Jobs are not being lost everywhere in Europe.
In the midst of Europe’s debt-induced recession woes, it is interesting to note the vastly different labour market experience of individual European economies since late 2007. The two charts below illustrate this point. Continue reading
The UK’s third quarter GDP figures from the ONS were pretty much good news all round – stronger growth than expected and most sectors sharing in that rise. But leaving aside the obsession in the quarter to quarter changes, it is the trend in levels of output since the economy started to slip into recession that are interesting. Interestingly, it is financial services that is suffering most ………. Continue reading
Just how bad is the state of the UK’s economy? Another clue will come in Tuesday’s GDP figures – the first estimate of third quarter growth.
Shadow Chancellor, Ed Balls, leads the “there’s no growth” camp with his oft-quoted line: “Our economy has flat-lined now for nine months. Slower growth in Britain than any other G7 country except Japan.” It’s certainly true that the latest estimate of the UK’s output in Q2 sees it at the same level achieved in Q3 of last year – the quarter on quarter growth has been non-existent. 
It’s no wonder that British consumers are feeling pain from higher prices and that questions are being asked about the appetite of policy makers to control inflation. Just look at these charts.
In 2008, the inflation rate in the UK was in line with other major EU countries. The strength of the UK’s economy in 2007 and into 2008 is seen in the CPI edging a bit above that in other countries. Then the recession came and inflation fell everywhere – but not in the UK to such low rates. Ireland had it really hard as the chart shows. So, for nearly three years the UK has had a rate materially higher than the EU average and major European countries. Perhaps a case can be made that the urgency to get inflation down in the UK is not what it used to be?
The news that Scottish Power is to bring in a double digit increase in domestic gas and electricity prices in August has naturally concerned households whose budgets are already stretched. (See stories in the Guardian and City A.M.)
It is no wonder that consumer anger is rising as domestic fuel prices have seen some large increases in recent years – up 30% in 2006 and another 40% two years later, with subsequent price falls much more modest.
But the real impact on households is seen in the cumulative price increase. The chart below shows domestic energy prices have risen by 75% since 2005 compared to around 20% for the CPI in aggregate. Continue reading
