The saturday economist 2nd june

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The Saturday Economist 6th June 2012. Economics news and updates on the UK Economy

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The saturday economist 2nd june

  1. 1. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | In this issue : Saturday June 2nd 2012 Page No. The week in review 2 UK Manufacturing 3 Money Supply 4 World Trade update 5 Discussion Papers - the 2012 series 6 Latest Economic Indicators 7 John Ashcroft is Chief Executive of pro.manchester, a director of Marketing Manchester, a member of the Greater Manchester Chamber of Commerce, the AGMA Business Leadership Council and a visiting professor at Don’t miss MMU Business School the weekly specialising in Macro Economics and Corporate Strategy. e-mail London School of Economics London Business School with a Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ PhD in macro economics from MMU.Saturday, 2 June 12
  2. 2. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Saturday June 2nd 2012 The Week in Review - manufacturing output slumps, money supply is flat, world trade data disappoints. Global data raise fear of downturn - the headline in the FT as US payroll data disappoints, growth is sluggish in Brazil, PMI data for China slows and Euro unemployment rises to 11%. Spain is determined to jump the bail out queue as hot money flows out of the economy, almost 100 million euros the level of Spanish bank withdrawals in the first quarter. As we report on page 5, world trade slowed to 2% in March compared to over 5% in 2011. Import growth has slowed across the world with Euro imports falling by 2.5%. The impact on world energy and commodity prices is marked. Brent Crude closing sub $100 per barrel at the end of the week. Manufacturing slumps In the UK, economics data was sparse just the money supply and lending figures from the Bank of England to enliven, as the ONS had nothing to offer. News from the latest PMI Markit manufacturing survey suggested output slumped in May. So much for those who argue the official GDP data is out of touch with survey information. This week the Chamber of Commerce argued for £6 billion of spending cuts to stimulate growth. No more QE please. The Chancellor responded to the need for stimulus by reversing planned tax increases on static pasties and hot caravans. Yes there is an alternative. JKA Our GDP growth forecast for 2012 is already down to 0.2% for the year. The situation will just get worse ....... Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 2Saturday, 2 June 12
  3. 3. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Saturday June 2nd 2012 Manufacturing Markit / CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) The UK manufacturing sector took a sudden sharp turn for the worse in May. Companies scaled back production and employment as inflows of new business declined at the steepest pace since March 2009, amid rising uncertainty among domestic and overseas business. At 45.9 in May, down from 50.2 in April, the seasonally adjusted Markit/ CIPS UK Manufacturing Purchasing Managers’ Index® (PMI®) fell to its lowest level for three years and below the neutral 50.0 mark for the first time since last November. The headline index fell by 4.3 points over the Index fell to 45.9 in May month, the second-steepest fall in its 20-year history. The data suggests the official ONS data will surely follow with negative implications for GDP output in the second quarter. I promise to let one week pass without a comment on rebalancing the economy - the March of the Makers rebuilding the workshop of the world but this is not that week. JKA Official data will follow .. Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 3Saturday, 2 June 12
  4. 4. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Saturday June 2nd 2012 Money Supply and Lending Data from the Bank of England - lending to individuals increased by just 1% in April and by 0.8% year on year in the twelve months to April. Households remain the key engine of growth in the UK economy and the housing market a measure of activity and confidence. Narrow money, notes and coins increased by 5% in April compared to 5.5% in the first quarter. Money stock at £61.8 billion represents an implied velocity of circulation of 24.3. Can’t remember why this is important any more. Broad money M4 increased by £10.6 billion in April, compared to an average monthly increase of £3.9 billion in the previous six months. The three-month annualised growth rate was 3.8%. Lending secured on dwellings up by 0.8% M4 lending increased by £2.3 billion in April, compared to an average monthly increase of £0.9 billion in the previous six months. The three-month annualised growth rate was 0.7%. For those concerned about QE and inflation, take note. As we have argued QE and the Asset Purchase Facility have had little impact on money and lending in the real economy. Broad Money M4 Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 4Saturday, 2 June 12
  5. 5. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Saturday June 2nd 2012 World Trade update In a special report this week, we look at the latest world trade data for March and the first quarter of 2012 based on the data release from the CPB Netherlands Bureau of Economic Policy Analysis. World trade growth fell to 2% in March compared to 2.7% for the first quarter and over 5% for 2011 as a whole. Import growth slowed markedly with a fall in Euro imports (-2.5%) particularly evident. The impact on manufactures prices of lower demand, energy costs and World trade growth is slowing raw materials was to reduce manufactures inflation to 2% in March compared to over 9% in 2011. Energy prices are falling with oil Brent Crude closing the week at sub $100 dollars per barrel. Good news for UK inflation but bad signals for growth and output. The double dip not just a slip. The slump is coming unless policy makers get to grip with the challenges in Euroland. Manufactures pricing slowing Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 5Saturday, 2 June 12
  6. 6. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Discussion Papers 2012 Saturday June 2nd 2012 Depreciation and the UK trade in goods 2008 - 2011 April 2012 Forty years of UK trade - 1970 - 2012 April 2012 A comparison of UK recession and recoveries 1930 - 2012 May 2012 What’s wrong with Quantitative Easing? May 2012 Don’t worry about the Euro May 2012 The IMF, QE, Credit Easing and SME bonds May 2012 Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 7Saturday, 2 June 12
  7. 7. The Saturday Economist johnashcroft.co.uk Log In | Register | My Account | iPad App | Latest Economic Indicators Saturday June 2nd 2012 Indicator Period Latest Notes, next release Source Inflation CPI April 3.0% ONS Inflation RPI April 3.5% .. ONS Inflation RPIX April 3.5% .. ONS Earnings March 1.6% ONS Retail Sales volume January 2.0% ONS Retail Sales value January 4.4% ONS Unemployment March 2.62 LFS Million trailing 3 months ONS Unemployment % March 8.2% LFS trailing 3 month ONS Claimant count April 1.59m Million ONS PPIs output April 3.3% Manufacturing prices (output) ONS PPIs input April 1.2% Manufacturing prices ( input) ONS GDP growth Q1 2012 -0.3% ONS Manufacturing March -0.9% year on year growth ONS ONS : Office for National Statistics, LFS : Labour Force Survey Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 8Saturday, 2 June 12
  8. 8. The Saturday Economist johnashcroft.co.uk The Saturday Economist The Saturday Economist is a round up of the week’s economics news for the UK published on the web site johnashcroft.co.uk. The information is also available as a PDF download. The information was originally published in short form in the Sunday Times and Croissants weekly blog post and has been expanded following requests for more information. To receive the weekly STAC e-mail join me on LinkedIn. Details of our current annual The material in the Saturday Economist is based upon information which we forecasts : The UK in Black and consider to be reliable but we do not represent that it is accurate or complete and White Forecasts for the UK it should not be relied upon as such. We accept no liability for errors, or omissions Economy 2012 - 2015 can be of opinion or fact. found on this web site and on slideshare - jkaonline In particular, no reliance should be placed on the comments or trends in financial markets. The publication of this document should not be construed as the giving All views expressed in the Saturday Economist of investment advice. are my own. Information is intended to provide a general outline of the subjects covered. It should neither be regarded as comprehensive Forecasting is fun and subject to frequent revision. nor sufficient for making decisions, nor should it be used in place of professional advice. Neither the Saturday Economist or any representative JKA accept any responsibility for any loss arising Data is adapted from the Office for National Statistics licensed under the Open Government Licence v.1.0. from any action taken or not taken by anyone using this material. Check out www.johnashcroft.co.uk, Join me on LinkedIn, Twitter or Google+ Page 12Saturday, 2 June 12

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