Archive for the breakfast-today Category

Business investment in UK declines on lower oil prices

Friday, February 27th, 2015

The Office for National Statistics revealed business investment in the UK fell 1.4% in Q4 2014, the largest decline since Q2 2009, vis-à-vis a 1.2% drop in Q3 2014. The decrease was largely ascribed to lower profitability in oil production and uncertainty ahead of the general elections in May.

UK mortgage approvals rise in January

Thursday, February 26th, 2015

The British Bankers’ Association reported mortgage approvals for house purchase in the UK rose to 36,394 in January from 35,816 in December. The agency also revealed the personal loans and overdraft grew 3.9% y-o-y.

Carney considers low inflation in UK temporary

Wednesday, February 25th, 2015

The Bank of England (BoE)’s Governor Mark Carney stated low inflation in the UK is temporary and expects inflation to reach the 2% target in the next two years. The governor said that the decline in inflation was primarily due to lower oil and food prices. Inflation stood at 0.3% in January 2015.

Retail sales growth in UK decelerates in February

Tuesday, February 24th, 2015

According to the Confederation of British Industry, the retail sales balance in the UK fell to +1 in February, its lowest level since November 2013, from +39 in January. The decline was ascribed to lower sales in supermarkets and department stores. Moreover, sales expectations in March dropped to +27 from +42 in February.

China allows foreigners to short-sell

Monday, February 23rd, 2015

China Securities Regulatory Commission, the market regulator, has given the green signal for short selling on the Shanghai-Hong Kong stock connect. Effective 2nd March, the decision entails strict limitations on the activity, through short-selling ratio caps, to be announced at a later date.

Car production in UK marginally declines in January

Friday, February 20th, 2015

According to the Society of Motor Manufacturers and Traders, the UK’s car manufacturing output fell 1.2% y-o-y to 127,385 vehicles in January due to higher investment in technology and production of new models. UK car exports declined 6.2% y-o-y to 97,022 vehicles during the month.

Gap between earnings and inflation widens in UK

Thursday, February 19th, 2015

According to data released by the Office for National Statistics, total pay in the three months to December increased 2.1% compared with 1.8% between September and November due to higher bonus payments. Total pay rose 2.4% y-o-y in December, its largest lead over inflation since March 2010. UK annual inflation rate eased to 0.3% in January 2015 from 0.5% in December 2014.

UK inflation hits record low in January

Wednesday, February 18th, 2015

According to data released by the Office for National Statistics (ONS), the UK’s consumer price index (CPI) fell to 0.3% y-o-y in January, the lowest since 1988, compared with 0.5% y-o-y in December. Moreover, the retail price index declined to 1.1% from 1.6% in December due to falling motor fuel and food prices. However, core inflation gained 1.4% y-o-y in January after a 1.3% y-o-y increase in the previous month.

Greece debt talks collapse

Tuesday, February 17th, 2015

The meeting in Brussels over Greek debt was inconclusive as Greece refused to accept the extension to the €240bn bailout programme due to expire on 28th February. The country’s newly elected leftist government is seeking to revamp the bailout terms that involve extreme austerity measures. The proposal for the new programme includes providing a bridge loan to repay €7bn of maturing bonds and refinance the remaining through growth-linked bonds. In the absence of any deal, Greece is likely to soon run out of cash.

CBI raises UK growth forecast

Monday, February 16th, 2015

The Confederation of British Industry (CBI) revised the growth forecast for the UK to 2.7% in 2015 compared with the earlier estimate of 2.5% due to low inflation and recovery in employment numbers.

ECB extends financial support to Greek banks

Friday, February 13th, 2015

The European Central Bank (ECB) provided additional emergency funds worth €5bn to Greek banks by raising the cap of Emergency Liquidity Assistance to €65bn. Ewald Nowotny, a member of the ECB’s Governing Council, suggested that these funds may be replaced by cheaper direct ECB finance if Greece signed a reform programme.

Greece bailout talks inconclusive, to resume on Monday

Thursday, February 12th, 2015

The meeting between Greece’s Finance Minister Yanis Varoufakis and its international creditors failed to reach an agreement on the former’s bailout plan. The deadlock may result in a default by Greece and an exit from the euro currency. Greece is believed to have proposed a replacement of 30% of its bailout obligations with a 10-point plan of reforms during the meeting.

BCC endorses a referendum on EU exit

Wednesday, February 11th, 2015

John Longworth, Director General of the British Chambers of Commerce (BCC), stated that the UK should hold a referendum to decide its European Union membership status soon. The move would mitigate the damaging impact of business uncertainty, he said.

UK LFL sales growth improves in January

Tuesday, February 10th, 2015

The British Retail Consortium stated like-for-like (LFL) retail spending increased 0.2% y-o-y in January, after declining 0.4% y-o-y in December. Overall, retail sales grew 1.6% y-o-y compared with 1.0% y-o-y in the previous month.

Greece’s Prime Minister rejects bailout extension

Monday, February 9th, 2015

Greece’s Prime Minister Alexis Tsipras reiterated his plans to rollback austerity measures and refuse bailout extension. Mr. Tsipras intends to reverse measures imposed by European and the International Monetary Fund lenders, including reinstating pension bonuses, cancelling property tax, ending mass layoffs and raising the minimum wage limit.

UK house prices rise in January

Friday, February 6th, 2015

Halifax revealed that UK house prices rose 2.0% m-o-m in January compared with a 1.1% increase in December. The unexpected rise may be due to lower mortgage rates, stamp-duty reforms and a real increase in income.

UK services PMI rises in January

Thursday, February 5th, 2015

According to Markit, UK’s services Purchasing Managers’ Index (PMI) climbed to 57.2 in January compared with 55.8 in December. Moreover, the services PMI’s employment index increased over 2 points to 57.1, driven by faster hiring and rising new orders.

Fall in UK shop prices slows in January

Wednesday, February 4th, 2015

According to the British Retail Consortium (BRC), UK shop prices declined 1.3% y-o-y in January compared with a 1.7% fall in December. Food prices decreased 0.5% after a 0.1% drop in the previous month. The survey reflects price changes in over 500 products.

Osborne confirms greater powers to Bank of England

Tuesday, February 3rd, 2015

Chancellor George Osborne confirmed that the Bank of England would be given additional powers to limit mortgage lending and excess leverage to safeguard the stability of the UK’s financial system. In addition, he warned against the disagreement between Greece and the Eurozone over the former’s debt.

Greece seeks renegotiation of debt burden

Monday, February 2nd, 2015

Yanis Varoufakis, Greece’s Finance Minister, insisted on renegotiating the terms of the €315bn debt, about 175% of the country’s gross domestic product, with the troika to chalk out a plan for the progress of the European economy. He plans to introduce a debt deal in the next few months and refused additional bailout cash for Greece. Germany’s Chancellor Angela Merkel ruled out debt termination citing that creditors had already made compromises.

UK consumer confidence bounces back in January

Friday, January 30th, 2015

Gfk Survey’s headline index, indicating UK consumer morale, increased to +1 in January from a reading of -4 in December. The major purchases index also climbed to +5, suggesting that Britons were more optimistic about their personal financial outlook.

Mark Carney endorses fiscal union in Eurozone

Thursday, January 29th, 2015

The Bank of England’s Governor Mark Carney called for the formation of a fiscal union in the Eurozone to support a comprehensive, coherent plan for the region’s economic recovery. He further added that the bold monetary policy actions may not be sufficient for a revival.

UK banks sanction fewer mortgages in December

Wednesday, January 28th, 2015

The British Bankers’ Association revealed mortgages for house purchase in the UK fell to 35,667 in December compared with 36,657 in November. The December reading was the lowest since 2013.

UK interest rates may rise earlier than expected

Tuesday, January 27th, 2015

According to the Bank of England’s rate setter Kristin Forbes, there is a high probability of inflation rising ahead of expectations, leading to an earlier-than-anticipated hike in interest rates. Falling oil prices and robust growth in the US may drive consumption in the UK.

Leftist party Syriza sweeps Greece elections

Monday, January 26th, 2015

Today, the left-leaning Syriza Party won the Greek national elections through a decisive mandate. The victory could put Greece in a possible collision with the European troika (EU, ECB and IMF) over the renegotiation of repayment of the US$325bn bailout funds. The election results are likely to add uncertainty to the Eurozone.

CBI expects weaker exports in the next three months

Friday, January 23rd, 2015

The Confederation of British Industry (CBI) industrial trends survey showed a balance decline to +1 in January from +9 in the previous survey in August. The total book balance fell to +4 in January compared with +5 in December.

UK households optimistic over financial prospects

Thursday, January 22nd, 2015

The Markit household finance survey, a measure of financial well-being for the next one year, revealed the index rose to 45.6 in January from 43.2 in December, inching closer to the 50 mark that separates pessimism from optimism.

Former BOE governor doubts effectiveness of QE programme

Wednesday, January 21st, 2015

Mervyn King, former Bank of England governor, raised concerns that further monetary stimulus programmes by the ECB may not be of much help to the struggling Eurozone. He indicated the huge trade surpluses in China and Germany as well as the low saving rate in the UK may curb the effectiveness of the QE programme.

IMF downgrades global growth forecast for 2015-16

Tuesday, January 20th, 2015

Yesterday, the IMF released the World Economic Outlook (WEO) Update that projected an economic expansion of 3.5% in 2015 and 3.7% in 2016. The organisation warned that poor growth prospects in prominent economies may offset the positive impact of the lower oil prices. The October forecast for 2015 and 2016 stood at 3.8% and 4.0% respectively.

UK house prices improve in January

Monday, January 19th, 2015

Rightmove, a property tracking website, revealed the average asking price in the UK increased 1.4% m-o-m in January after an upwardly revised 2.2% contraction in December. The house prices rose 8.2% y-o-y compared with a 7.0% y-o-y gain in the previous month.