This posting is just the hard - and very nasty - facts. The politics
of it all will follow.
Just wait for the left-wing politicians to cry out that we should
join the euro! But were we in the euro, our industrial output and
GDP would plummet and unemploymernt would soar, So in that case
holidays in Europe would be cheaper if you still had a job! At
least our exports to Europe are either more competitive to them or
more profitable for us! (or a bit of both!)
xxxxxxxxxx cs
========================
TELEGRAPH 10.12.08
1. Sterling tumbles to record low against the euro as UK economic
woes mount
The pound fell to a new record low against the euro today after a
stark warning that the pace of economic decline in Britain is
accelerating as the country moves into a deep recession.
By Angela Monaghan
Sterling was the weakest it has been since the launch of the single
currency in 1999, with one euro worth 87.79p compared with 71.91p
just 12 months ago. The currency was under some pressure against the
dollar too, hitting $1.4736 at its lowest point this morning.
For the first time in years, some currency analysts are beginning to
speculate that the pound may be headed for parity - where one pound
will buy you just one euro or one dollar. Others dismiss the view,
expecting the euro to weaken next year as the downturn in Europe's
economy worsens.
The pound is being hammered as investors quit the currency over fears
that the UK will be one of the hardest hit by the global recession
and - with Government debt mounting - is poorly equipped to cope.
That message was reinforced this morning by the well-regarded
National Institute of Economic and Social Research, which warned the
UK is toppling into a deep recession in the fourth quarter and is
likely to shrink by more than 1pc.
That is a much bigger fall than first expected, but after a raft of
gloomy surveys in the last two weeks economists are slashing
forecasts. Official figures yesterday showed that UK industrial
production tumbled 1.7pc in September as manufacturers struggle to do
business in the downturn. The figure was much worse than expected and
marked the longest run of falling output since 1980.
The weakness of the currency will hit Britons travelling abroad on
holiday, who get a lot less for their money in Europe, the US, as
well as a host of other countries than they did a year ago.
The pound is now broadly week against a basket of currencies, falling
to the lowest level on the Bank of England measure since 1990.
"If the pound falls too far, it could frustrate future interest rate
cuts because it would push up the price of imports and stop inflation
coming down," said Steve Barrow, a currency expert at Standard Bank.
=-=-=-=-=-=-=-=-
============
TELEGRAPH 10.12.08
1. Sterling tumbles to record low against the euro as UK economic
woes mount
The pound fell to a new record low against the euro today after a
stark warning that the pace of economic decline in Britain is
accelerating as the country moves into a deep recession.
By Angela Monaghan
Sterling was the weakest it has been since the launch of the single
currency in 1999, with one euro worth 87.79p compared with 71.91p
just 12 months ago. The currency was under some pressure against the
dollar too, hitting $1.4736 at its lowest point this morning.
For the first time in years, some currency analysts are beginning to
speculate that the pound may be headed for parity - where one pound
will buy you just one euro or one dollar. Others dismiss the view,
expecting the euro to weaken next year as the downturn in Europe's
economy worsens.
The pound is being hammered as investors quit the currency over fears
that the UK will be one of the hardest hit by the global recession
and - with Government debt mounting - is poorly equipped to cope.
That message was reinforced this morning by the well-regarded
National Institute of Economic and Social Research, which warned the
UK is toppling into a deep recession in the fourth quarter and is
likely to shrink by more than 1pc.
That is a much bigger fall than first expected, but after a raft of
gloomy surveys in the last two weeks economists are slashing
forecasts. Official figures yesterday showed that UK industrial
production tumbled 1.7pc in September as manufacturers struggle to do
business in the downturn. The figure was much worse than expected and
marked the longest run of falling output since 1980.
The weakness of the currency will hit Britons travelling abroad on
holiday, who get a lot less for their money in Europe, the US, as
well as a host of other countries than they did a year ago.
The pound is now broadly week against a basket of currencies, falling
to the lowest level on the Bank of England measure since 1990.
"If the pound falls too far, it could frustrate future interest rate
cuts because it would push up the price of imports and stop inflation
coming down," said Steve Barrow, a currency expert at Standard Bank.
=-=-=-=-=-=-
AND ----->
2. Economy will shrink by more than 1pc in fourth quarter, think tank
NIESR warns
The pace of economic decline in the UK is accelerating, with the
economy on course to shrink by more than 1pc in the fourth quarter,
according to a respected research institute.
By Angela Monaghan
The National Institute of Economic and Social Research is predicting
that the UK will drop into a deep, rather than a shallow recession at
the end of the fourth quarter.
It estimated that gross domestic product fell by 1pc in the three
months to November after a 0.8pc drop in the three months to October.
"There is every reason to believe that the output decline in the
fourth calendar quarter of the year will be larger than 1pc in
magnitude," it added.
NIESR said that the outlook for 2009 was also grim: "The Government
faces the real risk that, despite the measures it took in last
month's Budget, output will fall more sharply than it expected to the
end of next year. The main problem that it needs to address very
urgently is the availability of bank credit; further interest
reductions are unlikely to have much effect."
The Government is desperately hoping that the £20bn of measures
announced at the pre-Budget report will have the desired effect of
halting the pace of decline in the UK. Similarly the Bank of
England's Monetary Policy Committee has slashed interest rates by a
total of 3 percentage points in the space of two months, but the fear
now is that despite the bold measures, the UK is still in store for a
deep and prolonged recession.
The NIESR prediction follows official figures on Tuesday which showed
that Industrial production fell at the fastest pace in six years in
October - another sign that the UK slowdown is deeper and sharper
than many expected.
Industrial production tumbled 1.7pc in September, much steeper than
the 0.5pc fall predicted by economists, and significantly bigger than
the 0.9pc drop in September.
The October production figure - the eighth monthly fall in row
marking the longest run of falling output since 1980 - dragged annual
output down by 5.2pc, the sharpest year-on-year decline since 1991
when the UK was last in recession.
2. Economy will shrink by more than 1pc in fourth quarter, think tank
NIESR warns
The pace of economic decline in the UK is accelerating, with the
economy on course to shrink by more than 1pc in the fourth quarter,
according to a respected research institute.
By Angela Monaghan
The National Institute of Economic and Social Research is predicting
that the UK will drop into a deep, rather than a shallow recession at
the end of the fourth quarter.
It estimated that gross domestic product fell by 1pc in the three
months to November after a 0.8pc drop in the three months to October.
"There is every reason to believe that the output decline in the
fourth calendar quarter of the year will be larger than 1pc in
magnitude," it added.
NIESR said that the outlook for 2009 was also grim: "The Government
faces the real risk that, despite the measures it took in last
month's Budget, output will fall more sharply than it expected to the
end of next year. The main problem that it needs to address very
urgently is the availability of bank credit; further interest
reductions are unlikely to have much effect."
The Government is desperately hoping that the £20bn of measures
announced at the pre-Budget report will have the desired effect of
halting the pace of decline in the UK. Similarly the Bank of
England's Monetary Policy Committee has slashed interest rates by a
total of 3 percentage points in the space of two months, but the fear
now is that despite the bold measures, the UK is still in store for a
deep and prolonged recession.
The NIESR prediction follows official figures on Tuesday which showed
that Industrial production fell at the fastest pace in six years in
October - another sign that the UK slowdown is deeper and sharper
than many expected.
Industrial production tumbled 1.7pc in September, much steeper than
the 0.5pc fall predicted by economists, and significantly bigger than
the 0.9pc drop in September.
The October production figure - the eighth monthly fall in row
marking the longest run of falling output since 1980 - dragged annual
output down by 5.2pc, the sharpest year-on-year decline since 1991
when the UK was last in recession.
Posts
