The UK not out of Recession

[PhilBen]

The Pound Many news items are claiming that the UK economy has come out of recession, after figures showed it had grown by 0.1% in the last three months of 2009. The economy had previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955. Unfortunately that is not strictly true. To claim we are out of recession the GDP figures have to be positive over two consecutive quarters not one. Statements of “There has been recent recovery signs - last week, UK unemployment fell for the first time in 18 months” all seem a bit over inflated and premature. This could point to another sign of the election around the corner and attempts of the feel good factor.

The Dollar rose against the major currencies yesterday, as global economic jitters boosted demand for the safe haven of the Dollar even as U.S. stocks rebounded. Traders continued to move to the dollar for safety as a late-session financial sell off erased gains in equities. A stronger than expected consumer confidence report gave the Dollar a helping hand. The Consumer Confidence index, from the Conference Board, rose to 55.9 in January from 53.6 in the previous month; the forecast was expected at 53.5.

The Euro German business confidence rose more than economists forecast to an 18-month high in January as global economic recovery has boosted exports. The IFO institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 95.8 from 94.6 in December. That’s the highest since July 2008 and the tenth straight increase. With more German data out today we could see the euro regain some of the ground lost yesterday against the Pound and Dollar.

Data released 27th Jan
DE CPI (P)
DE HICP (P)
AU CPI
UK CBI Distributive Trades
US New Home Sales
US FOMC interest rate announcement
JP Retail sales

Live IB Rates 8.45 am
GBP-EURO 1.147
GBP-USD 1.611
GBP-AUD 1.798
EURO-USD 1.403

 

[Former Member 1]

I think it's fairly obvious and unintelligent spin from a government which holds its people in complete and utter contempt. No technical analysis is really needed. People just need to look a the price of fuel at the pumps, food in the shops, heat, light, power...

What sickens me is the way the media are so ready to tow the party line, not only on this subject but a number of others. This government in particular has fed the public lie after lie after lie....

Unfortuantely most (if not all) of the alternative parties will simply carry on piling on the agony. So as far as recession goes we're FAR from any sort of recovery or even positive news.

 

[PhilBen]

I think it's fairly obvious and unintelligent spin from a government which holds its people in complete and utter contempt. No technical analysis is really needed. People just need to look a the price of fuel at the pumps, food in the shops, heat, light, power...

What sickens me is the way the media are so ready to tow the party line, not only on this subject but a number of others. This government in particular has fed the public lie after lie after lie....

Unfortuantely most (if not all) of the alternative parties will simply carry on piling on the agony. So as far as recession goes we're FAR from any sort of recovery or even positive news.

Need we say more!

 

[Employment Law Services]

Matt I don't disagree with what you're saying, in fact I echo most of it but does it really matter whether we're 'officially' out of the recession?

Surely we should be trying to focus on positives and avoid dwelling on negatives? Perhaps a bit of ........"What the mind can conceive the body will achieve"...........might help!!

The fact that we're all posting on this forum is evidence that we're all fighting hard to survive and, more importantly, ARE still surviving......that's got to be a good news story..........hasn't it?

 

[Former Member 1]

Matt I don't disagree with what you're saying, in fact I echo most of it but does it really matter whether we're 'officially' out of the recession?

Yes it does matter a great deal... Our political overlords are once again lying to us, trying to tell us all is well when it quite obviously isn't! What's more they're doing precisely nothing about the things that are piling agonies on to ordinary folk... And they DO have direct control over many of them...

Certainly moving forward and cultivating the real positives is important. But lies damned lies and even more lies are what landed us in this mess in the first place. One of the most positive things you can do is make sure the liars get the message that we're just not buying it anymore!

When the recovery comes it won't be bourne on a fantasy.

 

[PhilBen]

Sorry to take so long to get back, but I think there is more bad stuff to come !!!!

 

[Gouldie0]

Now is it just me or should the government not have envisaged a small income through tax returns / corporation tax payments?

http://news.bbc.co.uk/1/hi/business/8521587.stm

Far to many companies have see there profits decrease over the past 18 months and seen as your tax payments are generally based on what profit you make............... you wouldn't expect to receive the same kind of income.

 

[PhilBen]

Market Update 19/02/10

The Pound took a knock yesterday against all of the majors after data released showed that the government had borrowed a further £4.3 billion pounds in January. January should have been a month where tax receipts result in a surplus. Analysts were expecting a net influx of cash into government coffers, but a 7.7% fall in tax revenues combined with a 9.7% increase in public spending meant that the January account fell into the red for the first time in 17 years. This could increase pressure for a more aggressive deficit-cutting program than planned by PM Gordon Brown’s Labour government or in-fact any new government that comes to power.

The Dollar U.S. farm exports will jump to the second-highest level on record this year as a reviving global economy boosts sales, according to the Department of Agriculture’s top trade official. “Even with the slump and the downturn we’ve experienced, we should see exports rise once more,” Jim Miller, the USDA undersecretary for farm and foreign agricultural services, said yesterday at a department conference in Arlington, Virginia. Exports will reach $100 billion for the fiscal year through September, the USDA forecast in November. Meanwhile the dollar continued its gains against the pound and the Euro.

The Euro German Chancellor Angela Merkel is outraged and calling it a “scandal” that banks are bailing out Greece. Horst Seehofer, a leader in Merkel’s coalition, said on Tuesday that “not a single Euro” should go to Greece. However poor data from the UK gave the Euro a rest bite but the Dollar still continued to make gains.

Major Data out Today
DE PPI
FR INSEE Business Confidence
EU Current account (nsa)
EU Current account (sa)
EU Flash Services PMI
UK Retail Sales
US CPI
US CPI ex food and energy
CA Leading indicator
CA Retail Sales

Live IB rates at 5.42am UK
GBP - EURO 1.1432
GBP - USD 1.540
GBP - AUD 1.730
EURO – USD 1.347

 

[PhilBen]

Currency Exchange Update 23/02/10

The Pound With a fairly quiet day yesterday, investors should consider betting that the euro will rise against the pound amid growing concern that the U.K. will struggle to contain its budget deficit, that’s according to Royal Bank of Scotland Group Plc. “We may now be at a degree of extreme bearishness that a significant bounce in euro is more likely,” Greg Gibbs, a currency strategist in Sydney, wrote in a report today. “The same cannot be said for the pound.” There are “concerns over the government’s ability to bring the fiscal deficit back onto a sustainable path,” Gibbs wrote. “A trade to consider is long euro-pound this week.”

The Dollar The second-largest U.S. home-improvement retailer, posted fourth-quarter profit that exceeded estimates after better-than-forecast sales showed a possible recovery in the housing market. This again shows that the US could be ahead of the game when it comes to a real recovery.

The Euro Greek central bank Governor George Provopoulos said he’s confident the government will meet its “very ambitious” deficit-reduction goals and ward off any further credit-rating downgrades. Rating agencies “want evidence that the plan is implemented on target” and “some time will need to elapse before they can form a better judgment,” Provopoulos, also a European Central Bank council member, said in an interview in Athens on Feb. 19. “I have full confidence” in the government meeting its goals.

Major Data out Today
FR CPI
FR HICP
DE IFO Business Climate
DE IFO Current Conditions
DE IFO Expectations
UK BBA Mortgage Approvals
UK CBI Distributive Trades
US Consumer confidence

Live IB rates at 9.22am UK
GBP - EURO 1.134
GBP - USD 1.549
GBP - AUD 1.712
EURO – USD 1.365

 

[PhilBen]

Currency Market Update 24/02/10

The Pound The U.K. economy is entering a “very grave stage” and the Bank of England should expand its 200 billion pound bond buying plan to fight the threat of a relapse, former Treasury adviser Roger Bootle said. “A second dip is a real possibility and deflation is a live risk,” Bootle, the founder of research group Capital Economics Ltd., said at an event in London yesterday. “We’re entering a very grave stage” and “moving into next year, it’s going to be a very dangerous situation.”
BOE Governor Mervyn King, who will today testify to lawmakers on the bank’s economic forecasts, said this month that it’s “far too soon” to say the bond plan won’t be expanded. Policy makers are trying to gauge the strength of the recovery.

The Dollar Confidence among U.S. consumers fell in February to the lowest level since April 2009 as the outlook for jobs has diminished significantly, this could be a sign that spending may be slowing as the economy recovers. The Conference Board’s confidence index declined to 46, quite a bit lower than anticipated, from a revised 56.5 in January, a report from the New York-based private research group showed today. Concerns about current business conditions and the job market pushed the present situation index to its lowest in 27 years. With 20,000 jobs lost last month the recovery is still looking to be shaky.

The Euro Germany’s recovery from its worst recession for years stalled in the final quarter of 2009 as domestic spending slowed. Below average temperatures and snow have brought construction sites to a halt and prompted companies to stop employing workers, hurting much needed household spending. “The harsh winter conditions is taking its toll,” said Carsten Brzeski, senior economist at ING Group in Brussels. “The bumpy ride is not over yet. However, the underlying trend of the German recovery remains healthy.”

Major Data out Today
DE GDP (wda) (F)
US New Home Sales

Live IB rates at 8.38am UK
GBP - EURO 1.14
GBP - USD 1.545
GBP - AUD 1.737
EURO – USD 1.354

 

[PhilBen]

Currency Market Update 25/02/10

The Pound Under pressure once again and according to Bloomberg UBS AG have said if the government tackles the country’s debt burden too early the pound could fall below parity with the Euro and drop to 1.05 against the US Dollar, the lowest level against the dollar since the 1980s. “If the next government was to prematurely curb the fiscal deficit after the elections, without the economy reaching a surer footing, the consequences for sterling, financial markets and public confidence would be grave,” Mansoor Mohi-Uddin, chief currency strategist at UBS in Singapore, said today in a research note. The question of when to start cutting Britain’s record deficit is at the centre of the campaign for the general election that Prime Minister Gordon Brown must call within weeks. Mohi-Uddin joins Nobel Prize-winning economists Joseph Stiglitz and Robert Solow, who are among 67 economists to support Prime Minister Gordon Brown’s argument that it’s too soon to start cutting the U.K.’s record deficit. They disagreed with 20 economists who attacked Brown’s position in a Feb. 14 letter to the Sunday Times.

The Dollar Figures from the Commerce Department showed yesterday in Washington that sales of new homes in the U.S. unexpectedly fell in January to the lowest level on record, another sign that an extension of a government tax credit may not be enough to increase demand. Purchases declined 11% to an annual pace of 309,000, from a 348,000 pace that was forecast. The median sales price dropped 2.4 % from January 2009 and the supply of unsold homes increased.

The Euro European Union’s statistics office in Luxembourg said yesterday that Industrial orders unexpectedly rose for a second month in December led by a surge in demand for capital goods such as machinery and equipment. Orders to industrial companies in the 16-nation euro area rose 0.8 % from November, when they gained 2.7 %, the. From the year-earlier month, industrial orders increased 9.5 %, the first annual gain since July 2008.

Major Data out Today
FR PPI
UK Total Business Investment (P)
UK CBI Industrial Trends
UK CBI Distributive Trades
US Durable goods orders
US Durables ex defence
US Durables ex transport
US Initial Claims
NZ Trade Balance

Live IB rates at 8.22am UK
GBP - EURO 1.136
GBP - USD 1.533
GBP - AUD 1.723
EURO – USD 1.349

 

[PhilBen]

Currency Market Update 26/02/10

The Pound An unexpectedly steep fall in UK business investment in the last three months of the year has again weakened the pound falling to a 9 month low against the Dollar and an 11 month low against the Yen. Even the Euro enjoyed a comeback. The overall status once again became a downturn for the troubled Pound against all but a few of the major currencies. The pound's broad falls pushed its trade-weighted index, which measures its value against a basket of currencies down to 78.8 =GBP, it’s weakest since mid-October. The Banks are in the frame again as RBS reports a loss of £3.6bn for 2009, but is set to pay bonuses totalling £1.3bn to its staff. Shortly Lloyds TSB will release what loss they have made and one can assume that they also will be paying bonuses to staff.

The Dollar U.S. stocks fell, and the Standard & Poor’s 500 Index erased yesterday’s rally, as Moody’s Investors Service said it may downgrade Greek debt and reports on American jobless claims and manufacturing orders trailed forecasts. Gains on the Pound however are again down to sterling weakness.

The Euro European confidence in the economic outlook unexpectedly worsened in February after the Euro region’s recovery almost stalled in the fourth quarter. An index of executive and consumer sentiment in the 16 nations using the Euro slipped to 95.9 from a revised 96 in January, the European Commission in Brussels said yesterday. The economic recovery may fail to gather strength for most of 2010, the commission said in a separate report. As with the Dollar any gains made concerning sterling are Pound Weakness.

Major Data out Today
DE CPI (P)
DE HICP (P)
EU HICP - Core (F)
EU HICP (F)
US Core PCE Price Index (P)
US GDP Annualized (P)
US Univ of Mich Sent. (F)

Live IB rates at 6.46 am UK
GBP - EURO 1.124
GBP - USD 1.527
GBP - AUD 1.715
EURO – USD 1.358

 

[PhilBen]

Market Update 03/03/10

The Pound According to the Nationwide Building Society consumer confidence jumped in February to a two-year high after the economy was claimed to have left recession. However this probably won’t impact on the decline of sterling as 1.09 on the Euro is about to rear its head. The only thing that has prevented this from happening sooner is the poor data from Greese.

The Dollar broke below 1.50 last night against sterling and seems to be the currency in favour, alongside the Aus Dollar that that seems to have taken the correct steps from the beginning and stayed out of the global crisis.

The Euro fell to a 10 month low against the Dollar, however still gaining against the Pound. Greek Prime Minister George Papandreou said his government is discovering “new holes” in the budget on a daily basis as it prepares to announce as much as 4.8 billion Euros in extra deficit cuts.

Live IB rates at 8.42 am UK
GBP - EURO 1.098
GBP - USD 1.50
GBP - AUD 1.66
EURO – USD 1.365

 

[PhilBen]

Currency Market Update 04/03/10

The Pound BOE officials could keep their bond-purchase plan on hold today as the pound’s worst performance since October 2008 puts severe pressure on the UK recovery. Sterling has dropped 4 % against the dollar in the past month. Policy makers led by Governor Mervyn King are waiting for the 200 billion- pound program to take full effect on an economy trying to shake off the deepest recession on record.

The Euro The ECB may have to decide just how much it’s prepared to allow Greece dictate monetary policy for the euro region as a whole. As Greece’s struggle to cut its budget deficit and keeps the euro close to a 10-month low, ECB officials will today debate whether to slow the withdrawal of emergency measures used to fight the global financial slump. While Trichet says Greece won’t get special treatment, he will still have to plot a course that avoids unsettling markets further.

Major Data out Today
AU Trade Balance
CA Building permits
US Initial Claims
CA Ivey PMI
US Pending home sales

Live IB rates at 8.31 am UK
GBP - EURO 1.101
GBP - USD 1.503
GBP - AUD 1.669
EURO – USD 1.365

 

[PhilBen]

Currency Market Update 05/03/10

The Pound holds for the first time in days and we could see a close this week nearing the 1.11 against the Euro. However any small gains could be lost next week when a string of important data such as Visible Trade Balance and Retail Sales will be released. All eyes still remain on the contest between Gordon Brown and the Conservatives and I think Sterling will have plenty of stormy days to come.

The Dollar Less Americans than expected signed contracts to purchase previously owned houses in January, indicating the tax credit is doing little to encourage buyers. The index of purchase agreements, or pending house sales, dropped 7.6 % after a revised 0.8 % increase in December, the National Association of Realtors announced in Washington. Other reports yesterday showed factory orders increased and first-time jobless claims declined.

The Euro ECB President Jean Claude Trichet pressed Greece to halt its flirtation with the IMF (International Monetary Fund) aid and work with European allies to tame its record budget deficit. As protesters besieged the Greek Finance Ministry to denounce 4.8 billion Euros of tax increases and spending cuts, the Athens government said the absence of European support might force it into the hands of the IMF.

Major Data out Today
UK Input Prices (unadj)
UK Output Prices (unadj)
UK Output Prices Core (unadj)
US Hourly Earnings
US Non-farm Payrolls
US Unemployment Rate

Live IB rates at 5.17 am UK
GBP - EURO 1.106
GBP - USD 1.503
GBP - AUD 1.669
EURO – USD 1.359

 

[Former Member 1]

Phil,

I don't particularly mean to appear rude or confrontational, but I fail to see how this daily cut-and-paste of information that is freely available elsewhere (i.e. Bloomberg) progresses the debate or benefits the forum...

Your original point was, in my opinion a very sound one; but I suspect most people who understand the implication of what Bloomberg et al publish are quite capable of accessing the site themselves...

If there were some additional comment or analysis by yourself I'd not be raising a figurative eyebrow... Are these posts leading up to sometihing?

 

[PhilBen]

Phil,

I don't particularly mean to appear rude or confrontational, but I fail to see how this daily cut-and-paste of information that is freely available elsewhere (i.e. Bloomberg) progresses the debate or benefits the forum...

Your original point was, in my opinion a very sound one; but I suspect most people who understand the implication of what Bloomberg et al publish are quite capable of accessing the site themselves...

If there were some additional comment or analysis by yourself I'd not be raising a figurative eyebrow... Are these posts leading up to sometihing?

like every point of data sometimes we all print some of the same data or very similar when very little has changed or new has come out. Not all is as you claim and yes people do enjoy reading these posts. Where do you think data comes from. I sure the BBC never repeats the same news item as ITV. All news is copied at some point.

If some people don't want to view it don't click and read it. If the administrators don't won't me to post I will gladly stop.

 

[Former Member 1]

That hardly answers my question...

 

[PhilBen]

I am not even going to respond to a pointless rude comment. Don't read them

 

[Former Member 1]

I am not even going to respond to a pointless rude comment. Don't read them

I don't believe I was at all rude to you nor was my comment (which in fact WAS a question) Pointless....

I basically asked you why you were posting the information you do on a daily basis. It is (as far as I can see) merely cut-and-paste from various easily accessible sources... And without further comment to it strikes me as, well adding nothing to the original point you made...

What IS the point of logging on to this board and simply re-gurgitating information without opening up a dialogue on or engaging in further comment? It IS a perfectly reasonable and relevant question? Or have I touched a raw nerve somehow?