Richard Exell

The evidence mounts by the day that the UK’s decline into stagnation pre-dates the problems in the Euro Area. Today’s item is the Eurostat data for industrial production in October. The figures for changes from October 2010 show clearly that, while industrial production in the Euro Area was 1.3 per cent higher in October 2011, in the UK it was 2 per cent lower:

If we look at the industrial production indices for the Euro Area and the UK (2005 = 100) we can see that the index has been falling in this country since the start of the year. In the Euro Area the downward trend begins in the summer:

Continue Reading →

Philip Pearson

The wind industry is enjoying a period of employment growth and public support. Siemens will create 700 jobs at a new wind turbine plant planned for Hull docks, with many more jobs likely in supply chains. It’s part of a plan to develop a renewable energy hub at Green Port Hull  in the Alexandra Dock area of the city, with Siemens investing £80m and ABP £130m. Meanwhile, Mabey Bridge the UK’s only indigenous manufacturer of wind turbine towers, is expanding to a 24-hour operation to meet growing demand, creating 45 new jobs. It’s also transferring 50 workers from its bridge-building operation, to join the 102 staff already on site, almost doubling the workforce.   

Continue Reading →

Nicola Smith

Today at PMQs the Prime Minister said that the private sector had created 581,000 jobs since the coalition came to power, with 336,000 being lost in the public sector over the same period.

It is true that between Jan-March 2010 and July-September 2011 (the figures released today) private sector employment levels role by 581,000. But 54% of the rise (314,000 jobs) took place between Jan-March 2010 and April – June 2010, and the election was in May. It is fair to assume that at least a third of the change in private sector job levels took place in April 2010, and given the Government wasn’t formed until the 12th of May, it’s hard to see how the Prime Minister can take responsibility for jobs change over that month, before any of his policies had been agreed.

Continue Reading →

Anjum Klair

The unemployment data released today shows that Clackmannanshire is the hardest place in Britain to find a job, in Clackmannanshire there are over thirty dole claimants chasing every vacancy. Since we have been reporting on employment blackspots (March 2011) Clackmannanshire has been in the top 10 frequently. We also see in this month’s data that 5 areas in the top 10 are in Scotland, up from 4 last month and has overtaken London this month.

Continue Reading →

Nicola Smith

As the economy continues to slow, the labour market’s performence worsens and the risks of a further recession increase, the Chancellor’s key argument against further stimulus is that a departure from his auserity plan would lead the costs of Government borrowing to rise. His assessment is that more spending now would mean that the interest rates we have to pay on our increasing debt burden would rocket, costing us more to borrow, making it harder to refinance the national debt, forcing interest rates to rise for ordinary businesses and households and concequently exacerbating the living standards squeeze.

This assessment has always been questionable. The costs of Government borrowing could be affected as much by the Eurozone crisis and the poor availability of investment opportunities elsewhere in the UK’s private sector (as a result of poor growth expecatations in the future) as by a bond market endorsement of the Chancellor’s austerity plan. And at any rate poor UK growth is looking increasingly likely, as Duncan has set out, to unsettle the ratings agencies. But presume for a second that a significant government stimulus did lead to a small increase in the rates we pay for our debt, what do the OBR say would happen?

Continue Reading →

• Standard Chartered says UK is in recession now
  Standard Chartered’s “Global Focus” is pretty gloomy about the advanced economies. Its page on the UK (p. 37) says: “The UK economy is likely to be in recession going into 2012 as the negative impact of fiscal tightening and falling real incomes is compounded by a downturn in demand from the UK‟s largest trading partner, the euro area. We expect GDP to contract in H1-2012, before bottoming out and eventually recovering in H2-2012.”

Continue Reading →

Thierry Dedieu

Millions of workers in France and across Europe are facing massive job losses and threats to their social protection. But austerity is not the appropriate response to the crisis. On the contrary, it’s a threat for the economy that could drive us into recession. The burden will fall on the workers, and therefore increase social injustice, driving thousands of households into great difficulties.

Continue Reading →

Philip Pearson

Early on Sunday morning the UN finalised an agreement on climate change that, as it stands, cannot hold global temperature rises to 2 degrees.

The three part Durban pact extends the Kyoto Protocol beyond 2012; mobilises a $100bn Green Climate Fund by 2020; and sets nations to work on a comprehensive global agreement which is due to be completed by 2015, but will not take effect until 2020. Four more years of talks lie ahead.

Sure, unions would, at the very least, want governments to continue negotiations. And the UK’s Environment Secretary Chris Huhne diligently supported the EU’s climate change Commissioner, Connie Hedegaard, in striking a deal that meets the EU’s aims. But his climate diplomacy somewhat had the rug pulled when his Chancellor discredited the UK’s domestic green economy programme in the Autumn Statement.

Continue Reading →

Duncan Weldon

Are UK companies facing another credit crunch?

There are worrying signs that they might be. The OECD is now worried that banks, companies and sovereigns face problems refinancing debt that has to be rolled over in 2012.

Last week Citi noted that UK companies are beginning to feel the pinch as credit tightens.

UK companies are also sensitive to the stresses in the banking system stemming from the Euro Zone. Thomas Cook has been a recent example. The company struggled to get funding for its working capital needs. A new bank facility has been recently agreed, but at a higher cost to the company. Our strategists note that a lack of bank financing will probably be an important theme for companies over the next year or so. Companies in the UK may have to increasingly turn to vendor and supplier financing for working capital requirements.

Continue Reading →

John Wood

Another month and another gloomy set of employment results. We’ve been tracking economic indicators since the start of the recession in our Economic Reports series, but sometimes you need to take a step back from the snapshots to see the longer term trends as well, if you’re going to appreciate the depth of the hole we find ourselves in.

So we’re using Touchstone blog to launch a new Economic Dashboard, giving a quick way to see trends on many of the main economic indicators since 2008. Every month, we’ll update the charts, so we can plot any progress the country is making towards recovery, or help make the case for policies that will make a difference.

Continue Reading →