Inteligencia y Seguridad Frente Externo En Profundidad Economia y Finanzas Transparencia
  En Parrilla Medio Ambiente Sociedad High Tech Contacto
Economia y Finanzas  
 
15/01/2010 | Preview of Key U.K. Economic Releases for the Week Commencing 18 January

Howard Archer

The week sees several major indicators released, which should overall support belief that the United Kingdom achieved clear expansion in the fourth quarter of 2009, thereby exiting recession.

 

Annual consumer price inflation data (out Tuesday) are likely to show a substantial increase to a nine-month high of 2.5% in December from 1.9% in November, and a five-year low of 1.1% in September. This expected rise is primarily the consequence of very unfavourable base effects resulting from the fact that consumer prices fell 0.4% month-on-month in December 2008 as value-added tax (VAT) was cut from 17.5% to 15.0% and oil prices fell sharply. Furthermore, there appears to have been less discounting by retailers in December 2009 compared to a year ago when they were hugely concerned about sales prospects for the critical Christmas period as economic activity nosedived.

Core consumer price inflation is seen rising to 2.3% in December from1.9% in November, largely due to the year-earlier VAT cut and less discounting. In addition, annual underlying retail price inflation is expected to have spiked to 3.5% in December from 2.7% in November and 1.9% in October. Finally, the year-on-year increase in retail prices is seen rising to 2.1% in December from 0.3% in November. Prior to this, there was eight months of deflation on this measure including a peak drop of 1.6% in June. This deflation was the consequence of mortgage interest payments being much lower year-on-year due to the Bank of England slashing interest rates by 450 basis points between October 2008 and March 2009.

Consumer price inflation is likely to spike up to 3.0% or even higher in the early months of 2010, as it is pushed up by VAT rising back up from 15.0% to 17.5% in January, as well as ongoing unfavourable base effects in the near term resulting from sharply falling oil prices in late-2008/early-2009. We expect consumer price inflation to ease back thereafter as base effects become less unfavourable and underlying pressures are contained by substantial excess capacity, muted recovery, wage moderation, and the need for retailers to price competitively in the face of still-limited consumer spending.

Despite a surprise drop in the number of claimant count jobless in November, data on Wednesday are expected to reveal that unemployment is still rising modestly. We expect claimant count unemployment to have risen by 8,000 in December after falling 6,300 in November to stand at 1.6342 million. The claimant count unemployment rate is seen stable at 5.0%. The number of jobless on the International Labour Organization (ILO) measure is seen rising by around 38,000 in the three months to November, which would be up from an increase 21,000 in the three months to October, but massively down from a peak rise of 281,000 in the three months to May. This would take the number of unemployed on the ILO measure up to 2.503 million and cause the ILO unemployment rate to rise to 8.0%.

While the economy seemingly returned to growth in the fourth quarter of 2009, activity is still unlikely to be strong enough in 2010 to prevent further net job losses. Doubts and concerns over the strength and sustainability of any recovery are likely to encourage businesses to keep their labour forces as tight as possible. In addition, significant job cuts in the public sector could well be this year as part of the efforts to rein in government expenditure. We suspect that unemployment could yet rise to a peak of 2.75 million on the ILO measure in late 2010 or early 2011. At least though, this is markedly below the 3.0 million level that had long been feared.

Average earnings are expected to have risen just 1.6% year-on-year in the three months to November as they were limited by low bonus payments. Furthermore, underlying average earnings have been under serious downward pressure from high and rising unemployment, still significant job insecurity, recent low inflation, and the need for companies to contain their costs in the face of still-muted demand and reduced profitability. As a result, annual underlying average earnings growth (excluding bonus payments) is seen remaining down at 1.7% in the three months to November, which is the lowest level since the series began in 2001. These earnings growth rates are substantially below the 4.5% level that the Bank of England considers broadly consistent with its 2.0% consumer price inflation target.

Wednesday also sees the release of the minutes of the January meeting of the Bank of England's Monetary Policy Committee (MPC). At the meeting, the MPC kept interest rates down at a record low of 0.50% and left the amount being spent on Quantitative Easing program unchanged at £200 billion. We expect the MPC to have voted 9-0 in favour of both decisions. The MPC was always likely to remain in "wait and see" mode at their January meeting given that November's £25 billion extension to £200 billion in Quantitative Easing will last through to early February, the economy seemingly returned to growth in the fourth quarter of 2009, latest economic data and surveys have been more upbeat overall, and tentative signs are emerging that money supply growth and bank lending could be picking up. Furthermore, the MPC will have the Bank of England's new quarterly GDP and consumer price inflation forecasts available at their February meeting, and it is significant that their last three extensions to Quantitative Easing (in November, August, and May) all coincided when they had new projections to consider.

February will, therefore, be a key month for the MPC, but we believe that the odds currently favour them announcing at least a temporary pause in the Quantitative Easing program, as well as continuing to keep interest rates down at the current record level of 0.50%.

The public finances for December (out on Thursday) will undoubtedly once again make very unpleasant reading. There were at least hints in the November data that the deterioration in the public finances could at least be moderating in reaction to reduced contraction in economic activity in the third quarter of 2009 and hopefully a return to growth in the fourth quarter, as well as much smaller rises in unemployment. December will hopefully see further evidence of this, although the Public Sector Net Borrowing Requirement (PSNBR) is, nevertheless, expected to have jumped to £18.2 billion from £13.6 billion in December 2008. Even if the rate of deterioration is starting to moderate, it does not mask the need for whichever political party is in power after the general election that is due by June to come up with specific and credible measures to return the public finances to a sustainable state

The Confederation of British Industry (CBI) industrial trends survey for January is also out on Thursday, and it is expected to show that the balance of manufacturers reporting that their orders are at normal levels improved to -37% from -42% in December and a 17-year low of -58% in March 2009. While manufacturing output was disappointingly only flat month-on-month in both November and October, recent survey evidence has shown improvement. The overall impression is that the manufacturing sector is currently seeing limited recovery, but is far from racing ahead. In the near term at least, manufacturers should benefit from markedly reduced stock levels, while the weak pound is helping exporters in addition to making U.K. manufacturers more competitive in their domestic markets. On top of this, domestic demand has firmed in important overseas markets including the Eurozone and the United States. Nevertheless, serious doubts remain about the strength of demand for manufactured goods over the medium term, particularly once stimulative measures start being withdrawn.

Retail sales volumes (out on Friday) are forecast to have jumped 1.1% month-on-month in December, after disappointingly falling 0.3% month-on-month in November. Year-on-year growth is seen at 3.0%. Survey evidence released by the British Retail Consortium for December indicates that there was a marked pick up in sales. It is likely that retail sales were lifted in December by many consumers looking to have a decent Christmas after suffering a very difficult year. In addition, the reported early strong interest in the post-Christmas clearance sales was highly likely the consequence of pressurized consumers being particularly keen to take advantage of the best of the bargains. Sales were also likely to have been lifted to a limited extent by some consumers making purchases ahead of value-added tax rising back up from 15.0% to 17.5% in January. Even so, the suspicion remains that the upside for consumer spending will be limited in 2010 by a number of factors, most notably high and still-rising unemployment, low earnings growth, the VAT hike, and a general desire/need for consumers to improve their personal finances.

 

19 Jan - Consumer Price Inflation, December (Month-on-Month): +0.2%
19 Jan - Consumer Price Inflation, December (Year-on-Year): +2.5%
19 Jan - Core Consumer Price Inflation (ex Food, Drink, Tobacco), December (Year-on-Year): +2.3%
19 Jan - Retail Price Inflation, December (Month-on-Month): +0.3%
19 Jan - Retail Price Inflation, December (Year-on-Year): +2.1%
19 Jan - Underlying Retail Price Inflation, December (Month-on-Month): +0.3%
19 Jan - Underlying Retail Price Inflation, December (Year-on-Year): +3.5%
20 Jan - Bank of England Monetary Policy Committee interest rate vote split, January (Hike-Unchanged-Cut): 0-9-0
20 Jan - Bank of England Monetary Policy Committee Quantitative Easing vote split, January (More-Unchanged-Reduced): 0-9-0
20 Jan - Claimant Count Unemployment Rate, December (%): 5.0%
20 Jan - Claimant Count Unemployment Change, December (000s): +8
20 Jan - International Labour Organization Unemployment Rate, November (%): 8.0%
20 Jan - Average Earnings including bonus, December (3-Month/Year): +1.6%
20 Jan - Average Earnings excluding bonus, December (3-Month/Year): +1.7%
21 Jan - CBI Industrial Trends, Total Orders, January: -37%
21 Jan - Public Sector Net Borrowing Requirement, December (GBP/Bln): 18.2
22 Jan - Retail Sales, December (month-on-month): +1.1%
22 Jan - Retail Sales, December (year-on-year): +3.0%

Global Insight (Reino Unido)

 


Otras Notas Relacionadas... ( Records 1 to 10 of 824 )
fecha titulo
30/08/2013 Un golpe a Cameron
01/07/2013 El socio 28
25/06/2013 Los escándalos de espionaje ilegal salpican también a Scotland Yard
23/06/2013 Así funcionan los mecanismos del espionaje británico
22/06/2013 La inteligencia británica tiene «pinchados» los cables de fibra óptica
16/05/2013 La crisis europea
16/03/2013 Europa, el paquidermo
13/03/2013 Europe, Unemployment and Instability
10/03/2013 Mejor con Europa
30/01/2013 UE - Mucho más que un mercado interior


Otras Notas del Autor
fecha
Título
24/11/2012|
09/09/2012|
29/07/2012|
29/07/2012|
29/07/2012|
29/07/2012|
22/07/2012|
14/07/2012|
08/07/2012|
01/07/2012|
24/06/2012|
10/06/2012|
27/05/2012|
20/05/2012|
13/05/2012|
06/05/2012|
29/04/2012|
21/04/2012|
24/03/2012|
18/03/2012|
18/03/2012|
11/03/2012|
11/03/2012|
04/03/2012|
04/03/2012|
26/02/2012|
26/02/2012|
26/02/2012|
23/10/2011|
15/10/2011|
02/10/2011|
25/09/2011|
31/07/2011|
17/07/2011|
17/07/2011|
10/07/2011|
10/07/2011|
03/07/2011|
03/07/2011|
19/06/2011|
19/06/2011|
05/06/2011|
05/06/2011|
29/05/2011|
29/05/2011|
22/05/2011|
22/05/2011|
15/05/2011|
15/05/2011|
08/05/2011|
08/05/2011|
11/04/2011|
26/03/2011|
20/03/2011|
26/02/2011|
19/02/2011|
12/02/2011|
29/01/2011|
22/01/2011|
15/01/2011|
01/01/2011|
25/12/2010|
18/12/2010|
11/12/2010|
20/11/2010|
14/11/2010|
05/11/2010|
31/10/2010|
23/10/2010|
09/10/2010|
03/10/2010|
18/09/2010|
11/09/2010|
11/09/2010|
11/09/2010|
04/09/2010|
04/09/2010|
06/08/2010|
30/07/2010|
24/07/2010|
17/07/2010|
10/07/2010|
03/07/2010|
20/06/2010|
19/06/2010|
13/06/2010|
05/06/2010|
29/05/2010|
22/05/2010|
16/05/2010|
01/05/2010|
25/04/2010|
10/04/2010|
03/04/2010|
28/03/2010|
12/02/2010|
05/02/2010|
23/01/2010|
08/01/2010|
19/12/2009|
11/12/2009|
11/12/2009|
05/12/2009|
05/12/2009|
28/11/2009|
28/11/2009|
21/11/2009|
21/11/2009|
13/11/2009|
13/11/2009|
07/11/2009|
31/10/2009|
17/10/2009|
09/10/2009|
03/10/2009|
19/09/2009|
12/09/2009|
05/09/2009|
07/08/2009|
07/08/2009|
01/08/2009|
01/08/2009|
19/07/2009|
19/07/2009|
28/03/2009|
15/03/2009|
15/03/2009|
28/02/2009|
28/02/2009|
18/01/2009|
02/01/2009|
24/09/2008|
24/09/2008|
06/04/2008|
06/04/2006|

ver + notas
 
Center for the Study of the Presidency
Freedom House