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londonlawyer
December 7th, 2009, 11:38 AM
This is very bad news for my beloved UK.

http://www.thisislondon.co.uk/standa...nomies-2015.do

UK ‘to drop out of top 10 economies’ by 2015
Hugo Duncan
07.12.09

A leading City think tank today predicted that the UK will drop out of the world's top 10 economies by 2015.

The Centre for Economics and Business Research said Britain (CEBR), currently the seventh-largest economy in the world, will be overtaken by Brazil, Russia, India and Canada by the middle of the next decade. It said even Australia could pass Britain by 2020.

The grim warning came as Chancellor Alistair Darling put the finishing touches to the Pre-Budget Report (PBR) to be published on Wednesday.

Business leaders and economists urged the Chancellor not to raise taxes and cut spending too soon for fear of snuffing out the recovery and driving the UK back into recession.

The UK was the world's fourth-largest economy in 2005 but was overtaken by China in 2006, France in 2008 and Italy this year.

Douglas McWilliams, chief executive of the CEBR, said: “In a decade, the UK could have dropped from being number four in the world to being outside the top 10.”

The forecast will not make pleasant reading for the Chancellor ahead of the PBR. Darling will admit that borrowing this year will hit a record £180 billion, or more than 12% of gross domestic product, as tax receipts evaporate and spending soars.

He will also repeat Labour's pledge to halve the deficit between 2010-11 and 2013-14 through higher taxes and spending cuts. Among the tax increases being considered are a supertax on bankers' bonuses and a 60% to 70% rate of income tax on those earning over £500,000.

Darling will also outline some spending cuts, although he will resist publishing the full details until after the general election.

Richard Lambert, director general of the CBI, said the biggest concern of all was when the squeeze should get underway.

He said: “Start too soon and there would be a risk of snuffing out a still-fragile economic recovery. Leave it too late and the UK's borrowing costs would start to escalate, building even bigger trouble for the future.”

Writing in The Times, Lambert said tightening should start in 2011-12 and aim to get the budget back in balance by 2015-16.

“History shows that a fiscal correction geared to spending cuts rather than to tax increases is more likely to deliver debt reduction and support growth,” he said.

Professor David Blanchflower, a former member of the monetary policy committee at the Bank of England, also urged the Chancellor “to resist any temptation to start cutting public spending in 2010-11”.

In a letter to the Financial Times, Blanchflower and 11 other professors wrote: “Taking risks at this point while recovery is delicate would risk a return to recession.

“What progress has been made towards recovery in the UK and abroad has been, in some considerable part, due to decisions by governments to increase spending as a stimulus, to actively support employment and to accept higher deficits as an inevitable outcome of these measures.

“To reverse this policy just when it is having an effect would be mistaken.

“Reducing the deficit now through spending cuts would undermine the recovery and ultimately damage the public finances further.”

Codex
December 7th, 2009, 11:50 AM
Yes the BRIC Nations may well surpass the UK economy.

Brazil, Russia, India and China are massive countries with vast populations.

As for the other countries that is debatable, although both Australia and Canada have far greater room for population expansion due to their massive size and far greater natural resources. However with respect to Australia cities such as Perth may not be sustainable due to water shortages, and the same applies to other parts of Australia. Whilst large parts of Canada suffer extreme weather conditions.

The BRIC Nations may even eventually overtake the US one day and the same think tank suggests that on present trends the Chinese could overtake the US by the 2020s. Whilst in the future we could be looking at a European Economy rather than a UK one and both the French and UK Seats on the UN Security council may well be replaced by a European one. Saying that Switzerland is not a top ten economy but in terms of wealth per citizen and standards of living it preforms very well.

It may well also herald the decline of the US as BRIC member nations replace old trusted US friends such as Britain on the UN Security Council and become ever more powerful.






:)

Alonzo-ny
December 7th, 2009, 11:54 AM
What is the reasoning behind the theory? The main reason the UK has fallen recently is because of change in exchange rates. Hence its falls behind France and Italy. The only way the other countries will overtake the UK is if they have massive growth. I believe India and Brazil will overtake the UK sooner or later. Russia I am not sure about. Suggesting Canada and Australia will overtake the UK is BS. Unless there is catastrophic decline in the UK or massive growth in the other two it is not happening anytime soon. Even the current crisis isn't bad enough to do that. The is no reason to believe the UK will crumble while France and Italy don't.

Alonzo-ny
December 7th, 2009, 11:59 AM
I just realised the article is from the Evening Standard. I wouldn't put too much faith in it.

Codex
December 7th, 2009, 12:06 PM
I just realised the article is from the Evening Standard. I wouldn't put too much faith in it.

It's in a few papers, however I don't put much credence in think tanks they often get things very wrong.


As you have already mentioned Alonzo the current high strength of the Euro and exchange rates has affected Britain's position in relation to some European countries, whilst Canada and Australia are much bigger countries with far greater natural resources. However it's not that Britain is going to decline, it's a case of other countries such as the BRIC Nations are growing rapidly and some countries have vast natural resources
such as Russia, Canada and Australia.




Britain risks falling out of world's top 10 economies

Britain could lose its place as one of the world's top-ten economies in the next five years, as it's eclipsed by countries with more natural resources, a new report warns.

http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html (http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html)

By Amy Wilson
Published: 12:18PM GMT 07 Dec 2009

Britain was the world's fourth-largest economy in 2005, but was overtaken by China in 2006, France in 2008 and Italy in 2009, leaving the country in seventh position, according to a report by the Centre for Economics and Business Research.

The report said that the UK could drop to 11th place by 2015, if current economic and population growth and exchange rate trends continue.

Brazil and Russia could overtake the UK as soon as 2012, and India by 2015, the CEBR said. Canada's economy could also be bigger than Britain's that year, if demand for natural resources continues to increase, and Australia may surpass the UK by 2020.

CEBR chief executive Douglas McWilliams said dropping from the top ten won't affect economic growth or the day-to-day lives of most people, but could affect Britain's diplomatic power and mean it has to accept countries with different approaches to human rights and democracy will be in the driving seat in international relations. He questioned whether the UK will be able to keep its permanent seat on the UN Security Council if it drops out of the top ten.

"In the real world there is no league table, no relegation or promotion, no Sky TV payments to lose out on," Mr McWilliams said. "But whether we like it or not, we are going to have to be prepared to put up with economic, political and social decisions that are made internationally, not only in other countries but quite likely in countries which have very different approaches."










:)

Alonzo-ny
December 7th, 2009, 12:25 PM
Do any of the papers actually explain why they think it will drop so drastically. I just don't understand where they think the big boost in Canada and Oz will come from or where the massive drop in the UK will come from. I can understand the BRIC economies however and they will surpass not only the UK but also Italy and France and perhaps Germany and Japan at some stage in the future.

londonlawyer
December 7th, 2009, 12:27 PM
It's in a few papers, however I don't put much credence in think tanks they often get things very wrong.

http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html (http://www.telegraph.co.uk/finance/economics/6750844/Britain-risks-falling-out-of-worlds-top-10-economies.html)

As you have already mentioned Alonzo the current high strength of the Euro and exchange rates has affected Britain's position in relation to some European countries, whilst Canada and Australia are much bigger countries with far greater natural resources. However it's not that Britain is going to decline, it's a case of other countries such as the BRIC Nations are growing rapidly and some countries have vast natural resources such as Russia, Canada and Australia.


:)

As you're aware, the populations of Canada and Australia are much than the UK's. However, as you note, they have a lot of natural resources. By contrast, a main driver of Britain's economy is financial services, and its world-wide market share in that segment will shrink dramatically.

Codex
December 7th, 2009, 12:34 PM
As you're aware, the populations of Canada and Australia are much than the UK's. However, as you note, they have a lot of natural resources. By contrast, a main driver of Britain's economy is financial services, and its world-wide market share in that segment will shrink dramatically.

The financial sector in the UK accounts for less than 10% of GDP, and doesn't just include banking, it also includes areas such as insurance and commodity trading. Furthermore the vast majority of banks in the city are foreign owned. UK industries such as Pharma and biotechs, IT, Defence Manufacturing, Aviation, Construction, Electronics and the Business Service sector are all strong, whilst service industries such as tourism and entertainment, and the education and knowlege sector are also very strong UK Industries. There is also no reason to believe that the UK Financial Centre is going to shrink dramaticaly, London is a world leader in professionalism in this field and has been a respected centre for many hundreds of years.

British Companies such as Glaxo SmithKline, British Airways, BAe, HSBC, Vodafone Group, TESCO etc to name but a few are some of the most respected and dominant companies in their fields. Vodafone even own a large slice of US Telecommunications company Verizon.

londonlawyer
December 7th, 2009, 12:38 PM
10% is a lot.

Sadly, the EU (and Britain together with Greece, Spain and Italy) has a very difficult road ahead. It seems that France and Germany are the only major EU countries with a brighter future.

Codex
December 7th, 2009, 12:43 PM
10% is a lot.

Sadly, the EU (and Britain together with Greece, Spain and Italy) has a very difficult road ahead. It seems that France and Germany are the only major EU countries with a brighter future.

On what basis, do you have anything to back up this assertion, indeed Italy's economy is doing very well

90% of the economy that is not finance related, yes it is a lot however Britain has a bright outlook in terms of it's financial sector, just because a few hedge funds may leave the EU and the French President has come out with some rubbish does not autmotaically mean the end of the financial sector in the UK.

Who knows what the future holds, however what is true is that two of the greatest cities in the world, London and Pais are now within easy reach of each other, and who knows in the future these two cities may even be linked by maglev.


:)

Fabrizio
December 7th, 2009, 12:46 PM
^ Correct me if I'm wrong here, but the EU is a huge economic block with a combined GDP that is greater than any one else. It is on the same land mass that connects to the East and runs straight through to the Pacific. How all of this develops and what alliances will be made is any one's guess. But the EU is still a manufacturing and technological power house. It also now has the world strongest currency.

londonlawyer
December 7th, 2009, 12:53 PM
The EU has a very aging population and a lot of benefits that it owes them.

Every publication that I've read (including the Economist and the FT) predicts dire times ahead for the EU.

Also, the EU is not a country. It's an economic block composed of members with competing self-interests (as the latest Barnier fiasco demonstrates). Another example is that the UK and France won't give up their security council seats in favor of an EU seat.

Also, unlike the US, it does not issue EU bonds because stable countries, like Germany, don't want to underwrite risk for weaker ones, like Greece. If and when an EU country defaults on its debt, which will become a real possibility as more eastern European countries enter the EU (let alone Greece), will Germany and France bail it out? I doubt it.

Lastly, while I would not have expected China's meteoric rise to have been a zero-sum game for the rest of the world, it appears that Europe is being marginalized at China's expense.

Codex
December 7th, 2009, 12:59 PM
The EU has a very aging population and a lot of benefits that it owes them.

Every publication that I've read (including the Economist and the FT) predicts dire times ahead for the EU.

Also, the EU is not a country. It's an economic block composed of members with competing self-interests (as the latest Barnier fiasco demonstrates). Another example is that the UK and France won't give up their security council seats in favor of an EU seat.

Also, unlike the US, it does not issue EU bonds because stable countries, like Germany, don't want to underwrite risk for weaker ones, like Greece. If and when an EU country defaults on its debt, which will become a real possibility as more eastern European countries enter the EU (let alone Greece), will Germany and France bail it out? I doubt it.

Lastly, while I would not have expected China's meteoric rise to have been a zero-sum game for the rest of the world, it appears that Europe is being marginalized at China's expense.

The US may also being marginalised as the world looks Eastward rather than Westward , as for birth rates, Britain and Ireland have amongst the highest birth rates in Europe, the Germans having amongst the lowest birth rates in Europe. The UK has also seen mass immigration from Eastern Europe with millions of Polish, Romanians, Russians and others coming to the UK and particuarlty London. It is projected that the UK population will rise significantly in the future rather than fall, with cities such as London being the main beneficiaries.

http://www.guardian.co.uk/society/2009/may/21/birth-rate-increase

http://www.independent.co.uk/news/uk/this-britain/london-leads-the-way-in-uk-population-increase-419879.html

http://www.london.gov.uk/view_press_release.jsp?releaseid=973



The population of London is expected to increase by almost 20 per cent over the next two decades. The total will have grown by more than a million, to about 8.8 million, by 2029.




In terms of Bonds, they may well be part of the EU's future plans.

http://www.euractiv.com/en/financial-services/france-joins-eu-bonds-plea/article-179536



:)

Fabrizio
December 7th, 2009, 01:06 PM
LL.... good points. But you know how I see it? (this will make you laugh but here goes...) In the coming decades the EU will continue spreading Eastward uniting with Russia and then decades later with China.

londonlawyer
December 7th, 2009, 01:23 PM
I wish it were not so because I prefer Europe to the US, but I tend to agree with the international consensus of economists that Europe is in decline.

Even its stated interest for an influential voice in world affairs took a back seat to national interest when Van Rumpey was designated to be the EU president. It was reported widely that Merkel and Sarko did not want to lose their influence and therefore supported the appointmeny of a light weight.

Codex
December 7th, 2009, 01:33 PM
I wish it were not so because I prefer Europe to the US, but I tend to agree with the international consensus of economists that Europe is in decline.

Even its stated interest for an influential voice in world affairs took a back seat to national interest when Van Rumpey was designated to be the EU president. It was reported widely that Merkel and Sarko did not want to lose their influence and therefore supported the appointmeny of a light weight.

The future of the EU is far from clear at the moment, the EU has a large population of 500 million but there is still the possibility of further expansion, with the issue of whether Turkey should be allowed to join still unclear, whilst there is the possibility that Russia may also try to join eventually.

Birth rates are also prone to fluctuation, and the European birth rate may yet pick up again.



:)

Alonzo-ny
December 7th, 2009, 02:38 PM
US birth rate is 0.3% higher than the EU. Both have high immigration. Therefore the EU is no more in decline than the US is. I only see a more distributed global wealth in the future. Asia will grow but I don't believe the EU or US will see major decline. Asia still has a very long way to go before they match western living standards and stop emigration.

londonlawyer
December 7th, 2009, 02:46 PM
Every article that I have read in respected publications disputes your points. The US is expected to have considerably higher population growth than the EU. Most major EU countries expect population declines. The US, by contrast, will continue to have very strong population growth. Here's an article from an Evening Standard-caliber paper, the USA Today, which states that the US will hit 400m in roughly 30 years. (i.e., a 33% increase).

http://www.usatoday.com/news/nation/2006-07-04-us-population_x.htm

ablarc
December 7th, 2009, 02:51 PM
Eurobabble.

Alonzo-ny
December 7th, 2009, 03:07 PM
The stats I have looked at are from the CIA factbook. They have the US at around 14 births per 1000 and the EU from another source is at around 11 (same as the UK). Population is a very hard thing to estimate. Most sources seem to moronically just extrapolate the current trend. The UK is also estimated to have a population of 70m and sometimes more in the near future.

Codex
December 8th, 2009, 03:13 AM
According to the U.S. Census Bureau in the last 30 years, the number of U.S. women who reached the end of their childbearing years without bearing a child went from 10 percent to 20 percent.

The findings also highlight the shrinking of the average American family. In 1976, women on average had 3.1 children, but that figure had fallen by 2006 to 1.9 children. That is below the level of fertility needed to ensure a stable population - 2.1 children per woman is known in demographic jargon as "replacement-level fertility".

Expressed another way, 30 years ago 59% of women used to have three or more children, but that has also tailed off to just 28%.

There is also a striking variation in the frequency of childless women according to their race or origin. The proportion of white women, excluding those of Hispanic origin, who have no children is much higher than other groups at 23%.

Hispanic women are the least likely to remain childless at 14%, with black women at 16% and Asian women at 18%.

Women are waiting longer to finish their education so childbearing starts later," said Jennifer Manlove, a researcher specialising in teenage pregnancies with the organisation Child Trends.

Highly educated women are not just delaying pregnancy, they are now far more likely to remain childless full stop. The proportion of graduates or those with a professional degree without children aged 40 to 44 rises to more than one in four - 27%.

That compares with just 15% - less than one in six - for US women who did not complete their schooling.

http://www.nytimes.com/2008/08/19/us/19census.html (http://www.nytimes.com/2008/08/19/us/19census.html)

http://www.guardian.co.uk/world/2008/aug/20/usa1

http://www.findingdulcinea.com/news/Americas/August-08/U-S--Fertility-Rate-Falling--Census-Data-Shows.html





:)

Codex
December 8th, 2009, 03:26 AM
In terms of economies, future major countries may displace Britain such as the BRIC Nations and obviously the US, Japan and Germany have larger econmies than Britain, but I doubt Australia or Canada will by 2015 and within the EU the exchange rate has much to do with Britains current position.

It is unlikely that Brazil and India will overtake the UK Economy for some time, and certainly not within 5 years, Russia may overtake the UK but that is dependent on Gas prices, Russia being home to vast gas and oil fields. China will amost certainly overtake the UK Economy, with many reports suggesting it has already done so, but the sheer size of a country with a population of 1.3 Billion makes this inevitable.

It should be noted though, that in China a married couple is only allowed to have one child, and given the fact that the male child is much more important to the Chinese, they tend to abort or try to get rid of female babies, and this has led to a glut of males and far too few females, so China has severe future population sustainability problems.

Finally if Turkey and indeed Russia eventually join the EU, the joint population of the European Union will be over 700 million, and this will create a very powerful economic and political union indeed.





:)

Alonzo-ny
December 8th, 2009, 04:48 AM
Russia in the EU? I can't see that happening.

Codex
December 8th, 2009, 05:11 AM
Russia in the EU? I can't see that happening.

The Russians have more than a passing interest in the EU and although membership is unlikely in the short term, in the longer term I think they would love to be accepted by the West and to play a greater role in European Affairs. Putin and his cronies will be replaced in good time, and as Russia moves ever further towards capitalism it may find that it is better to have a say within one of it's biggest market than to stay outside in the cold. Furthermore Moscow is in Europe and so is a large slice of Russia, and the Russian rulers in Moscow have always considered themelves European.

http://ec.europa.eu/external_relations/russia/index_en.htm

http://www.eu-russiacentre.org/

http://www.rferl.org/content/Russia_And_The_EU_After_Lisbon_/1882830.html

Alonzo-ny
December 8th, 2009, 05:53 AM
Russia is a long way from democracy. I doubt they would even be considered for many decades.

Codex
December 8th, 2009, 05:54 AM
Russia is a long way from democracy. I doubt they would even be considered for many decades.

Russia has come a long way already, so in the longer term who knows.

As for birth rates, you are right the US Birth rate is nothing to shout about, whilst Chinese couples are limited to one child.

londonlawyer
December 8th, 2009, 06:17 AM
http://business.timesonline.co.uk/tol/business/economics/article6948438.ece

From Times Online December 8, 2009

UK output signals weak start to fourth quarterRobert Lindsay Recommend? British industrial output failed to grow in October, confounding expectations for a modest rise and suggesting that the economy made a weak start to the fourth quarter.

The bleak figures emerged as the Chancellor prepares to unveil the Pre-Budget Report tomorrow when he will reveal his expectations for economic growth, which is widely forecast to be revised down from the 3.5 per cent prediction he made in the Budget earlier this year.

Britain is now the only major economy still in recession, trailing the US, China, Japan, Germany and France, after gross domestic product fell by 0.3 per cent in the third quarter.
The Office for National Statistics (ONS) said today that both industrial and manufacturing output were flat on the month. Analysts had expected an increase of 0.4 per cent on both measures.

In addition, September’s figures were revised down, meaning that for the third quarter industrial output contracted by 0.9 per cent rather than the 0.8 per cent most recently estimated. The ONS said this would have a small negative effect on overall third quarter GDP.

Today's figures emerged after the British Retail Consortium revealed “disappointing” 1.8 per cent rise in high street sales in November, down from 3.8 per cent in October and 2.8 per cent in September.

Alistair Darling is tomorrow expected to press ahead with plans to return VAT to 17.5 per cent in January after reducing it to 15 per cent in December 2008 to help to stimulate spending.

The zero growth in industrial output from September to October represents a 7.8 per cent fall against a year ago while production fell 8.4 per cent against a year ago.

Within manufacturing, the biggest riser was machinery and equipment, where output increased by 5.6 per cent on the month. The biggest faller was electrical and optical equipment, which dropped by 2.7 per cent.

Industrial production has fallen for 18 consecutive months on an annual basis.

Howard Archer, the chief European and UK economist at IHS Global Insight, said: "Industrial production was disappointingly only flat month-on-month in October, thereby diluting hopes that it will make a significant positive contribution to GDP in the fourth quarter."

Mr Archer said: "This highlights the fact that the UK still faces a difficult battle to develop sustainable, significant recovery."


Here's another:

http://business.timesonline.co.uk/tol/business/economics/article6817802.ece


September 2, 2009

Britain lags behind in global race to economic recovery

Ian King, Alexandra Frean and Leo Lewis

Fears that Britain is emerging more slowly from recession than other economies were stoked yesterday with figures showing that UK factory output dropped last month.

The figures came as similar data for the United States, China and France pointed to an expansion in manufacturing activity in those countries, while Germany’s factories were also highlighted as being in recovery mode.
Figures published by the Chartered Institute of Purchasing and Supply (CIPS) revealed that UK manufacturing activity, which had been expanding during the previous five months, contracted in August.

The CIPS/Markit survey of purchasing managers in manufacturing — where a reading above 50 indicates expansion and below 50 indicates contraction — fell from 50.8 in July to 49.7 in August. The July figures were revised downwards to 50.2.

Combined with disappointing lending data from the Bank of England, the surprisingly weak figures helped to send the FTSE 100 index down 89.20 points to 4,819.70. On currency markets, sterling was down against the dollar, with the pound trading later in the session at a six-week low of $1.6137.

Economists focused on the gloomy aspects of the survey, including confirmation that manufacturers were continuing to cut jobs. Colin Ellis, at Daiwa Securities, said: “These numbers are a reminder that the economy is nowhere near out of the woods yet.”

Elsewhere, hopes that the global economy is emerging from the worst recession since the Second World War were given new impetus with strong manufacturing data from both the US and China.America’s factories have returned to growth for the first time in more than 18 months, while China’s giant manufacturing sector is growing at its fastest rate since the collapse of Lehman Brothers and the start of the global financial crisis a year ago.

French factories reported their first expansion in activity since May last year. German manufacturers also reported an improvement.

The figures from the US were seen as the most dramatic. The Institute for Supply Management (ISM) reported a reading of 52.9 for its manufacturing index in August, the first since January last year to exceed 50. The ISM said that new orders, new export orders and production had all risen.

Agreed US home sales, which have now risen for a record six consecutive months, rose in July to their highest level in two years.

But suspicions that the figures had already been priced into the market sent Wall Street sharply lower. The Dow Jones industrial average closed down 185.68 at 9,310.60 and the S&P 500 finished down 22.58 at 998.04.

In Shanghai, shares rose after Monday’s rout, as figures pointing to further expansion in Chinese manufacturing helped to calm nerves.

Alonzo-ny
December 8th, 2009, 06:21 AM
The UK is definitely the worst major economy in this recession. I would be extrememly surprised if there was no growth in the 4th quarter. Like all the other major western economies growth will be slow from there on out.

Codex
December 8th, 2009, 06:24 AM
It's not all bad news by any means -

http://www.ft.com/cms/s/0/be58ffb8-e399-11de-9f4f-00144feab49a.html

http://www.cityam.com/news-and-analysis/kezgthwgsr.html

Alonzo-ny
December 8th, 2009, 06:26 AM
I believe Scotland is expected to do slightly worse than the UK as a whole.

Codex
December 8th, 2009, 06:29 AM
I believe Scotland is expected to do slightly worse than the UK as a whole.

Edinburgh is a major financial centre, whilst Aberdeen is still bomming according to reports and tourism has actually had a good year. Furthermore the Chinese now have a taste for Scotch Whisky and luxury goods, so all in all given time I am sure the Scottish economy will weather out the storm.

londonlawyer
December 8th, 2009, 06:30 AM
http://www.thisislondon.co.uk/standard/article-23781101-darling-to-make-the-economy-less-dependent-on-city.do

londonlawyer
December 8th, 2009, 06:33 AM
This news from today reiterates what I said yesterday.


http://business.timesonline.co.uk/tol/business/economics/article6948438.ece

From Times Online December 8, 2009

UK output signals weak start to fourth quarterRobert Lindsay Recommend? British industrial output failed to grow in October, confounding expectations for a modest rise and suggesting that the economy made a weak start to the fourth quarter.

The bleak figures emerged as the Chancellor prepares to unveil the Pre-Budget Report tomorrow when he will reveal his expectations for economic growth, which is widely forecast to be revised down from the 3.5 per cent prediction he made in the Budget earlier this year.

Britain is now the only major economy still in recession, trailing the US, China, Japan, Germany and France, after gross domestic product fell by 0.3 per cent in the third quarter.
The Office for National Statistics (ONS) said today that both industrial and manufacturing output were flat on the month. Analysts had expected an increase of 0.4 per cent on both measures.

In addition, September’s figures were revised down, meaning that for the third quarter industrial output contracted by 0.9 per cent rather than the 0.8 per cent most recently estimated. The ONS said this would have a small negative effect on overall third quarter GDP.

Today's figures emerged after the British Retail Consortium revealed “disappointing” 1.8 per cent rise in high street sales in November, down from 3.8 per cent in October and 2.8 per cent in September.

Alistair Darling is tomorrow expected to press ahead with plans to return VAT to 17.5 per cent in January after reducing it to 15 per cent in December 2008 to help to stimulate spending.

The zero growth in industrial output from September to October represents a 7.8 per cent fall against a year ago while production fell 8.4 per cent against a year ago.

Within manufacturing, the biggest riser was machinery and equipment, where output increased by 5.6 per cent on the month. The biggest faller was electrical and optical equipment, which dropped by 2.7 per cent.

Industrial production has fallen for 18 consecutive months on an annual basis.

Howard Archer, the chief European and UK economist at IHS Global Insight, said: "Industrial production was disappointingly only flat month-on-month in October, thereby diluting hopes that it will make a significant positive contribution to GDP in the fourth quarter."

Mr Archer said: "This highlights the fact that the UK still faces a difficult battle to develop sustainable, significant recovery."


Here's another:

http://business.timesonline.co.uk/tol/business/economics/article6817802.ece


September 2, 2009

Britain lags behind in global race to economic recovery

Ian King, Alexandra Frean and Leo Lewis

Fears that Britain is emerging more slowly from recession than other economies were stoked yesterday with figures showing that UK factory output dropped last month.

The figures came as similar data for the United States, China and France pointed to an expansion in manufacturing activity in those countries, while Germany’s factories were also highlighted as being in recovery mode.
Figures published by the Chartered Institute of Purchasing and Supply (CIPS) revealed that UK manufacturing activity, which had been expanding during the previous five months, contracted in August.

The CIPS/Markit survey of purchasing managers in manufacturing — where a reading above 50 indicates expansion and below 50 indicates contraction — fell from 50.8 in July to 49.7 in August. The July figures were revised downwards to 50.2.

Combined with disappointing lending data from the Bank of England, the surprisingly weak figures helped to send the FTSE 100 index down 89.20 points to 4,819.70. On currency markets, sterling was down against the dollar, with the pound trading later in the session at a six-week low of $1.6137.

Economists focused on the gloomy aspects of the survey, including confirmation that manufacturers were continuing to cut jobs. Colin Ellis, at Daiwa Securities, said: “These numbers are a reminder that the economy is nowhere near out of the woods yet.”

Elsewhere, hopes that the global economy is emerging from the worst recession since the Second World War were given new impetus with strong manufacturing data from both the US and China.America’s factories have returned to growth for the first time in more than 18 months, while China’s giant manufacturing sector is growing at its fastest rate since the collapse of Lehman Brothers and the start of the global financial crisis a year ago.

French factories reported their first expansion in activity since May last year. German manufacturers also reported an improvement.

The figures from the US were seen as the most dramatic. The Institute for Supply Management (ISM) reported a reading of 52.9 for its manufacturing index in August, the first since January last year to exceed 50. The ISM said that new orders, new export orders and production had all risen.

Agreed US home sales, which have now risen for a record six consecutive months, rose in July to their highest level in two years.

But suspicions that the figures had already been priced into the market sent Wall Street sharply lower. The Dow Jones industrial average closed down 185.68 at 9,310.60 and the S&P 500 finished down 22.58 at 998.04.

In Shanghai, shares rose after Monday’s rout, as figures pointing to further expansion in Chinese manufacturing helped to calm nerves.

Codex
December 8th, 2009, 06:49 AM
The latest Lloyds Survey has found that an increasing number of UK Businesses are up beat and that an increasing number are starting to hire again.

http://online.wsj.com/article/SB126022595936080863.html

http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=d4d3a1ba-cfe9-42bc-8c67-03ad2770a5f2

As for the UK Banking Sector, it is mainly made up of Foreign Banks who are based in the City of London.

Britain has a history of specialist expertise in areas such as Finance, Business Services, Bio-Techs, Entertainment, Education, Construction, Electronics, Communications, Aviation and Hi-Tech Sectors, which is something we can draw upon in order to build a more specialised knowledge based economy.

http://www.egovmonitor.com/node/27160/print

http://www.timesonline.co.uk/tol/news/science/article6948145.ece

The UK was hit hard by the financiall crash, however it should be noted that Honda has just overtaken Chrysler to nudge it's way in to the top four in the US Car Market joining Toyota, and that US Industry is being increasingly displaced by Far Eatern and Chinese industry. So there is little room for any complacency or smugness on the other side of the Atlantic.

http://rumors.automobilemag.com/6583081/news/honda-will-overtake-chrysler-as-number-four-in-us-sales/index.html




:)

Alonzo-ny
December 8th, 2009, 06:50 AM
I still fail to see anything that suggests the UK faces any kind of severe decline. It has been hit harder but it will get back to growth soon enough.

londonlawyer
December 8th, 2009, 06:59 AM
thestandard.co.uk

100,000 firms in danger of going bankrupt, expert says
Hugo Duncan
08.12.09

A top London insolvency expert today warned that 100,000 businesses face collapse in the next two years, putting up to one million jobs at risk.Nick Hood, executive chairman of Begbies Traynor, told the Evening Standard that as many as 50,000 firms in the UK could become insolvent in 2010 and then again in 2011, steeply increased from this year's approximately 32,000.

The sharp rise would add between 500,000 and one million people to the unemployment total as the economy suffers a dreaded "W-shaped" rather than "V-shaped" recession.

Hood said: "We could be half way up the 'V' or getting close to the second fall of the 'W'. My guess is the latter. A second correction is coming.

"I have an awful feeling that people do not understand how bad this really is. The pain is being delayed."He said "now is the most dangerous time for businesses" because as the economy improves firms cannot get hold of the working capital they need to meet the increased workload.

"These businesses will not find the money to support the growth," said Hood. "Banks don't have the money to lend. The big story of 2010 will be businesses failing not because of the recession but because of the recovery."

The sectors most at risk, he argued, included retail, construction, printing and professional services such as lawyers and accountants. "The carnage will be among small and medium-sized businesses - good, old owner-managed, salt-of-the-earth, engine-room-of-the-economy companies," he said.

"History says it takes between one and two years for insolvencies to peak. There is a possibility that 2011 will be every bit as bad as 2010."

Hood said much of the pain has been delayed because government schemes - such tax breaks and the cut in VAT from 17.5% to 15% - have helped to keep more firms in business and more people in work than would normally be the case in a recession.

However, he warned that when the stimulus is withdrawn, firms will be hit by the full extent of the downturn.

Codex
December 8th, 2009, 07:07 AM
thestandard.co.uk

100,000 firms in danger of going bankrupt, expert says
Hugo Duncan
08.12.09

A top London insolvency expert today warned that 100,000 businesses face collapse in the next two years, putting up to one million jobs at risk.Nick Hood, executive chairman of Begbies Traynor, told the Evening Standard that as many as 50,000 firms in the UK could become insolvent in 2010 and then again in 2011, steeply increased from this year's approximately 32,000.

The sharp rise would add between 500,000 and one million people to the unemployment total as the economy suffers a dreaded "W-shaped" rather than "V-shaped" recession.

Hood said: "We could be half way up the 'V' or getting close to the second fall of the 'W'. My guess is the latter. A second correction is coming.

"I have an awful feeling that people do not understand how bad this really is. The pain is being delayed."He said "now is the most dangerous time for businesses" because as the economy improves firms cannot get hold of the working capital they need to meet the increased workload.

"These businesses will not find the money to support the growth," said Hood. "Banks don't have the money to lend. The big story of 2010 will be businesses failing not because of the recession but because of the recovery."

The sectors most at risk, he argued, included retail, construction, printing and professional services such as lawyers and accountants. "The carnage will be among small and medium-sized businesses - good, old owner-managed, salt-of-the-earth, engine-room-of-the-economy companies," he said.

"History says it takes between one and two years for insolvencies to peak. There is a possibility that 2011 will be every bit as bad as 2010."

Hood said much of the pain has been delayed because government schemes - such tax breaks and the cut in VAT from 17.5% to 15% - have helped to keep more firms in business and more people in work than would normally be the case in a recession.

However, he warned that when the stimulus is withdrawn, firms will be hit by the full extent of the downturn.

There are lots of pundits and journalists trying to sell a story, and to be honest the UK Economy will recover just like it did after WW2 when London had 3.5 million homes destroyed or badly damaged, and the country was left bankrupt after the war effort.

The UK Economy may well become more hi-tech and knowledge based in the future, but the financial sector is having to readjust the world over, and London will readjust just like it always has done over the last thousand years. At the moment Britain is going through a phase of readjustment, however there are a good many reasons to be optimistic.

http://www.egovmonitor.com/node/27160/print (http://www.egovmonitor.com/node/27160/print)

http://www.theworkfoundation.com/research.aspx

http://news.efinancialcareers.co.uk/newsandviews_item/newsItemId-22610

http://www.timesonline.co.uk/tol/news/science/article6948145.ece (http://www.timesonline.co.uk/tol/news/science/article6948145.ece)

As for posting numerous negative article written by dubious journalists, good luck with that although they are becoming a bit tedious and boring to say the least.





:)

nick-taylor
December 8th, 2009, 09:31 AM
I think it is probably inevitable that Britain will be overtaken by the likes of India, Brazil, etc... these are countries with populations in orders of mangitude greater than Britain could ever support, in addition they are rapidly developing with an expanding consumer class.

It also isn't just Britain that will be knocked down a peg or two, by 2020 China's economy will either be just behind or have already overtaken that of the US, and a decade or two later, India may have overtaken the US as well, relegating the stars and stripes to bronze on the podium. It could quite possibly be that while the 20th century was defined by London and New York, the 21st will be defined by Delhi and Shanghai.


There could also be the possibility of the economies of Canada and Australia overtaking the UK, but that would be reliant upon a massive combination of factors that I doubt would 'align'. For instance even if the British economy was in some sort of permanent recession and state of population loss it would require years of above-average growth in the economy and population in Canada and Australia to overtake the British economy. There was a daily chart the other day which showed that if people

The reality is that Australia, Canada and Britain grew by 2mn in the past 10 years. In addition the growth in immigration as a percentage is on the decline in both Australia and Canada (both peaking in the post-war years), but is rising in Britain.

Of course that population needs to generate for the economy, but growth in all three countries has roughly run parallel give or take one year when one has outdone the other.

While Canada and Australia are both former colonies, there are still significant ties the bind all countries together. For instance Anglo-Dutch Shell is a partner in the biggest planned project (barrels/day) in the Canadian Athabasca oil sands, while BP also has a presence. It so happens that three of the world's largest mining companies (Anglo American, Rio Tinto, BHP Biliton - the later two are Anglo-Australian) are headquartered in London ensuring that Britain cpatures some of the growth Australia gets when it harnesses its natural resources.


The only other thing I can think of is that there is some sort of crazily wild currency fluctuations, otherwise we might as well predict Canada to have a larger economy than that of the US by 2030

If a <$1trn developed (not emerging) economy can overtake a >$2.5trn economy in 10 years there is something definately amiss! At rates of growth like that Australia would have a larger economy than the US sometime in the third decade of this century!


Of course there should be no room form complacency, as there are a wide variety of improvements to be made; more renewable energy sources, less pessimism in the general population, a larger and more efficient public transport network, less red tape, more assistance for entrepreneurs, etc... Yet I laugh at most of these reports that Britain is somehow at the entrance to an abyss when it has taken far more steps over previous decades to create a reasonable balance. Admittedly Britain has taken a hit in the past year due to its financial services operations and the subsequent recession, and next year will be bumpy, but in the long-term it is better placed than most countries. For instance while France and Germany cling on to low-skilled industries, Britain developed it's knowledge economy (4 of the world's leading universities are in Britain). The only manufacturing in the developed world that makes sense in the long-term are highly specialised jobs that require a human touch, eg Bentley cars over manufacturing pre-baked Ford cars.

The unemployment rate in Britain is currently at 7.8% which compares quite favourably to the US (10.2%), the €-area (9.8%), Canada (8.6%), Germany (8.1%), and France (10.1%).

As things go though, the global financial & economic crisis is a mere blip in comparison to the climatic complications we will face over the coming decades and I see that as the biggest hurdle not just for the British economy, but all economies.

londonlawyer
December 8th, 2009, 08:13 PM
http://business.timesonline.co.uk/tol/business/economics/pbr/article6949470.ece

December 9, 2009

Markets tell Darling: it's time to end the spending
(David Bebber/The Times)

Alistair Darling today will contest growing doubts over Britain’s economic recovery as he tries to show the markets that he is serious about halving the £180 billion deficit in four years.

On the eve of his Pre-Budget Report, the Chancellor was confronted with figures that suggested that Britain would struggle to climb out of recession before the end of the year.

Industrial output failed to grow in October — considerably worse than expected — and a CBI survey suggested that gloomy manufacturers expect output to fall in the coming months.

One international ratings agency put Mr Darling on notice that he must act swiftly to pay off the record public debt or risk losing Britain’s prized “triple-A” credit rating.


The agency, Moody’s, said that plunging tax receipts for years to come would mean “an inexorable deterioration” in the Government’s ability to pay its debts. It said that Britain was in a fundamentally weaker position than Germany, France and Canada, which also have AAA ratings.

Its comments sent the pound lower on foreign exchanges against both the dollar and the euro.

The agency indicated that Britain had only retained its rating because it had convinced international investors that it would take action to reduce the budget deficit.

In a further sign of how poorly Britain’s public finances are regarded by the international markets, the cost of insuring against a possible debt default by the UK Government yesterday climbed to the same level as that to insure against a default by Portugal, whose economy is regarded as one of the weakest in Western Europe.
Insuring $10 million of UK government bonds against default rose to $74,000 a year, up from $72,500 on Monday. At the end of September the cost was $44,000.

The Chancellor will acknowledge a new era of deep spending cuts. Existing budgets will remain unchanged until 2011, but he will admit that safeguarding frontline hospital, school and police services will mean deep cuts elsewhere in the years that follow.

Alonzo-ny
December 9th, 2009, 05:31 AM
I'm closing this thread. I have renamed the hadge fund thread, as the biggest UK economy related thread, as "UK Economy". All posts and discussion related to that subject should be directed here. (http://wirednewyork.com/forum/showthread.php?t=20930&page=7) That way we can have all this discussion in one place.