British Growth: The Devil Is in the Details

May 25, 2011

Real GDP in the U.K. expanded 1.9% at an annualized rate according to the second estimate by the Office for National Statistics.  That matched the first estimate and left GDP at the same level as in the third quarter of 2010.  Fourth-quarter 2010 activity had been slammed by harsh weather mostly in December, and the […] More

One-Day Dollar Correction Out of Steam

November 9, 2010

The dollar had opened firmer this week on Monday and strengthened further overnight to 1.3824 per euro, but it relapsed subsequently to 1.3951 currently, a net slide of 0.2% since yesterday’s New York closing.  The dollar also shows net overnight losses of 0.6% against the Swissy, 0.7% versus the yen, and 0.3% against sterling and […] More

Gambling on Fiscal Restraint

June 22, 2010

One of the greatest uncertainties faced by policymakers concerns whether economies that are now recovering can tolerate fiscal restraint.  Expert opinion is divided on this question, and historical precedents provide conflicting answers.  Fiscal cutbacks in 1937 and a VAT increase of two percentage points to 5% in April 1997 respectively pushed the U.S. and Japanese […] More

Euro Retaining Firmer Tone

June 18, 2010

The euro touched $1.2416, best since May 28, and on balance has given up just 0.1% from Thursday’s close.  Europe’s common currency has risen 2.3% so far this week. In a quiet end to the week, the dollar otherwise shows losses today of 0.5% against the yen and 0.2% versus the Swiss franc but is […] More

British and German Growth

May 25, 2010

Global financial markets have been unnerved by concern about the impact of the sovereign debt problems of several countries in Europe.  Governments failed to downsize their full-employment deficits when growth was expanding decently in the middle of the last decade, and fiscal deficits shot up as tax revenues plunged during the great recession.  Premiums that […] More

A Benign Market Environment for Economic Recovery

April 26, 2010

Yes, you read my headline correctly.  This certainly has not been true about Greece, and financial markets in other peripheral members of the common currency bloc are at risk.  But the statement does fit the situations pretty well for key advanced economies such as the United States, Germany, Britain, and Japan. At noontime in New […] More

Bank of England Preview

April 7, 2010

The Bank of England will not be changing policy this month.  An announcement will be made at 11:00 GMT on Thursday.  The asset purchase facility was suspended but not subsequently wound down after hitting a ceiling authorization of Gbp 200 billion at end-January.  The bank rate target of 0.5% since March 2009 represents a practical […] More

British Budget Didn’t Wow Markets

March 24, 2010

Government budgets are always pitched to two often-conflicting audiences, the public and investors.  When elections are near, pleasing both groups takes on even greater delicacy.  British elections will probably be held seven weeks from tomorrow, and U.K. public finances are in shambles in the wake of  and 8% drop in nominal GDP since 2007 and […] More

British Budget Preview

March 23, 2010

Chancellor Alistair Darling will deliver a pre-election budget on Wednesday starting at 12:30 GMT.  This will be a pre-budget budget, as parliamentary elections are seen likely on May 6 and mandatory by June.  Britain seems poised for a change of power, but the margin of victory could be too narrow to secure a majority for […] More

Commercial Trade Flows in November

January 12, 2010

Monday brought news that Chinese exports in November were 17.7% larger than in November 2008 level, including advances of 15.9% in sales to the United States and 10.2% to the EU.  There had not been an on-year increase in total exports since September 2008.  Imports shot up 55.9% in the latest statement year.  China’s economy […] More