The endless quest by newspaper bosses for anything they can dress up as a green shoot continues - on the front pages at least. Having first publised some small improvement they then play it back wih banner headlines a day or two later about the ‘feel good’ factor improving, (in reality pessimism is still predominant but not so strongly).
I will not send out the whole article by the Telegraph’s resident NewLabour luvvie - Mary Riddell - but will concentrate on the actual news both from Reuters and from the reliable bit of the Telegraph - the Business news.
However , one paragrasph from Riddell is worth quoting for its sheer brazen effrontery in calling ‘black’ ‘white’. ----
“The UK is, if not yet back on its feet, at least in the recovery position. Yesterday's YouGov poll for The Daily Telegraph indicates that the "feel-good factor" is returning, with voters increasingly confident that the worst of the financial crisis is over. There could be no better climate for Labour's autumn fightback – except that a "feel-bad factor" hangs over Mr Brown. With the Tories 16 points ahead, the poll shows that 71 per cent of people are dissatisfied with him, and only 19 per cent believe that, of the three party leaders, he would make the best PM.
Mr Brown might expect to be attracting kudos, not disdain. He can fairly claim that his policies averted a bank collapse and steered the country through recession, [wasn’t he the cause of it though? -cs] while David Cameron's assertion that swingeing cuts will lead to better public services is, by contrast, a shoddy fiction”
One only has to turn from the journalistic hype to get the real news from the real world to see clearly that the way we are heading is less likely to lead to recovery than to a total collapse of Britain PLC
Christina
REUTERS
1.9.09
Manufacturing dips unexpectedly in Aug.
By Christina Fincher
LONDON (Reuters) - The manufacturing sector dipped unexpectedly in August as employers cut jobs and inventories and the pace of pick-up in new orders slowed, purchasing managers' data showed on Tuesday.
The headline manufacturing purchasing managers' index fell to 49.7 last month from a downwardly-revised 50.2 in July. That was the first fall since February and well below the consensus forecast for a rise to 51.5.
However, a breakdown of the data suggested some reasons for optimism. Output rose at its fastest pace since December 2007 and stocks of finished goods fell at their second-fastest rate on record.
"The data are a mixed bag," said Rob Dobson, senior economist at Markit, the compiler of the survey.
"The recovery in output continued to strengthen and came from a broad sector and company-size base. However, the slower growth of new orders, continued substantial job losses and the surprising weakness exhibited by the investment goods sector are all causes for concern."
The headline manufacturing index rose above the 50.0 mark that separates contraction from expansion for the first time in over a year in July, raising hopes the sector could capitalise on a more competitive currency and aid a return to growth.
Tuesday's figures may provide a set-back to such hopes but will not dent them completely.
The new orders index slipped to 52.4 in August from a downwardly revised 54.8 in July but held in expansionary territory for the second consecutive month.
The new export orders index pointed to a stabilisation in August, ending more than a year of contraction, and a sharp fall in stocks of finished goods suggested firms may be forced to ratchet up production should demand improve.
Indeed, the orders-to-inventory ratio, a forward-looking activity indicator, rose to its highest level since the start of 2004.
"Manufacturers continued to focus on trimming costs and excess capacity in August," the survey noted. "This was reflected in lower staffing levels and holdings of pre- and post-production stocks."
The way the PMI is calculated accentuates the pace of change rather than absolute levels and Markit's Dobson said it was not surprising the index should have tailed off after sharp rises earlier this year.
"The recovery is likely to continue, but may become more muted later in the year once the initial rebound and monetary and fiscal stimuli have run their course," he said.
TELEGRAPH 1.9.09
1. Tax burden may cause businesses to quit UK
More than one-in-ten British businesses are seriously considering a move abroad because of the Government's "punitive" tax regime, a damning new survey claims.
By Graham Ruddick
According to a leading accountancy firm, one-in-five entrepreneurs who have started a business in the UK would not do so again under the present system, while almost 90pc believe the country is at serious risk of a "brain drain".
"The message from business is clear," Nigel May, tax principal at MacIntyre Hudson, said. "What was once a celebrated, competitive tax and regulatory regime has become increasingly burdensome, particularly for those ambitious individuals who underpin the health of our economy."
The survey warns that because of Labour's tax policy "a nascent economic recovery could be choked off in its prime".
Mr May added: "The Government's optimistic forecasts for recovery are based on the assumption that Britain's entrepreneurs will continue to innovate, build, work and take risk as they have before.
"What the Chancellor may have overlooked is that these essential activities for future growth rely on the very people his so-called 'targeted' tax rises hit the hardest."
As the UK's net debt rises, entrepreneurs have become increasingly frustrated at changes to the taxing of businesses and high earners. These include the raising of the top level of income tax to 50p, withdrawing personal allowances for those earning over £100,000 and restricting pension relief for those earning £150,000.
Business leaders fear more tax rises as the public finances remain weak, and believe that changes to the tax system are a larger threat to the economy than cuts in public spending, according to MacIntyre Hudson's survey.
Around 72pc believe the UK tax regime has already become less competitive compared to other major economies in recent years. As a consequence, 89pc think the country will fall victim to leading business talent moving to more favourable conditions abroad, while 12pc say there is a "significant chance" their own business could move.
Further taxes also risk dampening expansion within businesses, with entrepreneurs less motivated to develop their business or forced to make cutbacks. Out of the 350 small and medium-sized businesses questioned, 69pc warned they would be forced to make substantial cost reductions in the event of future tax increases
2. Manufacturers struggling to gain credit, EEF warns
Britain's economic recovery is under threat because manufacturers are still struggling to gain access to credit, EEF has warned.
By Graham Ruddick
New research from the manufacturers' organisation shows that an increasing number of companies are seeing borrowing costs rise, despite base rates being at a historical low.
The limited access to lending facilities means businesses are likely to find it more difficult to meet growths in demand with expansion.
Manufacturing has been one of the worst affected sectors in the recession but there are signs of improvements as businesses, such as those in the automotive industry, benefit from Government support packages.
However, the findings of EEF, suggest that banks are still reluctant to increase lending to businesses, despite hopes that the economy is recovering.
Steve Radley, the EEF director of policy, said credit conditions are "very tight" for manufacturers. "Given the severe damage done to banks' balance sheets by the recession, this is likely to remain the case for some time and will dampen the recovery as meeting new orders puts increasing pressure on manufacturers' cash flow," he added.
"This suggests that the Government and the Bank of England will need to move very carefully in removing the current levels of support for the economy."
In EEF's survey, 47pc of businesses reported an increase in the cost of finance from banks and other lenders in the past two months, the highest figure in the survey since it began in 2007. This marks an increase on 37pc in the first quarter and 44pc in the second. Businesses saw their costs increase across fees, rates and new lines of borrowing. Just 7pc of the 564 companies questioned saw a fall in the cost of borrowing, down from 10pc in the second quarter. Although, the number of businesses reporting a reduction in the availability of new lines of credit fell from 42pc to a third.
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