slipped on Tuesday, as official data showed that Britain’s economy unexpectedly shrank in the fourth quarter, stoking fears of a return to recession.
By 10:10am the FTSE 100 index of blue-chip shares was 0.63% lower to 5,906. The Mid-250 index fell 0.82% to 11,478.
The Office for National Statistics (ONS) said earlier that the UK economy contracted by 0.5% in the last quarter of 2010. Economists had forecast the figures on UK gross domestic product – the broadest measure of economic activity – to come in at 0.5%, according to Reuters.
In the wake of the data, sterling was down 1% against the dollar, at $1.58, and down 0.9% against the euro, at €1.16.
According to the statistics bureau, business services and finance, construction and distribution, hotels and restaurants were the largest contributors to the negative growth this quarter.
ONS said output fell 3.3% in the construction sector and 0.5% in the service industries; however, output rose 0.9% in production industries.
'It's clearly a shocking outurn and the ONS stated that the weather counts for most of the decline in output,' said Amit Kara, analyst at bank UBS.
'From a monetary policy perspective though, we feel that the committee will find it very difficult to embark on an early rate hiking cycle with data such as this, and as such we are comfortable with out Q3 rate hike view.'
The analyst was referring to the Bank of England's key rate-setting panel, which has kept interest rates at historic lows to prop up the UK economy. The Bank has come under pressure recently amid mounting concern over inflation. Mervyn King, the central bank's governor, will have a chance to answer his critics in a key speech on Tuesday night.
Financial and resources stocks were the biggest losers on the FTSE 100. Copper miner Kazakhmys fell 46p to £15.12 and banking group Lloyds slid 2p to 63p.
Source: http://www.citywire.co.uk
By 10:10am the FTSE 100 index of blue-chip shares was 0.63% lower to 5,906. The Mid-250 index fell 0.82% to 11,478.
The Office for National Statistics (ONS) said earlier that the UK economy contracted by 0.5% in the last quarter of 2010. Economists had forecast the figures on UK gross domestic product – the broadest measure of economic activity – to come in at 0.5%, according to Reuters.
In the wake of the data, sterling was down 1% against the dollar, at $1.58, and down 0.9% against the euro, at €1.16.
According to the statistics bureau, business services and finance, construction and distribution, hotels and restaurants were the largest contributors to the negative growth this quarter.
ONS said output fell 3.3% in the construction sector and 0.5% in the service industries; however, output rose 0.9% in production industries.
'It's clearly a shocking outurn and the ONS stated that the weather counts for most of the decline in output,' said Amit Kara, analyst at bank UBS.
'From a monetary policy perspective though, we feel that the committee will find it very difficult to embark on an early rate hiking cycle with data such as this, and as such we are comfortable with out Q3 rate hike view.'
The analyst was referring to the Bank of England's key rate-setting panel, which has kept interest rates at historic lows to prop up the UK economy. The Bank has come under pressure recently amid mounting concern over inflation. Mervyn King, the central bank's governor, will have a chance to answer his critics in a key speech on Tuesday night.
Financial and resources stocks were the biggest losers on the FTSE 100. Copper miner Kazakhmys fell 46p to £15.12 and banking group Lloyds slid 2p to 63p.
Source: http://www.citywire.co.uk
Monday, January 24, 2011
Merseyside faces longer economic recovery, says report
People in two parts of Merseyside are unlikely to feel the benefits of economic recovery until some time after the rest of the UK, a report has found.
Research group Centre for Cities named Birkenhead and Liverpool as areas most vulnerable to spending cuts and said they might need government support.
It cites the relatively high number of public sector jobs and benefit claimants among its evidence.
Wirral Council said it was working hard to attract more private investment.
The Centre for Cities study found that more than one in three jobs in private companies were provided in 11 cities, including Liverpool and Manchester.
However, the cities "vulnerable" to spending cuts would need extra financial support and a "realistic" local plan of action, the group said.
Birkenhead was identified as the most vulnerable area of the country, followed by Liverpool, Newport, Swansea and Sunderland.
Chief executive Alexandra Jones said: "During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector.
"These cities will need realistic plans of action to ride out the spending cuts and create jobs - but they will also need additional financial support from central government."
Council initiatives
In a statement, Wirral Council's member for regeneration, councillor Andrew Hobson, said the authority had a number of initiatives to attract business - and highlighted the £4.5bn Wirral Waters scheme as a potential creator of jobs.
"We are working hard to support businesses in Wirral and to attract more private sector investment into areas like Birkenhead so that we can re-balance our economy and be less dependent on public sector jobs," said Mr Hobson.
"Indeed in the last 18 months we have helped create over 300 jobs for young people at a time when youth unemployment is at an all time high.
"We will continue to do all we can to support our existing businesses whilst also attracting new investment through our developing links with China and the marketing of the £4.5bn Wirral Waters site, which will create over 20,000 jobs at the heart of our most deprived communities."
Councillor Joe Anderson, leader of Liverpool City Council, said the report highlighted the "huge disadvantages" placed on the city by what he described as "disproportionate spending cuts".
"It's crucial that we reduce the city's reliance on the public sector," said Mr Anderson, who added that the city was making "great strides" in forging more private sector links.
"Our presence at Shanghai World Expo and the establishment of The Liverpool Embassy in London are two fantastic examples of how we are doing things differently, and drawing on the city's strengths to attract vital private investment," he said.
"At the same time, we will continue to lobby the government over these unfair cuts. We are asking them to spread the reduction in spending across the life of this Parliament, to give us the chance to help ourselves."
Source: http://www.bbc.co.uk
Research group Centre for Cities named Birkenhead and Liverpool as areas most vulnerable to spending cuts and said they might need government support.
It cites the relatively high number of public sector jobs and benefit claimants among its evidence.
Wirral Council said it was working hard to attract more private investment.
The Centre for Cities study found that more than one in three jobs in private companies were provided in 11 cities, including Liverpool and Manchester.
However, the cities "vulnerable" to spending cuts would need extra financial support and a "realistic" local plan of action, the group said.
Birkenhead was identified as the most vulnerable area of the country, followed by Liverpool, Newport, Swansea and Sunderland.
Chief executive Alexandra Jones said: "During 2011, the UK cities most dependent on the public sector, and which have seen slower economic growth over the last decade, will find it more difficult to rebalance towards the private sector.
"These cities will need realistic plans of action to ride out the spending cuts and create jobs - but they will also need additional financial support from central government."
Council initiatives
In a statement, Wirral Council's member for regeneration, councillor Andrew Hobson, said the authority had a number of initiatives to attract business - and highlighted the £4.5bn Wirral Waters scheme as a potential creator of jobs.
"We are working hard to support businesses in Wirral and to attract more private sector investment into areas like Birkenhead so that we can re-balance our economy and be less dependent on public sector jobs," said Mr Hobson.
"Indeed in the last 18 months we have helped create over 300 jobs for young people at a time when youth unemployment is at an all time high.
"We will continue to do all we can to support our existing businesses whilst also attracting new investment through our developing links with China and the marketing of the £4.5bn Wirral Waters site, which will create over 20,000 jobs at the heart of our most deprived communities."
Councillor Joe Anderson, leader of Liverpool City Council, said the report highlighted the "huge disadvantages" placed on the city by what he described as "disproportionate spending cuts".
"It's crucial that we reduce the city's reliance on the public sector," said Mr Anderson, who added that the city was making "great strides" in forging more private sector links.
"Our presence at Shanghai World Expo and the establishment of The Liverpool Embassy in London are two fantastic examples of how we are doing things differently, and drawing on the city's strengths to attract vital private investment," he said.
"At the same time, we will continue to lobby the government over these unfair cuts. We are asking them to spread the reduction in spending across the life of this Parliament, to give us the chance to help ourselves."
Source: http://www.bbc.co.uk
Sunday, January 23, 2011
Leading Indicators Index in U.S. Increases More Than Forecast
The index of U.S. leading economic indicators increased in December more than forecast, a sign the recovery will gather steam in the new year.
The Conference Board’s gauge of the outlook for the next three to six months rose 1.0 percent after a 1.1 percent gain in November, the New York-based group said today. The December reading, the sixth consecutive monthly increase, exceeded the 0.6 percent gain in the median forecast of economists surveyed by Bloomberg News.
Improved consumer expectations, fewer firings and rising stock prices are boosting the outlook for household spending, the biggest part of the economy. Even so, Federal Reserve policy makers have indicated that until faster economic growth fuels bigger job gains, they will stick to their plan to pump $600 billion into the economy through June.
“Most indicators are suggesting a pretty good head of momentum here,” James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, Minnesota, said before the report. “As confidence goes up, so does economic aggressiveness, and that will add to growth.”
The median forecast was based on a survey of 58 estimates that ranged from gains of 0.4 percent to 1.2 percent.
The biggest contributors to the increase in the leading index were a gain in building permits, the spread between short- and long-term interest rates, a drop in jobless claims, rising stock prices and improved consumer expectations.
Six of 10
Today’s report showed six of the 10 components contributed to the increase. Faster supplier deliveries and slower manufacturers’ orders for consumer goods and materials decreased.
The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.2 percent in December after a 0.1 percent increase in November. The measure tracks payrolls, incomes, sales and production -- the gauges used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.
The index of lagging indicators rose 0.3 percent last month. This measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit.
Evidence the economic recovery is advancing has driven up U.S. stock prices. The Standard & Poor’s 500 Index gained 25 percent through yesterday since reaching a 10-month low on July 2. The gauge was up 1.9 percent so far in January.
Fed’s Bernanke
Fed Chairman Ben S. Bernanke said last week that “we see the economy strengthening,” while adding, “you’re not going to reduce unemployment at the pace that we’d like it to.” Fed Bank of St. Louis President James Bullard said in an interview that while the U.S. outlook has improved, he wants to see more evidence before altering the Fed’s plan to buy $600 billion in Treasuries through June.
Seven of the 10 measures that make up the Conference Board’s leading index are known ahead of time: stock prices, jobless claims, building permits, consumer expectations, the yield curve, factory hours and supplier delivery times.
The Conference Board estimates new orders for consumer goods, bookings for capital equipment and money supply adjusted for inflation.
President Barack Obama signed into law an $858 billion bill on Dec. 17 extending Bush-era tax cuts for two years. The measure also renewed emergency jobless benefits for the long- term unemployed, cut 2011 payroll taxes by two percentage points and allows firms to depreciate 100 percent of capital expenditures over the course of 2011.
Tax Package
Economist John Herrmann at State Street Global Markets LLC in Boston said the tax package will boost consumer spending in early 2011 while Joe Lavorgna at Deutsche Bank Securities Inc. says the tax depreciation will boost capital spending.
Household spending this year will climb 3 percent, the most since 2005, according to the median forecast of economists surveyed this month. That’s up from a 2.6 percent median estimate in the December survey, before the legislation was signed.
The pickup in consumer spending complements factory growth that helped bring the economy out of the worst recession since the 1930s. Also boosting manufacturing, exports rose in November to the highest level since August 2008, according to Commerce Department data released Jan. 13.
Technology producers such as Intel Corp. are benefiting from increased capital spending. Intel Corp.’s sales may rise 10 percent this year, Chief Financial Officer Stacy Smith said in a Jan. 13 interview. The remarks came after the world’s largest maker of computer chips forecast first-quarter sales that may exceed analysts’ estimates. Santa Clara, California-based Intel had revenue of $43.6 billion in 2010, an increase of 24 percent from 2009.
“In 2011, everything gets better,” Paul Otellini, the company’s chief executive officer, said on a teleconference with analysts. “The economy is forecast to improve.”
Source: www.bloomberg.com
The Conference Board’s gauge of the outlook for the next three to six months rose 1.0 percent after a 1.1 percent gain in November, the New York-based group said today. The December reading, the sixth consecutive monthly increase, exceeded the 0.6 percent gain in the median forecast of economists surveyed by Bloomberg News.
Improved consumer expectations, fewer firings and rising stock prices are boosting the outlook for household spending, the biggest part of the economy. Even so, Federal Reserve policy makers have indicated that until faster economic growth fuels bigger job gains, they will stick to their plan to pump $600 billion into the economy through June.
“Most indicators are suggesting a pretty good head of momentum here,” James Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, Minnesota, said before the report. “As confidence goes up, so does economic aggressiveness, and that will add to growth.”
The median forecast was based on a survey of 58 estimates that ranged from gains of 0.4 percent to 1.2 percent.
The biggest contributors to the increase in the leading index were a gain in building permits, the spread between short- and long-term interest rates, a drop in jobless claims, rising stock prices and improved consumer expectations.
Six of 10
Today’s report showed six of the 10 components contributed to the increase. Faster supplier deliveries and slower manufacturers’ orders for consumer goods and materials decreased.
The Conference Board’s index of coincident indicators, a gauge of current economic activity, rose 0.2 percent in December after a 0.1 percent increase in November. The measure tracks payrolls, incomes, sales and production -- the gauges used by the National Bureau of Economic Research to determine the beginning and end of U.S. recessions.
The index of lagging indicators rose 0.3 percent last month. This measures business lending, length of unemployment, service prices and ratios of labor costs, inventories and consumer credit.
Evidence the economic recovery is advancing has driven up U.S. stock prices. The Standard & Poor’s 500 Index gained 25 percent through yesterday since reaching a 10-month low on July 2. The gauge was up 1.9 percent so far in January.
Fed’s Bernanke
Fed Chairman Ben S. Bernanke said last week that “we see the economy strengthening,” while adding, “you’re not going to reduce unemployment at the pace that we’d like it to.” Fed Bank of St. Louis President James Bullard said in an interview that while the U.S. outlook has improved, he wants to see more evidence before altering the Fed’s plan to buy $600 billion in Treasuries through June.
Seven of the 10 measures that make up the Conference Board’s leading index are known ahead of time: stock prices, jobless claims, building permits, consumer expectations, the yield curve, factory hours and supplier delivery times.
The Conference Board estimates new orders for consumer goods, bookings for capital equipment and money supply adjusted for inflation.
President Barack Obama signed into law an $858 billion bill on Dec. 17 extending Bush-era tax cuts for two years. The measure also renewed emergency jobless benefits for the long- term unemployed, cut 2011 payroll taxes by two percentage points and allows firms to depreciate 100 percent of capital expenditures over the course of 2011.
Tax Package
Economist John Herrmann at State Street Global Markets LLC in Boston said the tax package will boost consumer spending in early 2011 while Joe Lavorgna at Deutsche Bank Securities Inc. says the tax depreciation will boost capital spending.
Household spending this year will climb 3 percent, the most since 2005, according to the median forecast of economists surveyed this month. That’s up from a 2.6 percent median estimate in the December survey, before the legislation was signed.
The pickup in consumer spending complements factory growth that helped bring the economy out of the worst recession since the 1930s. Also boosting manufacturing, exports rose in November to the highest level since August 2008, according to Commerce Department data released Jan. 13.
Technology producers such as Intel Corp. are benefiting from increased capital spending. Intel Corp.’s sales may rise 10 percent this year, Chief Financial Officer Stacy Smith said in a Jan. 13 interview. The remarks came after the world’s largest maker of computer chips forecast first-quarter sales that may exceed analysts’ estimates. Santa Clara, California-based Intel had revenue of $43.6 billion in 2010, an increase of 24 percent from 2009.
“In 2011, everything gets better,” Paul Otellini, the company’s chief executive officer, said on a teleconference with analysts. “The economy is forecast to improve.”
Source: www.bloomberg.com
Saturday, January 22, 2011
Report: Economic recovery increases traffic congestion
After two years of slight declines in overall traffic congestion as a result of the economic downturn and high fuel prices, a new report from the Texas Transportation Institute (TTI) at Texas A&M University in College Station, Texas, says that leading indicators suggest that, as the economy rebounds, traffic problems are doing the same. However, TTI's 2010 Urban Mobility Report (UMR) drew criticism from Washington-based Transportation for America Director James Corless, who says flaws in the report's analysis could "lead to faulty conclusions about what the report indicates."
The UMR analyzes traffic congestion in 439 U.S. urban areas. It found that, while congestion and its effects lessened somewhat in 2008, the problem again began to grow in 2009. Congestion costs continue to rise, from $24 billion in 1982 to $115 billion in 2009 as measured in constant 2009 dollars.
The cost to the average commuter rose from $351 in 1982 to $808 in 2009 (figure adjusted for inflation). The total amount of wasted fuel in 2009 topped 3.9 billion gallons – equal to 130 days of flow in the Alaska Pipeline. Yearly peak delay for the average commuter was 34 hours in 2009, up from 14 hours in 1982.
The UMR also discusses the congestion reduction benefits of two solutions — public transportation and roadway operations. Without public transportation services, travelers would have suffered an additional 785 million hours of delay and consumed 640 million more gallons of fuel — a savings of $19 billion in congestion costs, according to the report. Roadway operational treatments that improve the flow of traffic, such as incident management systems, ramp metering and left hand turn lanes, save travelers 320 million hours of delay and 265 million gallons of fuel for a congestion cost savings of $8 billion.
The UMR recommends that transportation officials add roadway and public transportation capacity in the places where it is needed most; encourage ideas like ridesharing and flexible work times to avoid traditional rush hours; and provide more choices, such as alternate routes, telecommuting and toll lanes for faster and more reliable trips.
However, Corless said in a statement that the UMR puts too much emphasis on increasing highway and road capacity. "[The UMR] assumes, for example, that everyone should be able to speed as rapidly down the highway during rush hour as they could in the middle of the night. American taxpayers will never stand for being asked to turn over their wallets and their neighborhoods in order to build that kind of highway capacity," Corless says. "They would much rather see Congress make more efficient use of their money by fixing crumbling roads and bridges; investing in technology to manage existing freeway traffic better; providing rail and rapid bus service in congested corridors; and linking transportation funding to smarter planning and development."
Source: http://americancityandcounty.com
The UMR analyzes traffic congestion in 439 U.S. urban areas. It found that, while congestion and its effects lessened somewhat in 2008, the problem again began to grow in 2009. Congestion costs continue to rise, from $24 billion in 1982 to $115 billion in 2009 as measured in constant 2009 dollars.
The cost to the average commuter rose from $351 in 1982 to $808 in 2009 (figure adjusted for inflation). The total amount of wasted fuel in 2009 topped 3.9 billion gallons – equal to 130 days of flow in the Alaska Pipeline. Yearly peak delay for the average commuter was 34 hours in 2009, up from 14 hours in 1982.
The UMR also discusses the congestion reduction benefits of two solutions — public transportation and roadway operations. Without public transportation services, travelers would have suffered an additional 785 million hours of delay and consumed 640 million more gallons of fuel — a savings of $19 billion in congestion costs, according to the report. Roadway operational treatments that improve the flow of traffic, such as incident management systems, ramp metering and left hand turn lanes, save travelers 320 million hours of delay and 265 million gallons of fuel for a congestion cost savings of $8 billion.
The UMR recommends that transportation officials add roadway and public transportation capacity in the places where it is needed most; encourage ideas like ridesharing and flexible work times to avoid traditional rush hours; and provide more choices, such as alternate routes, telecommuting and toll lanes for faster and more reliable trips.
However, Corless said in a statement that the UMR puts too much emphasis on increasing highway and road capacity. "[The UMR] assumes, for example, that everyone should be able to speed as rapidly down the highway during rush hour as they could in the middle of the night. American taxpayers will never stand for being asked to turn over their wallets and their neighborhoods in order to build that kind of highway capacity," Corless says. "They would much rather see Congress make more efficient use of their money by fixing crumbling roads and bridges; investing in technology to manage existing freeway traffic better; providing rail and rapid bus service in congested corridors; and linking transportation funding to smarter planning and development."
Source: http://americancityandcounty.com
Friday, January 21, 2011
Will the Economic Recovery Slide on $90 Oil?
The U.S. economy has just started to gain some steam, with manufacturers' humming, exports rising and companies finally adding jobs. But now high oil prices threaten to derail the fragile recovery.
The price of oil, which has stood above $80 per barrel for months, recently cleared the $90 mark. And the rise has not gone unnoticed in public-policy circles. The International Energy Agency, an energy-policy adviser to 28 countries and others, says the costly crude prices jeopardize not only the U.S. economy but also the global recovery.
"Oil prices are entering a dangerous zone for the global economy," IEA Chief Economist Fatih Birol said in a statement earlier this month. "The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil-consuming countries and to the oil producers."
Birol added that "it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy."
OPEC: Don't Blame Us
Although high oil prices increase the GDP in oil-producing economies, such as Saudi Arabia, Kuwait, Russia and Venezuela, they also increase costs for consumers and businesses. And that lowers GDP growth in oil-consuming nations, with the U.S. at the top of the list. And while the rise of emerging markets, such as China, India, Brazil, Mexico and Russia, means the global economy is less dependent on a growing U.S. economy, a domestic slowdown still would hurt global commerce.
Still, the desire to increase oil production -- and thereby lower prices -- is hardly unanimous. OPEC, which includes 12 countries that produce some 40% of the world's oil, says it's not to blame for the high oil prices.
Contradicting the IEA's position, OPEC's Secretary General Abdalla El-Badri on Jan. 17 rejected the notion that more production was needed. He said the talk of tightness in the oil market was "incorrect," FT.com reported. "At the moment, fundamentals show there is more than enough oil on the market," El-Badri said.
And a day later, OPEC released an official statement chastising the IEA and citing other -- nonproduction -- variables as the biggest reasons for rising prices. "Oil prices have recently been driven by technical matters such as events in Alaska and the North Sea. Also, the weak dollar and speculation have added to this, pushing oil prices higher, especially Brent [oil]," OPEC said.
Indeed, the dollar's value and oil speculators have played roles. Because oil is priced in dollars, its value tends to grow when the dollar weakens, as it has in the last six months. Also, investors use oil as a hedge against a weaker dollar or as an alternative asset, which has helped push crude's price up as well.
Will Oil Prices Stay in the "Dangerous Zone"?
But the growth in global oil demand, which the IEA expects will rise to 89.1 million barrels per day in 2011 from 87.7 million barrels daily in 2010, can't be ignored as a factor in higher crude prices.
In OPEC's defense, the group already has increased oil production recently. The IEA estimates that the cartel pumped 29.58 million barrels per day in December, representing a rise of 250,000 barrels per day from November.
But that hasn't been nearly enough to stem the rising oil prices. After all, the rate of 29.58 million barrels per day remains well below the 32 million barrels per day that OPEC produced in mid-2008, and the IEA estimates that the group is holding out roughly 5 million barrels per day of spare production capacity.
If the dollar strengthens by 20% to 30% -- and stays there -- or stocks see a long-term boom that forces money out of oil, the price of oil would fall. But absent those two trends, it's hard to see how to limit oil price gains without increasing oil production. And that would mean that oil prices would likely move further in to "the dangerous zone" for the U.S. and global economies.
Source: www.dailyfinance.com
The price of oil, which has stood above $80 per barrel for months, recently cleared the $90 mark. And the rise has not gone unnoticed in public-policy circles. The International Energy Agency, an energy-policy adviser to 28 countries and others, says the costly crude prices jeopardize not only the U.S. economy but also the global recovery.
"Oil prices are entering a dangerous zone for the global economy," IEA Chief Economist Fatih Birol said in a statement earlier this month. "The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil-consuming countries and to the oil producers."
Birol added that "it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy."
OPEC: Don't Blame Us
Although high oil prices increase the GDP in oil-producing economies, such as Saudi Arabia, Kuwait, Russia and Venezuela, they also increase costs for consumers and businesses. And that lowers GDP growth in oil-consuming nations, with the U.S. at the top of the list. And while the rise of emerging markets, such as China, India, Brazil, Mexico and Russia, means the global economy is less dependent on a growing U.S. economy, a domestic slowdown still would hurt global commerce.
Still, the desire to increase oil production -- and thereby lower prices -- is hardly unanimous. OPEC, which includes 12 countries that produce some 40% of the world's oil, says it's not to blame for the high oil prices.
Contradicting the IEA's position, OPEC's Secretary General Abdalla El-Badri on Jan. 17 rejected the notion that more production was needed. He said the talk of tightness in the oil market was "incorrect," FT.com reported. "At the moment, fundamentals show there is more than enough oil on the market," El-Badri said.
And a day later, OPEC released an official statement chastising the IEA and citing other -- nonproduction -- variables as the biggest reasons for rising prices. "Oil prices have recently been driven by technical matters such as events in Alaska and the North Sea. Also, the weak dollar and speculation have added to this, pushing oil prices higher, especially Brent [oil]," OPEC said.
Indeed, the dollar's value and oil speculators have played roles. Because oil is priced in dollars, its value tends to grow when the dollar weakens, as it has in the last six months. Also, investors use oil as a hedge against a weaker dollar or as an alternative asset, which has helped push crude's price up as well.
Will Oil Prices Stay in the "Dangerous Zone"?
But the growth in global oil demand, which the IEA expects will rise to 89.1 million barrels per day in 2011 from 87.7 million barrels daily in 2010, can't be ignored as a factor in higher crude prices.
In OPEC's defense, the group already has increased oil production recently. The IEA estimates that the cartel pumped 29.58 million barrels per day in December, representing a rise of 250,000 barrels per day from November.
But that hasn't been nearly enough to stem the rising oil prices. After all, the rate of 29.58 million barrels per day remains well below the 32 million barrels per day that OPEC produced in mid-2008, and the IEA estimates that the group is holding out roughly 5 million barrels per day of spare production capacity.
If the dollar strengthens by 20% to 30% -- and stays there -- or stocks see a long-term boom that forces money out of oil, the price of oil would fall. But absent those two trends, it's hard to see how to limit oil price gains without increasing oil production. And that would mean that oil prices would likely move further in to "the dangerous zone" for the U.S. and global economies.
Source: www.dailyfinance.com
Thursday, January 20, 2011
Canada's Dollar Weakens for a Second Day on Central Bank, Recovery Outlook
The Canadian dollar weakened for a second day after the Bank of Canada indicated future interest- rate increases are on hold because the nation’s economic recovery is threatened by the currency’s climb beyond parity.
The loonie, as the currency is nicknamed, fell against 14 of its 16 most-traded counterparts. It touched 98.38 U.S. cents yesterday, the strongest level since May 29, 2008. Canada led the Group of Seven nations by raising interest rates three times last year, starting June 1. Its currency has appreciated 6 percent against the U.S. dollar since then.
“There had been a lot of speculation recently about a tightening, possibly as early as March,” Mathieu D’Anjou, a senior economist at Desjardins Group, Canada’s biggest credit union, said in a telephone interview from Montreal. “Given what the bank said yesterday, this seems much less probable now. The bank really doesn’t seem in a hurry to boost its target rate, and this has been putting pressure on the currency.”
Canada’s dollar depreciated 0.4 percent to 99.57 cents per U.S. dollar by 5 p.m. in Toronto, compared with 99.13 cents yesterday. One Canadian dollar buys $1.0043.
The central bank predicted in its Monetary Policy Report released today a “modest” economic recovery hampered by a strong currency that limits exports. It said a “gradual” reduction of monetary stimulus through 2012 will keep inflation under control.
The yield on Canada’s 2-year note fell eight basis points to 1.69 percent, the biggest decline since Sept. 7.
Apple Cart
Canadian Finance Minister Jim Flaherty’s decision Jan. 17 to tighten rules in an attempt to curb record household borrowing may allow the Bank of Canada to hold off on raising interest rates before May at the earliest, David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto, said in a note to clients today.
“With the housing market clearly having the air taken out of the balloon, we see no need for the Bank to upset the apple cart any time soon,” Rosenberg wrote. “Our read of the body language is that they do not have a twitchy finger at all.”
Canada’s gross domestic product will grow 2.4 percent this year and 2.8 percent in 2012, the Bank of Canada said yesterday, compared with an October forecast for gains of 2.3 percent this year and 2.6 percent next year.
Yesterday’s statement “was less hawkish than the market had anticipated, with the Bank of Canada highlighting an improved global economic outlook and a better growth profile for Canada,” Camilla Sutton, chief currency strategist at Bank of Nova Scotia’s Scotia Capital unit, wrote in a note to clients. “However, this was offset by the bank’s view that inflationary pressure remains subdued and the impact that a strong Canadian dollar has on restraining exports.”
Crude Oil
Policy makers reiterated yesterday the economy won’t reach full output until the end of 2012, and the core rate of inflation that excludes eight volatile items won’t accelerate to 2 percent until then.
Crude oil for February delivery fell 0.8 percent to $90.63 a barrel on the New York Mercantile Exchange. Canada is the largest supplier of crude to the U.S.
Source: www.bloomberg.com
The loonie, as the currency is nicknamed, fell against 14 of its 16 most-traded counterparts. It touched 98.38 U.S. cents yesterday, the strongest level since May 29, 2008. Canada led the Group of Seven nations by raising interest rates three times last year, starting June 1. Its currency has appreciated 6 percent against the U.S. dollar since then.
“There had been a lot of speculation recently about a tightening, possibly as early as March,” Mathieu D’Anjou, a senior economist at Desjardins Group, Canada’s biggest credit union, said in a telephone interview from Montreal. “Given what the bank said yesterday, this seems much less probable now. The bank really doesn’t seem in a hurry to boost its target rate, and this has been putting pressure on the currency.”
Canada’s dollar depreciated 0.4 percent to 99.57 cents per U.S. dollar by 5 p.m. in Toronto, compared with 99.13 cents yesterday. One Canadian dollar buys $1.0043.
The central bank predicted in its Monetary Policy Report released today a “modest” economic recovery hampered by a strong currency that limits exports. It said a “gradual” reduction of monetary stimulus through 2012 will keep inflation under control.
The yield on Canada’s 2-year note fell eight basis points to 1.69 percent, the biggest decline since Sept. 7.
Apple Cart
Canadian Finance Minister Jim Flaherty’s decision Jan. 17 to tighten rules in an attempt to curb record household borrowing may allow the Bank of Canada to hold off on raising interest rates before May at the earliest, David Rosenberg, chief economist at Gluskin Sheff & Associates in Toronto, said in a note to clients today.
“With the housing market clearly having the air taken out of the balloon, we see no need for the Bank to upset the apple cart any time soon,” Rosenberg wrote. “Our read of the body language is that they do not have a twitchy finger at all.”
Canada’s gross domestic product will grow 2.4 percent this year and 2.8 percent in 2012, the Bank of Canada said yesterday, compared with an October forecast for gains of 2.3 percent this year and 2.6 percent next year.
Yesterday’s statement “was less hawkish than the market had anticipated, with the Bank of Canada highlighting an improved global economic outlook and a better growth profile for Canada,” Camilla Sutton, chief currency strategist at Bank of Nova Scotia’s Scotia Capital unit, wrote in a note to clients. “However, this was offset by the bank’s view that inflationary pressure remains subdued and the impact that a strong Canadian dollar has on restraining exports.”
Crude Oil
Policy makers reiterated yesterday the economy won’t reach full output until the end of 2012, and the core rate of inflation that excludes eight volatile items won’t accelerate to 2 percent until then.
Crude oil for February delivery fell 0.8 percent to $90.63 a barrel on the New York Mercantile Exchange. Canada is the largest supplier of crude to the U.S.
Source: www.bloomberg.com
Monday, January 17, 2011
Investments 'will aid economic recovery in Europe'
Investments could boost European economic recovery, according to a financial expert.
Equity investments could boost fiscal recovery in European markets, it has been suggested.
Product director at Invesco Perpetual Luke Stellini said buying equity funds could prove an important factor in driving economic growth in countries on the continent which have huge debt problems.
"Investment or capex is a very important indicator to monitor as these investment decisions have positive knock-on effects for employment, consumption and tax revenues," he stated.
Mr Stellini added that a period of time is required for highly indebted countries to make fundamental repairs to their balance sheets.
However, he noted that there are "increasingly positive signs" that people are making investments in these areas of the world, which is boosting their economic cycles.
Earlier this month, the European Commission revealed that the growth of the gross domestic product in the EU slowed down in the third quarter of 2010, according to data from the statistical office of the EU Eurostat.
Source: CFG
www.commercialfinancegroup.co.uk
Equity investments could boost fiscal recovery in European markets, it has been suggested.
Product director at Invesco Perpetual Luke Stellini said buying equity funds could prove an important factor in driving economic growth in countries on the continent which have huge debt problems.
"Investment or capex is a very important indicator to monitor as these investment decisions have positive knock-on effects for employment, consumption and tax revenues," he stated.
Mr Stellini added that a period of time is required for highly indebted countries to make fundamental repairs to their balance sheets.
However, he noted that there are "increasingly positive signs" that people are making investments in these areas of the world, which is boosting their economic cycles.
Earlier this month, the European Commission revealed that the growth of the gross domestic product in the EU slowed down in the third quarter of 2010, according to data from the statistical office of the EU Eurostat.
Source: CFG
www.commercialfinancegroup.co.uk
Friday, January 14, 2011
Energy costs 'damaging UK's economic recovery'
High energy costs are damaging the UK's economic recovery, business groups have claimed, placing pressure on the government to address the issue.
The Major Energy Users Council (MEUC) and the Federation of Small Businesses have both told the government that the increase in business energy bills, along with the VAT rise, is harming companies and the UK's potential to recover from the economic downfall.
Andrew Bainbridge, MEUC chairman, said that it was concerned with the "lack of sensitivity" involving extra costs at a time when businesses are struggling to recover from the recession.
Recently the MEUC has created the Carbon Action Group to tackle the rise in fuel prices.
"The jump in petrol prices is part of the government's long-term aspirations to create a low-carbon future," he added.
And John Walker, of the Federation of Small Businesses, called it "unacceptable" that the government had u-turned on its manifesto promise of a fuel stabiliser.
He added that research had revealed that 40% of small businesses believe that the fuel increase will harm their company.
This week saw the launch of Fair Fuel UK, a campaign by the Road Freight Industry to encourage the government to abandon the next scheduled increase in fuel duty and establish a fuel equaliser to prevent future increases occurring.
Posted by Ruth Bradshaw
Source: http://www.uswitch.com
The Major Energy Users Council (MEUC) and the Federation of Small Businesses have both told the government that the increase in business energy bills, along with the VAT rise, is harming companies and the UK's potential to recover from the economic downfall.
Andrew Bainbridge, MEUC chairman, said that it was concerned with the "lack of sensitivity" involving extra costs at a time when businesses are struggling to recover from the recession.
Recently the MEUC has created the Carbon Action Group to tackle the rise in fuel prices.
"The jump in petrol prices is part of the government's long-term aspirations to create a low-carbon future," he added.
And John Walker, of the Federation of Small Businesses, called it "unacceptable" that the government had u-turned on its manifesto promise of a fuel stabiliser.
He added that research had revealed that 40% of small businesses believe that the fuel increase will harm their company.
This week saw the launch of Fair Fuel UK, a campaign by the Road Freight Industry to encourage the government to abandon the next scheduled increase in fuel duty and establish a fuel equaliser to prevent future increases occurring.
Posted by Ruth Bradshaw
Source: http://www.uswitch.com
Thursday, January 13, 2011
Korea's economic recovery losing steam
The nation’s economy has shown signs of losing growth momentum, as the rate slowed in the third quarter of last year among major countries, a report by an international economic body said Friday.
According to the Organization for Economic Cooperation and Development (OECD), Korea’s economy rose 4.5 percent in the July-to-September period compared to the same quarter of the previous year to post the ninth highest growth rate among the 34 member nations.
Korea put up solid numbers in the year-on-year growth rate over the previous two quarters, as its economy gained 8.1 percent and 7.1 percent in the first and second quarters, respectively, to place second and third.
Chile topped the list with 7.1 percent, followed by Turkey at 6.9 percent and Sweden at 6.8 percent, according to the report.
Among major economies, Japan’s advanced sixth-best at 5.0 percent, while the United States saw 3.2 percent and Germany 3.9 percent.
Greece and Ireland, which both suffered in the European sovereign debt crisis, saw their economies shrink.
In the quarter-on-quarter comparison, the nation’s economy added 0.7 percent to fall to 14th place in the standings, the Paris-based organization said.
Asia’s fourth-largest economy ranked first in the first quarter after recording a 2.1 percent expansion and came in eighth at 1.4 percent in the second quarter.
Meanwhile, Japan, whose economy has struggled for a long time, contrasted with Korea, providing a glimpse of strong economic recovery.
Japan also made the top 10 in quarter-to-quarter growth with a 1.1 percent gain, the seventh highest tally.
Analysts attributed the overall slowing economic recovery to the base effect of 2009’s better-than-expected performance, while other nations have come off the recent economic slump since the second half of last year.
“In the latter part of last year, the base effect of the nation’s rapid rebound in 2009 resulted in the economic recovery weakening,” said an official of the Ministry of Strategy and Finance.
“But on the back of solid exports and rising domestic demand, the overall economy of Korea remains brisk.”
Earlier this week, the OECD announced that Korea is suffering the fastest economic slowdown among its members, as the country posted the sharpest drop in a month-on-month comparison of the composite leading index (CLI) in November.
Its leading indicator stood at 101.1 after declining 0.3 of a point from a month earlier and it marked the 11th straight month of contraction.
Korea’s import prices hit 22-month high in Dec.
The nation’s import prices made the biggest jump in 22 months in December, due to rising international raw material prices, the central bank said Friday.
According to the Bank of Korea (BOK), its index of imported goods expanded 12.7 percent last month from a year ago, marking the ninth straight month of price growth.
The reading is the largest year-on-year increase since February 2009, when it advanced 18 percent.
The BOK’s local currency-denominated index of imported goods and materials is widely used to gauge the country’s future inflation trend.
“The latest price increase came due to rocketing world costs for crude oil, iron ore and nonferrous metals like copper and nickel as well as farm produce including corn and raw sugar,” a BOK official said.
In a month-on-month comparison, the price index also soared 4.7 percent last month ― an 18 month high ― compared with a 2.1 percent rise in November, the BOK noted.
The annual import prices grew 5.3 percent last year from 2009, rebounding from a drop of 4.1 percent the previous year.
The bank added that the export price index moved up 4.3 percent last month from the previous year, but the annual index of export prices sank 2.6 percent in 2010 following a 0.2 percent drop in 2009.
Source: http://www.koreatimes.co.kr
According to the Organization for Economic Cooperation and Development (OECD), Korea’s economy rose 4.5 percent in the July-to-September period compared to the same quarter of the previous year to post the ninth highest growth rate among the 34 member nations.
Korea put up solid numbers in the year-on-year growth rate over the previous two quarters, as its economy gained 8.1 percent and 7.1 percent in the first and second quarters, respectively, to place second and third.
Chile topped the list with 7.1 percent, followed by Turkey at 6.9 percent and Sweden at 6.8 percent, according to the report.
Among major economies, Japan’s advanced sixth-best at 5.0 percent, while the United States saw 3.2 percent and Germany 3.9 percent.
Greece and Ireland, which both suffered in the European sovereign debt crisis, saw their economies shrink.
In the quarter-on-quarter comparison, the nation’s economy added 0.7 percent to fall to 14th place in the standings, the Paris-based organization said.
Asia’s fourth-largest economy ranked first in the first quarter after recording a 2.1 percent expansion and came in eighth at 1.4 percent in the second quarter.
Meanwhile, Japan, whose economy has struggled for a long time, contrasted with Korea, providing a glimpse of strong economic recovery.
Japan also made the top 10 in quarter-to-quarter growth with a 1.1 percent gain, the seventh highest tally.
Analysts attributed the overall slowing economic recovery to the base effect of 2009’s better-than-expected performance, while other nations have come off the recent economic slump since the second half of last year.
“In the latter part of last year, the base effect of the nation’s rapid rebound in 2009 resulted in the economic recovery weakening,” said an official of the Ministry of Strategy and Finance.
“But on the back of solid exports and rising domestic demand, the overall economy of Korea remains brisk.”
Earlier this week, the OECD announced that Korea is suffering the fastest economic slowdown among its members, as the country posted the sharpest drop in a month-on-month comparison of the composite leading index (CLI) in November.
Its leading indicator stood at 101.1 after declining 0.3 of a point from a month earlier and it marked the 11th straight month of contraction.
Korea’s import prices hit 22-month high in Dec.
The nation’s import prices made the biggest jump in 22 months in December, due to rising international raw material prices, the central bank said Friday.
According to the Bank of Korea (BOK), its index of imported goods expanded 12.7 percent last month from a year ago, marking the ninth straight month of price growth.
The reading is the largest year-on-year increase since February 2009, when it advanced 18 percent.
The BOK’s local currency-denominated index of imported goods and materials is widely used to gauge the country’s future inflation trend.
“The latest price increase came due to rocketing world costs for crude oil, iron ore and nonferrous metals like copper and nickel as well as farm produce including corn and raw sugar,” a BOK official said.
In a month-on-month comparison, the price index also soared 4.7 percent last month ― an 18 month high ― compared with a 2.1 percent rise in November, the BOK noted.
The annual import prices grew 5.3 percent last year from 2009, rebounding from a drop of 4.1 percent the previous year.
The bank added that the export price index moved up 4.3 percent last month from the previous year, but the annual index of export prices sank 2.6 percent in 2010 following a 0.2 percent drop in 2009.
Source: http://www.koreatimes.co.kr
Wednesday, January 12, 2011
UK MoD needs to plan for economic recovery, says analyst
The UK should look beyond its current defence spending crisis and plan how to cope with budget increases as its economy recovers, a defence analyst has warned.
As the Ministry of Defence (MoD) grapples with the consequences of an eight per cent budget cut made by the Comprehensive Spending Review (CSR) of October 2010, defence and security analyst James Bergeron told a conference at the Royal United Services Institute (RUSI) in London that the UK needs better procurement and "hard-nosed" thinking in the lead-up to 2020.
"Be ready to be able to spend money wisely when it comes your way again," said Bergeron on 10 January. "There is an assumption that the economy will improve [and] governments need to be ready to respond, MoDs need to be ready to respond to the in-rush of cash very quickly.
"If you think not having money is a problem, try having money. That was the experience of the US after 2003 with Iraq, where masses of money was thrown at the Department of Defense."
Source: http://www.janes.com
As the Ministry of Defence (MoD) grapples with the consequences of an eight per cent budget cut made by the Comprehensive Spending Review (CSR) of October 2010, defence and security analyst James Bergeron told a conference at the Royal United Services Institute (RUSI) in London that the UK needs better procurement and "hard-nosed" thinking in the lead-up to 2020.
"Be ready to be able to spend money wisely when it comes your way again," said Bergeron on 10 January. "There is an assumption that the economy will improve [and] governments need to be ready to respond, MoDs need to be ready to respond to the in-rush of cash very quickly.
"If you think not having money is a problem, try having money. That was the experience of the US after 2003 with Iraq, where masses of money was thrown at the Department of Defense."
Source: http://www.janes.com
Tuesday, January 11, 2011
Global economic recovery will pick up pace around April 2011, OECD predicts
GROWTH in economies across several continents is set to accelerate, the Organisation for Economic Co-operation and Development (OECD) said yesterday.
However, economic growth in Britain is merely showing “signs of stabilisation,” the report said.
The OECD’s indicators, measured in November, are designed to anticipate turning points in economic activity six months in advance.
“We expect [British] GDP growth to stabilise at 0.3 per cent in the second and third quarters of 2011,” said IHS Global Insight’s Howard Archer, commenting on the latest figures.
China, the US, France and Japan showed clear signs of increasingly expanding economies, the OECD revealed.
The report’s headline rate for the OECD area increased to 102.8 in November, up from 102.6 in October.
All readings over 100 points indicate growing economic activity.
Brazil was the only country to record an impending economic contraction, with a score of 98.6.
The highest levels were recorded in Germany (104.9) and Russia (105.3).
Source: Cityam
www.cityam.com
However, economic growth in Britain is merely showing “signs of stabilisation,” the report said.
The OECD’s indicators, measured in November, are designed to anticipate turning points in economic activity six months in advance.
“We expect [British] GDP growth to stabilise at 0.3 per cent in the second and third quarters of 2011,” said IHS Global Insight’s Howard Archer, commenting on the latest figures.
China, the US, France and Japan showed clear signs of increasingly expanding economies, the OECD revealed.
The report’s headline rate for the OECD area increased to 102.8 in November, up from 102.6 in October.
All readings over 100 points indicate growing economic activity.
Brazil was the only country to record an impending economic contraction, with a score of 98.6.
The highest levels were recorded in Germany (104.9) and Russia (105.3).
Source: Cityam
www.cityam.com
Monday, January 10, 2011
India’s growth helps global economic recovery: World Bank
Describing India as a global player and rising economic power, World Bank President Robert Zoellick has said the high level of growth in the country is helping the international economy recover from the crippling effects of recent financial turmoil.
“India’s return to high levels of growth is helping the global economy recover from the crisis,” said Mr. Zoellick, who is scheduled to arrive in the country on Monday on a four-day visit aimed at strengthening cooperation between the multilateral lender and Asia’s second-fastest growing economy.
India, he further said, “is a player on the global stage. The country’s status as a rising economic power is closely connected with how it manages this next phase of growth, balancing rapid development with the environment and most importantly, the need to ensure all people have opportunity.”
As per a World Bank release, Mr. Zoellick will meet Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia during the trip. He will also visit Bihar.
Having witnessed a slowdown in growth in the wake of the global financial crisis, India’s growth rate picked up to 7.4 per cent in 2009-10 from 6.7 per cent a year ago. The economy expanded by 8.9 per cent in the first half of the current fiscal, making India one of the fastest growing economies in the world.
According to the International Monetary Fund’s (IMF) projections, the Indian economy is expected to record a growth rate of 8.8 per cent in 2010-11.
Mr. Zoellick’s discussions with the Prime Minister and government will also cover cooperation on global issues, including preparations for the upcoming G-20 meetings.
During his visit, the World Bank President will sign agreements for two new projects in the road and disaster management sectors, as well as meet private sector representatives, self-employed women’s associations and urban and water experts.
The World Bank Group significantly boosted the support extended to India last year to help offset the impact of the global financial crisis. The Bank Group committed a record USD 11.1 billion to India during 2009-10.
Source: The hindu
www.thehindu.com
“India’s return to high levels of growth is helping the global economy recover from the crisis,” said Mr. Zoellick, who is scheduled to arrive in the country on Monday on a four-day visit aimed at strengthening cooperation between the multilateral lender and Asia’s second-fastest growing economy.
India, he further said, “is a player on the global stage. The country’s status as a rising economic power is closely connected with how it manages this next phase of growth, balancing rapid development with the environment and most importantly, the need to ensure all people have opportunity.”
As per a World Bank release, Mr. Zoellick will meet Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee and Planning Commission Deputy Chairman Montek Singh Ahluwalia during the trip. He will also visit Bihar.
Having witnessed a slowdown in growth in the wake of the global financial crisis, India’s growth rate picked up to 7.4 per cent in 2009-10 from 6.7 per cent a year ago. The economy expanded by 8.9 per cent in the first half of the current fiscal, making India one of the fastest growing economies in the world.
According to the International Monetary Fund’s (IMF) projections, the Indian economy is expected to record a growth rate of 8.8 per cent in 2010-11.
Mr. Zoellick’s discussions with the Prime Minister and government will also cover cooperation on global issues, including preparations for the upcoming G-20 meetings.
During his visit, the World Bank President will sign agreements for two new projects in the road and disaster management sectors, as well as meet private sector representatives, self-employed women’s associations and urban and water experts.
The World Bank Group significantly boosted the support extended to India last year to help offset the impact of the global financial crisis. The Bank Group committed a record USD 11.1 billion to India during 2009-10.
Source: The hindu
www.thehindu.com
Sunday, January 9, 2011
Bernanke fears slow US recovery
The US economy is showing signs of a "self-sustaining recovery", but is not growing fast enough to reduce high jobless levels, Federal Reserve chairman Ben Bernanke has said.
Mr Bernanke told the Senate Budget Committee it could take four to five years for the job market to normalise.
As well as unemployment, he said low inflation was also a concern.
"Very low inflation increases the risk that new adverse shocks could push the economy into deflation," he said.
Mr Bernanke was speaking shortly after the release of Labor Department figures showing that the US unemployment rate dropped to 9.4% in December from 9.8% in November, the biggest one-month drop since April 1998.
His comments and the more positive jobs data initially caused share prices to rise.
However, the lower rate came not only because more people found jobs, but also because 260,000 had given up looking and had therefore disappeared from the jobless total.
In later trading on Wall Street shares fell below their opening level.
'Modest' job growth
"We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold," Mr Bernanke told the committee.
However, the labour market had improved "only modestly at best", he added.
"Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery," he continued.
At the same time, inflation was likely to remain "subdued" for some time.
Federal Reserve Governor, Elizabeth Duke, said there was a "lot of slack" in the US economy and the government still needed to support recovery.
"My view would be that we need to have a credible plan for reducing the debt and the deficits over the long run, but not in the immediate time frame. In the immediate time frame, we still need to support a recovery that's just getting started."
'Critical threat'
Mr Bernanke said continuing high unemployment and low inflation had prompted the Fed's decision to purchase another $600bn (£385bn) of US government debt in a bid to stimulate the US economy.
He said the asset purchase scheme was "not comparable to ordinary government spending" and warned that the federal government's huge budget deficit put it on "an unsustainable fiscal path".
He called on Congress to address "this critical threat to our economy".
"Doing nothing will not be an option indefinitely," he said. "The longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be."
However, Mr Bernanke gave no indication whether there would be further buying beyond this scheme.
Lena Komileva, economist at Tullett Prebon, said: "The Fed will not rush for the exit. The potential for further (easing) remains if weak labour and housing activity continue to depress inflation trends."
Source: BBC
www.bbc.co.uk
Mr Bernanke told the Senate Budget Committee it could take four to five years for the job market to normalise.
As well as unemployment, he said low inflation was also a concern.
"Very low inflation increases the risk that new adverse shocks could push the economy into deflation," he said.
Mr Bernanke was speaking shortly after the release of Labor Department figures showing that the US unemployment rate dropped to 9.4% in December from 9.8% in November, the biggest one-month drop since April 1998.
His comments and the more positive jobs data initially caused share prices to rise.
However, the lower rate came not only because more people found jobs, but also because 260,000 had given up looking and had therefore disappeared from the jobless total.
In later trading on Wall Street shares fell below their opening level.
'Modest' job growth
"We have seen increased evidence that a self-sustaining recovery in consumer and business spending may be taking hold," Mr Bernanke told the committee.
However, the labour market had improved "only modestly at best", he added.
"Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery," he continued.
At the same time, inflation was likely to remain "subdued" for some time.
Federal Reserve Governor, Elizabeth Duke, said there was a "lot of slack" in the US economy and the government still needed to support recovery.
"My view would be that we need to have a credible plan for reducing the debt and the deficits over the long run, but not in the immediate time frame. In the immediate time frame, we still need to support a recovery that's just getting started."
'Critical threat'
Mr Bernanke said continuing high unemployment and low inflation had prompted the Fed's decision to purchase another $600bn (£385bn) of US government debt in a bid to stimulate the US economy.
He said the asset purchase scheme was "not comparable to ordinary government spending" and warned that the federal government's huge budget deficit put it on "an unsustainable fiscal path".
He called on Congress to address "this critical threat to our economy".
"Doing nothing will not be an option indefinitely," he said. "The longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be."
However, Mr Bernanke gave no indication whether there would be further buying beyond this scheme.
Lena Komileva, economist at Tullett Prebon, said: "The Fed will not rush for the exit. The potential for further (easing) remains if weak labour and housing activity continue to depress inflation trends."
Source: BBC
www.bbc.co.uk
Thursday, January 6, 2011
UK recovery threatened by weak services sector
Britain's dominant services sector suffered its first contraction in 20 months in December, sparking concerns about the resilience of the economic recovery.
Service companies, which account for three quarters of national output, last month sold less and cut staff, according to the closely-watched Markit/CIPS purchasing managers index (PMI). Following a similar dip in construction output, experts said the UK economy appeared to have shrunk again in December.
Economists were quick to dismiss fears of a double-dip recession, however, pointing out that the services industry would have been particularly susceptible to December’s Arctic weather. The poor figures, though, took the gloss off strong manufacturing data earlier in the week, which showed that factories are growing at their fastest pace in 16 years.
“It seems that the two speed economy is back, but one where manufacturing and services have swapped positions,” said Nida Ali, economic advisor to the Ernst & Young ITEM Club. In the past decade, service industries such as banking have driven UK GDP while manufacturing was in decline.
Although the weather was blamed for the severity of the fall in activity in December, the survey also attributed part of the weakness to falling public sector demand in the face of the Govenrment spending cuts. It noted that this was likely to persist in the months ahead.
Alan Clarke, economist at BNP Paribas, said: “We believe that this helps to explain the divergence between the services sector index and manufacturing. The latter is clearly benefiting from the strengthening in overseas demand. The services sector is probably a greater reflection of the strength of the domestic economy has been less impressive in recent months.”
Chris Williamson, chief economist at Markit, added: “From the three surveys, there is a strong indication that UK economic growth is completely reliant upon export sales while domestic demand has wilted.”
Activity in the services sector slumped from 53 in November to 49.7, where any measure under 50 represents contraction. It was the first sub-50 result since April 2009, when the economy was still in recession. The survey added that “underlying trends remained subdued ... this led to another month of job losses and also served to subdue business confidence”.
It was the third successive month that the sector had reported job losses as hotels, restaurants, caterers and personal services bore the brunt of the weather disruption and flagging demand.
One poor month is not expected to have pushed the economy into contraction for the final quarter of last year, though. Economists held their forecasts for 0.4pc growth, which would deliver around 1.7pc for the year as a whole. Vicky Redwood of Capital Economics, said: “It is notable that firms themselves were not too perturbed, with the business expectations balance rising. Accordingly, activity is likely to rebound this month.”
However, the data contained enough bad news to knock any resurgent confidence. “Bad weather undoubtedly hit service sector business in December, but there are also clear signs that domestic demand has weakened as households and business continued to rein in spending,” Mr Williamson said.
Prices increased at their fastest rate since September 2008 and businesses were not able to pass all of the rise on to customers because of weak demand.
By Philip Aldrick, Economics Editor
Source: http://www.telegraph.co.uk
Service companies, which account for three quarters of national output, last month sold less and cut staff, according to the closely-watched Markit/CIPS purchasing managers index (PMI). Following a similar dip in construction output, experts said the UK economy appeared to have shrunk again in December.
Economists were quick to dismiss fears of a double-dip recession, however, pointing out that the services industry would have been particularly susceptible to December’s Arctic weather. The poor figures, though, took the gloss off strong manufacturing data earlier in the week, which showed that factories are growing at their fastest pace in 16 years.
“It seems that the two speed economy is back, but one where manufacturing and services have swapped positions,” said Nida Ali, economic advisor to the Ernst & Young ITEM Club. In the past decade, service industries such as banking have driven UK GDP while manufacturing was in decline.
Although the weather was blamed for the severity of the fall in activity in December, the survey also attributed part of the weakness to falling public sector demand in the face of the Govenrment spending cuts. It noted that this was likely to persist in the months ahead.
Alan Clarke, economist at BNP Paribas, said: “We believe that this helps to explain the divergence between the services sector index and manufacturing. The latter is clearly benefiting from the strengthening in overseas demand. The services sector is probably a greater reflection of the strength of the domestic economy has been less impressive in recent months.”
Chris Williamson, chief economist at Markit, added: “From the three surveys, there is a strong indication that UK economic growth is completely reliant upon export sales while domestic demand has wilted.”
Activity in the services sector slumped from 53 in November to 49.7, where any measure under 50 represents contraction. It was the first sub-50 result since April 2009, when the economy was still in recession. The survey added that “underlying trends remained subdued ... this led to another month of job losses and also served to subdue business confidence”.
It was the third successive month that the sector had reported job losses as hotels, restaurants, caterers and personal services bore the brunt of the weather disruption and flagging demand.
One poor month is not expected to have pushed the economy into contraction for the final quarter of last year, though. Economists held their forecasts for 0.4pc growth, which would deliver around 1.7pc for the year as a whole. Vicky Redwood of Capital Economics, said: “It is notable that firms themselves were not too perturbed, with the business expectations balance rising. Accordingly, activity is likely to rebound this month.”
However, the data contained enough bad news to knock any resurgent confidence. “Bad weather undoubtedly hit service sector business in December, but there are also clear signs that domestic demand has weakened as households and business continued to rein in spending,” Mr Williamson said.
Prices increased at their fastest rate since September 2008 and businesses were not able to pass all of the rise on to customers because of weak demand.
By Philip Aldrick, Economics Editor
Source: http://www.telegraph.co.uk
Wednesday, January 5, 2011
Rising Oil Prices Threaten Economic Recovery
(Newsroom America) -- Skyrocketing oil prices are threatening to derail a fragile global economic recovery, according to a leading energy watchdog agency, and that could add pressure on the world's producers to ramp up production.
Some members of the Organization of Petroleum Exporting Countries, or OPEC, have said in recent weeks the cartel wanted to see oil prices climb back to about $100 a barrel - a benchmark that is not far off, given Wednesday's price of around $89, according to Quoteoil.com.
But prices at that level and beyond will put substantial downward pressure on the economies of recovering nations, experts believe, as more expensive energy will lead to price increases on nearly all goods.
Already higher oil prices are having an effect on economies, with oil import costs rising dramatically for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development. An analysis by the International Energy Agency found that import costs for those nations rose by $200 billion to $790 billion at the end of 2010, the Financial Times reported.
Not all OPEC members agree that $100 oil is sustainable. Oil ministers from Libya, Iran and Venezuela hvae said they prefer prices at that level, but Saudi Arabia - the world's largest producer - has said it prefers oil prices remained at about $75 a barrel instead.
"An issue for OPEC will obviously be prices edging higher," Bill Farren-Price, chief executive officer of Winchester, U.K.-based consultants Petroleum Policy Intelligence, told Bloomberg. "The issue is whether we’re in a new rally and for now the jury’s out on that. And I don’t think anyone in OPEC would disagree with that."
Source: www.newsroomamerica.com
Some members of the Organization of Petroleum Exporting Countries, or OPEC, have said in recent weeks the cartel wanted to see oil prices climb back to about $100 a barrel - a benchmark that is not far off, given Wednesday's price of around $89, according to Quoteoil.com.
But prices at that level and beyond will put substantial downward pressure on the economies of recovering nations, experts believe, as more expensive energy will lead to price increases on nearly all goods.
Already higher oil prices are having an effect on economies, with oil import costs rising dramatically for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development. An analysis by the International Energy Agency found that import costs for those nations rose by $200 billion to $790 billion at the end of 2010, the Financial Times reported.
Not all OPEC members agree that $100 oil is sustainable. Oil ministers from Libya, Iran and Venezuela hvae said they prefer prices at that level, but Saudi Arabia - the world's largest producer - has said it prefers oil prices remained at about $75 a barrel instead.
"An issue for OPEC will obviously be prices edging higher," Bill Farren-Price, chief executive officer of Winchester, U.K.-based consultants Petroleum Policy Intelligence, told Bloomberg. "The issue is whether we’re in a new rally and for now the jury’s out on that. And I don’t think anyone in OPEC would disagree with that."
Source: www.newsroomamerica.com
Tuesday, January 4, 2011
Get Apple, Google And Get Happy With Gold All The Way To $2K
With a new year upon us, its time to take a look at what 2011 could have in store. 2010 was certainly an eventful year, one full of natural disasters and oil spills, growing distrust of Wall Street and distaste for government, fervent political and economic discourse, inspiring stories and shocking revelations of systematic fraud. But any way you slice it, 2010 was a great year for the stock market. Will the market continue to climb in 2011?
MARKET EVOLUTION
If the past few years are any indication, 2011 will develop its own distinct identity. As our economy entered a painful recession and the housing market faltered, 2007 was the year of the bear. The pain and panic continued in 2008, and gold became the buying opportunity of a lifetime as a safe haven investment. 2009 was an opportunistic investor’s dream. Strong companies traded at a steep discount after the panic selling of the two years prior, and those who were greedy when others were fearful have enjoyed tremendous returns.
We as Americans are beginning to adjust to a “new normal” if you will. We face the reality that we must fight tooth and nail to hold government and corporations accountable. We must change our ways if we are to remain the preeminent world economic superpower. A startling number of eager Americans are still without jobs, a fact that must be addressed if we are to truly drag ourselves out of this rut.
Americans, only a decade ago after enjoying low unemployment, historic economic growth and unrelenting optimism, are now ecstatic to find even part time work. We may just be entering the heart of winter, but springtime is coming.
Special Offer: Gary Shilling’s subscribers cleaned up in government bonds during the financial crisis and housing collapse. What now? Click here for Shilling’s moneymaking strategies for 2011 in his Insight newsletter.
There are two strong factions right now in terms of economics: 1) those who say we need to immediately cut deficits, impose austerity measures, endure the pain, and focus on a more disciplined future, and 2) those who say austerity, right now, would be detrimental to the recovery. We must stay the course, they to say, by continuing to prop up asset prices until the training wheels can come off. Only well down the line can we safely consider cutting deficits.
I fall more into the first group. I believe that any positive economic readings we see that are spun endlessly as signs of a “recovery” are a farce. Common sense says that you cannot perpetually spend more than you have. At some point, the music will stop. There will come a time when the dollar is not the only reserve currency, when foreign governments will not depend so heavily on the United States for their own prosperity, thus will be less forgiving in regards to our self-serving economic policies. We must start preparing for that day.
Economics has been made out to be some secret, ultracomplicated formula that the average American is too simple-minded to understand. In reality, if we followed our “simple” intuition and focused less intensely on growth at all costs, we would be in a much better spot than we are now. When economists make condescending remarks, I ask the question: where has your expertise and leadership gotten us? We need to tug on the reins before its too late.
The other ginormous elephants in the room are the state debt and budget crises. California is close to requiring a bailout or defaulting under their huge debt burden, and several other states are not far behind. This is one of the many stories I believe will take shape starting this year, and how we deal with these crises could determine the pace of the “recovery.”
Special Offer: Curtis Hesler’s readers have been in gold all the way from $300 to $1400, riding triple-digit gains in ETFs, mining stocks and physical gold. Is Hesler still bullish? Click here for his just-released 2011 outlook in Professional Timing Service.
WHAT 2011 WILL BRING FOR THE MARKETS
In my opinion, 2011 will bring a relative return to normalcy. For the markets, I believe it will be the year of the market timer. We will not see huge moves across the board and the bullish action will likely be selective. Take 2011 month by month and quarter by quarter, because the situation could certainly deteriorate or strengthen based on a number of factors. It will be a year to be nimble and flexible with your capital.
My top side target for the S&P 500 in 2011 is 1350-1375, while downside support would be 980-1040 in a reasonable worst case scenario. However, it appears that our government and Federal Reserve will continue to do everything in their power to keep the “recovery” on track, even if much of it is an illusion. At some point, we will have to put an end to the incessant money printing and tighten our belt, and it will be interesting to see how the market reacts to that.
I agree with Meredith Whitney that we will need to pay close attention in order to attempt to time this market. Uncertainty creates opportunity, so while unemployment and housing are huge drags, they are likely close to a bottom if not already there. Technology continues to accelerate while the Nasdaq trades at just more than half of what it did a decade ago.
STOCKS AND SECTORS
Cloud computing stocks have become the latest craze for investors as cloud technology looks set to become the next game changer. We listed VMWare, Inc. (NYSE:VMW) as one of our go-to stocks at the beginning of 2010 and it has more than doubled, while other cloud stocks like Riverbed Technology Inc. (Nasdaq:RVBD) and F5 Networks Inc. (Nasdaq:FFIV), only to name a couple, that we cover also performed well. Cloud stocks recovered from an October disaster and most are making new highs. EMC Corp (NYSE:EMC) is another great pure cloud play.
Rare earth became a hot commodity as China decided to cut export quotas. Many traders made their years trading these wildly volatile (and highly speculative) stocks like MCP, REE, SHZ and AVL. These stocks were a short term trader’s dream. There will be new stocks and sectors that will come into vogue, and you should be flexible and nimble enough with your capital to take advantage of emerging trends.
I also believe your money is in good hands with some tech leaders like Apple Inc. (Nasdaq:AAPL) and Google Inc. (Nasdaq:GOOG), which continue to stay ahead of the technology curve. Both could use a stock split. Facebook, when it does go public, will be another interesting stock to watch. I also believe tech dinosaurs Microsoft Inc. (Nasdaq:MSFT) and Cisco Systems Inc. (Nasdaq:CSCO) could get a boost in 2011 as they reemerge as innovators.
I also believe two of the most downtrodden bank stocks, Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) can revert somewhat to the mean and get to $7-8 and $17-18, respectively.
One story to watch closely is the agricultural group and specifically the fertilizer names. As population growth and affluence in developing countries increase, demand for food will grow considerably while amount of arable land will not. Potash fertilizer is necessary to grow crops where you otherwise could not. That is why PotashCorp of Saskatchewan (NYSE:POT), which controls 20% of the world potash supply, has been subject of various takeover rumors at a significant premium, and why it is one of our favorite plays into 2011. If you want a more diversified agricultural holding, you could consider the Market Vectors Agribusiness ETF (NYSE:MOO), which has performed will since we highlighted it here and we feel will continue to perform well.
Finally, on to Gold. I first mentioned gold on CNBC in 2008, and we hit my stated technical target of $1350 this year. The game has changed though and the gold trade has evolved. I definitely feel gold has more upside, as do other precious metals like Silver. My cautious gold target is $1600-1800/ounce, but I could easily see it moving above $2000. I also believe Japan could be a hot place to be in 2011, which you can play with the ETF EWJ.
CONCLUSION
The market was strong in 2010 after the Fed’s intentions became painfully clear, but the economy is only just showing small signs of a meaningful recovery. There are many challenges that must be met and changes that must be made to in order for us to truly get back on the right track. However, I am an eternal optimist, and despite lingering concerns I believe we are in a great position to emerge from this crisis stronger than we entered it. There will be investing opportunities in 2011 if you remain selective and patient. Evaluate your performance for 2010, redefine your strategy, and commit to being an informed market participant in 2011.
by Scott Redler
Source: http://blogs.forbes.com
MARKET EVOLUTION
If the past few years are any indication, 2011 will develop its own distinct identity. As our economy entered a painful recession and the housing market faltered, 2007 was the year of the bear. The pain and panic continued in 2008, and gold became the buying opportunity of a lifetime as a safe haven investment. 2009 was an opportunistic investor’s dream. Strong companies traded at a steep discount after the panic selling of the two years prior, and those who were greedy when others were fearful have enjoyed tremendous returns.
We as Americans are beginning to adjust to a “new normal” if you will. We face the reality that we must fight tooth and nail to hold government and corporations accountable. We must change our ways if we are to remain the preeminent world economic superpower. A startling number of eager Americans are still without jobs, a fact that must be addressed if we are to truly drag ourselves out of this rut.
Americans, only a decade ago after enjoying low unemployment, historic economic growth and unrelenting optimism, are now ecstatic to find even part time work. We may just be entering the heart of winter, but springtime is coming.
Special Offer: Gary Shilling’s subscribers cleaned up in government bonds during the financial crisis and housing collapse. What now? Click here for Shilling’s moneymaking strategies for 2011 in his Insight newsletter.
There are two strong factions right now in terms of economics: 1) those who say we need to immediately cut deficits, impose austerity measures, endure the pain, and focus on a more disciplined future, and 2) those who say austerity, right now, would be detrimental to the recovery. We must stay the course, they to say, by continuing to prop up asset prices until the training wheels can come off. Only well down the line can we safely consider cutting deficits.
I fall more into the first group. I believe that any positive economic readings we see that are spun endlessly as signs of a “recovery” are a farce. Common sense says that you cannot perpetually spend more than you have. At some point, the music will stop. There will come a time when the dollar is not the only reserve currency, when foreign governments will not depend so heavily on the United States for their own prosperity, thus will be less forgiving in regards to our self-serving economic policies. We must start preparing for that day.
Economics has been made out to be some secret, ultracomplicated formula that the average American is too simple-minded to understand. In reality, if we followed our “simple” intuition and focused less intensely on growth at all costs, we would be in a much better spot than we are now. When economists make condescending remarks, I ask the question: where has your expertise and leadership gotten us? We need to tug on the reins before its too late.
The other ginormous elephants in the room are the state debt and budget crises. California is close to requiring a bailout or defaulting under their huge debt burden, and several other states are not far behind. This is one of the many stories I believe will take shape starting this year, and how we deal with these crises could determine the pace of the “recovery.”
Special Offer: Curtis Hesler’s readers have been in gold all the way from $300 to $1400, riding triple-digit gains in ETFs, mining stocks and physical gold. Is Hesler still bullish? Click here for his just-released 2011 outlook in Professional Timing Service.
WHAT 2011 WILL BRING FOR THE MARKETS
In my opinion, 2011 will bring a relative return to normalcy. For the markets, I believe it will be the year of the market timer. We will not see huge moves across the board and the bullish action will likely be selective. Take 2011 month by month and quarter by quarter, because the situation could certainly deteriorate or strengthen based on a number of factors. It will be a year to be nimble and flexible with your capital.
My top side target for the S&P 500 in 2011 is 1350-1375, while downside support would be 980-1040 in a reasonable worst case scenario. However, it appears that our government and Federal Reserve will continue to do everything in their power to keep the “recovery” on track, even if much of it is an illusion. At some point, we will have to put an end to the incessant money printing and tighten our belt, and it will be interesting to see how the market reacts to that.
I agree with Meredith Whitney that we will need to pay close attention in order to attempt to time this market. Uncertainty creates opportunity, so while unemployment and housing are huge drags, they are likely close to a bottom if not already there. Technology continues to accelerate while the Nasdaq trades at just more than half of what it did a decade ago.
STOCKS AND SECTORS
Cloud computing stocks have become the latest craze for investors as cloud technology looks set to become the next game changer. We listed VMWare, Inc. (NYSE:VMW) as one of our go-to stocks at the beginning of 2010 and it has more than doubled, while other cloud stocks like Riverbed Technology Inc. (Nasdaq:RVBD) and F5 Networks Inc. (Nasdaq:FFIV), only to name a couple, that we cover also performed well. Cloud stocks recovered from an October disaster and most are making new highs. EMC Corp (NYSE:EMC) is another great pure cloud play.
Rare earth became a hot commodity as China decided to cut export quotas. Many traders made their years trading these wildly volatile (and highly speculative) stocks like MCP, REE, SHZ and AVL. These stocks were a short term trader’s dream. There will be new stocks and sectors that will come into vogue, and you should be flexible and nimble enough with your capital to take advantage of emerging trends.
I also believe your money is in good hands with some tech leaders like Apple Inc. (Nasdaq:AAPL) and Google Inc. (Nasdaq:GOOG), which continue to stay ahead of the technology curve. Both could use a stock split. Facebook, when it does go public, will be another interesting stock to watch. I also believe tech dinosaurs Microsoft Inc. (Nasdaq:MSFT) and Cisco Systems Inc. (Nasdaq:CSCO) could get a boost in 2011 as they reemerge as innovators.
I also believe two of the most downtrodden bank stocks, Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) can revert somewhat to the mean and get to $7-8 and $17-18, respectively.
One story to watch closely is the agricultural group and specifically the fertilizer names. As population growth and affluence in developing countries increase, demand for food will grow considerably while amount of arable land will not. Potash fertilizer is necessary to grow crops where you otherwise could not. That is why PotashCorp of Saskatchewan (NYSE:POT), which controls 20% of the world potash supply, has been subject of various takeover rumors at a significant premium, and why it is one of our favorite plays into 2011. If you want a more diversified agricultural holding, you could consider the Market Vectors Agribusiness ETF (NYSE:MOO), which has performed will since we highlighted it here and we feel will continue to perform well.
Finally, on to Gold. I first mentioned gold on CNBC in 2008, and we hit my stated technical target of $1350 this year. The game has changed though and the gold trade has evolved. I definitely feel gold has more upside, as do other precious metals like Silver. My cautious gold target is $1600-1800/ounce, but I could easily see it moving above $2000. I also believe Japan could be a hot place to be in 2011, which you can play with the ETF EWJ.
CONCLUSION
The market was strong in 2010 after the Fed’s intentions became painfully clear, but the economy is only just showing small signs of a meaningful recovery. There are many challenges that must be met and changes that must be made to in order for us to truly get back on the right track. However, I am an eternal optimist, and despite lingering concerns I believe we are in a great position to emerge from this crisis stronger than we entered it. There will be investing opportunities in 2011 if you remain selective and patient. Evaluate your performance for 2010, redefine your strategy, and commit to being an informed market participant in 2011.
by Scott Redler
Source: http://blogs.forbes.com
Monday, January 3, 2011
China's war on inflation a threat to global recovery
China's Premier Wen Jiabao has vowed to step up the country's fight against inflation, increasing the likehood of further interest rate rises that could threaten the strength of a global economic recovery.
Mr Wen's pledge to curb inflation came as new government figures revealed that measures already taken are leading to a slowdown in manufacturing growth.
Speaking on a trip to supermarkets in Inner Mongolia over the weekend, Mr Wen said: "The central government has taken a slew of steps to stabilise prices. We will put it higher up on our agenda."
Chinese inflation is at the highest rate for more than two years – 5.1pc – sparking fears in the government of social unrest as the price of food soars. China raised interest rates for the second time in three months on Christmas Day, lifing them 0.25 to 5.81pc.
Policymakers have also raised the amount of money banks must keep in reserve in an effort to restrain bank lending that has powered the economy but also driven up prices.
However, a clampdown by China on inflation threatens to slow the growth of the domestic and global economy, which has been heavily reliant on the strength of the world's second largest economy. Stock markets around the world slid after the country raised interest rates over Christmas.
A survey by the state-affiliated China Federation of Logistics and Purchasing (CFLP) shows manufacturing expansion eased in December, with the Purchasing Managers Index falling from 55.2 to 53.9.
The decline – based on a survey of 820 companies – was the first in five months and economists have attributed the slowdown to the government's inflation policies.
Although any measurement above 50 represents growth, the PMI survey also showed slowing expansion in new orders, which fell to 55.4 from 58.3, and output, from 58.5 to 57.5.
"This suggests a very strong tightening force at work which could be the tightening in financial conditions which has been more than we previously expected," Goldman Sachs said.
On December 31, the central bank governor Zhou Xiaochuan pledged to keep prices "basically stable" this year with a shift to a "prudent" monetary policy from the "moderately loose" stance taken as the country tried to drive growth.
His tone was markedly different from 12 months ago, when he earmarked "defeating the international financial crisis" as the crucial task.
The bank chief's comments were supported by Mr Wen, who in a rare radio appearance faced callers angry about rising prices. "I can tell everybody, the government has complete confidence in tiding over this difficult stage," he said.
The price of basic foods has doubled in some parts of China and there are fears that a freezing winter could drive prices up further. High inflation has been driven by aggressive lending by banks following the financial crisis and Beijing's ¥4 trillion (£389bn) spending programme.
However, a subindex by the CFLP of input prices for raw materials, energy and supplies fell sharply to 66.7 in December from 73.5 in November, indicating that policies to stabilise prices have met with initial success. Ken Peng, an economist at Citigroup said: "I do not see much risk of a sharp economic slowdown."
Source: www.telegraph.co.uk
Mr Wen's pledge to curb inflation came as new government figures revealed that measures already taken are leading to a slowdown in manufacturing growth.
Speaking on a trip to supermarkets in Inner Mongolia over the weekend, Mr Wen said: "The central government has taken a slew of steps to stabilise prices. We will put it higher up on our agenda."
Chinese inflation is at the highest rate for more than two years – 5.1pc – sparking fears in the government of social unrest as the price of food soars. China raised interest rates for the second time in three months on Christmas Day, lifing them 0.25 to 5.81pc.
Policymakers have also raised the amount of money banks must keep in reserve in an effort to restrain bank lending that has powered the economy but also driven up prices.
However, a clampdown by China on inflation threatens to slow the growth of the domestic and global economy, which has been heavily reliant on the strength of the world's second largest economy. Stock markets around the world slid after the country raised interest rates over Christmas.
A survey by the state-affiliated China Federation of Logistics and Purchasing (CFLP) shows manufacturing expansion eased in December, with the Purchasing Managers Index falling from 55.2 to 53.9.
The decline – based on a survey of 820 companies – was the first in five months and economists have attributed the slowdown to the government's inflation policies.
Although any measurement above 50 represents growth, the PMI survey also showed slowing expansion in new orders, which fell to 55.4 from 58.3, and output, from 58.5 to 57.5.
"This suggests a very strong tightening force at work which could be the tightening in financial conditions which has been more than we previously expected," Goldman Sachs said.
On December 31, the central bank governor Zhou Xiaochuan pledged to keep prices "basically stable" this year with a shift to a "prudent" monetary policy from the "moderately loose" stance taken as the country tried to drive growth.
His tone was markedly different from 12 months ago, when he earmarked "defeating the international financial crisis" as the crucial task.
The bank chief's comments were supported by Mr Wen, who in a rare radio appearance faced callers angry about rising prices. "I can tell everybody, the government has complete confidence in tiding over this difficult stage," he said.
The price of basic foods has doubled in some parts of China and there are fears that a freezing winter could drive prices up further. High inflation has been driven by aggressive lending by banks following the financial crisis and Beijing's ¥4 trillion (£389bn) spending programme.
However, a subindex by the CFLP of input prices for raw materials, energy and supplies fell sharply to 66.7 in December from 73.5 in November, indicating that policies to stabilise prices have met with initial success. Ken Peng, an economist at Citigroup said: "I do not see much risk of a sharp economic slowdown."
Source: www.telegraph.co.uk
Saturday, January 1, 2011
Britain 'to be stuck in slow lane to recovery' as emerging nations lead the way out of recession
Britain will be the stuck in the slow lane this year in a ‘two-speed’ global economic recovery, the International Monetary Fund said last night.
In an unsettling prognosis for 2011, the watchdog predicted that developed economies such as the UK will continue to struggle as they tackle their towering debt mountains.
Growth will be so lacklustre that unemployment levels will remain at their current elevated levels across the industrialised world, according to the IMF.
The warning came a day after David Cameron declared that Britain was facing a year of ‘heavy lifting’ to repair the nation’s battered finances.
The Prime Minister said: ‘2011 is going to be a difficult year as we take hard but necessary steps to sort things out.’
According to the IMF, the new age of austerity means that emerging nations such as India and China will continue to close the gap on the developed world for the foreseeable future.
And the Washington-based group warned that countries such as Britain and America faced a ‘long and slow’ recovery from the excesses of the credit boom, which imploded with such devastating force in 2007.
IMF chief economist Olivier Blanchard said: ‘The two-speed recovery, low in advanced countries, fast in emerging market countries, is striking and its features are increasingly stark. They will probably dominate 2011 and beyond.’
It will take years before the ‘badly broken’ financial system is brought back to full health – and with it the prospect for a potent economic and jobs recovery, said Mr Blanchard.
The prospects for the embattled euro-zone are particularly grim, with Portugal and Spain widely viewed as the next in line for a bail-out following the rescues of Greece and Ireland last year, experts said.
By Daily Mail Reporter
Source: www.dailymail.co.uk
In an unsettling prognosis for 2011, the watchdog predicted that developed economies such as the UK will continue to struggle as they tackle their towering debt mountains.
Growth will be so lacklustre that unemployment levels will remain at their current elevated levels across the industrialised world, according to the IMF.
The warning came a day after David Cameron declared that Britain was facing a year of ‘heavy lifting’ to repair the nation’s battered finances.
The Prime Minister said: ‘2011 is going to be a difficult year as we take hard but necessary steps to sort things out.’
According to the IMF, the new age of austerity means that emerging nations such as India and China will continue to close the gap on the developed world for the foreseeable future.
And the Washington-based group warned that countries such as Britain and America faced a ‘long and slow’ recovery from the excesses of the credit boom, which imploded with such devastating force in 2007.
IMF chief economist Olivier Blanchard said: ‘The two-speed recovery, low in advanced countries, fast in emerging market countries, is striking and its features are increasingly stark. They will probably dominate 2011 and beyond.’
It will take years before the ‘badly broken’ financial system is brought back to full health – and with it the prospect for a potent economic and jobs recovery, said Mr Blanchard.
The prospects for the embattled euro-zone are particularly grim, with Portugal and Spain widely viewed as the next in line for a bail-out following the rescues of Greece and Ireland last year, experts said.
By Daily Mail Reporter
Source: www.dailymail.co.uk
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