Britannia Radio

Today's Economic headlines
First a story from the Guardian, where the headline sounds cheerful
enough until you read the story which might be headed “Borrowing out-
of-control” ! [“Borrowing” = taxes coming later ] ; and then
Today’s Headlines - plus a bit! - from the financial columns.

There’s one cheering item - see if you can spot it !!

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GUARDIAN 20.8.08
Record oil prices boost public finances
• Larry Elliott, economics editor

Record oil prices gave the government a much-needed windfall last
month when bumper revenues from Britain's North Sea fields helped
push the public finances heavily into the black, it was revealed today.

The Office for National Statistics said that 40% of the corporation
tax take in July came from North Sea companies as the cost of crude
briefly touched an all-time high of $147 a barrel.

As a result, the Treasury was left with a surplus of £4.8bn last
month - higher than the £4.3bn the City had been expecting.

Even so, the ONS data for the first four months of the year showed
that the impact from oil was outweighed by the cost to the exchequer
of a slowing economy. Borrowing between April and July was £19.1bn
compared to £8.4bn in the same period last year.

Alistair Darling forecast in the March budget that the UK would need
to borrow £43bn to balance the books this year, but with the economy
growing much less rapidly than expected analysts believe the deficit
could exceed £50bn. [elsewhere it is suggested it could reach £60bn -
cs]

July tends to be one of the better months for the public finances,
since it is one of the periods when corporation tax is paid.
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20.8.08
Times
==Manufacturers' output hopes at seven-year low
CBI reports a gloomy mood among producers after a more-than-expected
second monthly decline in order books
==Investors spooked by mounting fear of inflation and fresh financial
upheaval
Shares suffered a renewed battering on both sides of the Atlantic
yesterday as edgy investors took fright over the twin threats of
stubbornly high inflation and further fallout from the credit crisis.
Equity markets, already badly rattled by the risk of recession across
developed economies, succumbed to another severe sell-off as
investors’ fears were inflamed by bad news on price pressures from
Germany and the United States and worries over fresh financial
turmoil. (- - - - - -)
Kenneth Rogoff, the chief economist of the IMF from 2001 to 2004,
sounded a warning that the credit crisis was set to deepen and was
likely to trigger the collapse of a large, high-profile American bank
within months.
“The US is not out of the woods, I think the financial crisis is at
the halfway point, perhaps. I would even go further to say the worst
is to come (- - - -)
==US prices rise at fastest in 27 years
US producer prices rose 1.2 per cent in July compared with the month
before, forcing America to face up the prospect of 'stagflation'
==German goods in sharpest price gain since 1974
Producer inflation rises to 8.9% in the year to July after fuel price
increases the cost of goods leaving factories

Telegraph
==Mortgage warning as economic crisis worsens
Lenders predict buyers will face even tougher conditions in the
housing market over the next six months.

Financial Times
==Manufacturers see propects at 7-year-low
Only 23% see above normal orders
==
The Tory dilemma
The Tories need to offer a greater sense of strategic direction but
this will require hard choices – this is the surest route to good
government
==German investor mood brightens
Investors’ gloom over German economic prospects has lifted this
month, with recession fears receding, according to the closely-
watched ZEW survey which showed economic sentiment rising 8.4 points
in August to minus 55.5 points