Reuters blog archive
This time last year, an imminent sovereign credit rating downgrade and a 1-in-3 chance of a new recession dominated talk on Britain's economy.
To say 2013 turned out better than expected - at least by the simple yardsticks of economic growth and unemployment - would be an understatement, then, even if tepid wage growth, weak productivity and a rising cost of living still dog the economy.
None of the 63 forecasters polled by Reuters in Jan last year predicted that growth for the 2013 as a whole would hit 1.9 percent, as official data showed on Tuesday.
Back then, the consensus showed the economy would only grow around 1.0 percent, and many flagged some big downside risks even to that outlook.
British inflation dipped to 2 percent in December – its lowest since November 2009 and within the Bank of England’s target. Part of the move was driven by a fall in prices in Britain’s services sector – which constitutes more than three quarters of the country’s output.
Services inflation, which makes up around 47 percent of the consumer price index, eased to 2.4 percent in December – also its lowest since November 2009. Goods inflation – which is more sensitive to global markets than domestically generated services inflation – edged up to 1.7 percent last month. But it has also come down in recent months as a strengthening sterling pushed down import prices.
Spain appears to be on the road to recovery, if you can call it that with around a quarter of the workforce without a job.
The government says growth hit 0.3 percent in the final quarter of the year, the second quarterly expansion in a row, and may upgrade its forecast for 0.7 percent growth in 2014.
By Andy Mukherjee
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Investors have another reason to wrinkle their noses at emerging economies: fading labour productivity.
Ask investors about their minimum criteria when putting money into a country and rule of law comes pretty high. That’s one of the reasons why Turkey’s corruption scandal, and the reaction of the government in ousting hundreds of police officers, is so serious. The lira touched a record low on Thursday.
Today, parliament's justice commission will debate a draft law reforming the High Council of Judges and Prosecutors, which makes judicial appointments. Critics of the bill say it will give the justice minister significant influence over appointments, describing it as anti-constitutional and undermining the separation of powers.
By Peter Thal Larsen and Robyn Mak
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The United States and China will determine the pace of global growth in 2014. Though America accounts for a quarter of the world economy and China less than a tenth, the two countries will generate roughly half the expansion in overall GDP next year. With Europe in the doldrums, Japan still recovering and emerging markets subdued, the planet heavily depends on its twin engines.
Corporate profits and cash piles have never been higher. But it's not just an economic imperative that firms get spending and investing, it's their social and moral responsibility to do so.
Three of the four sectors that make up the economy got battered by the global financial crisis and Great Recession:
from The Great Debate UK:
--Darren Williams is Senior European Economist at AllianceBernstein. The opinions expressed are his own.--
The Bank of England appears to have moved the goalposts. After 30 years of focusing almost exclusively on inflation, monetary policy is now being more explicitly directed toward generating faster growth and lower unemployment.
from Global Investing:
A perfect storm seems to be brewing for the Russian rouble. It has tumbled to four-year lows against a euro-dollar basket. Against the dollar, it has lost around 7 percent so far this year, faring better than many other emerging currencies. But signs are that next year will bring more turmoil.
While oil prices, the mainstay of Russia's economy, are holding up, Russian growth is not. It is running at 1.3 percent so far this year and capital outflows continue unabated -- $48 billion is estimated to have fled the country in the first nine months of 2013 compared with $55 billion in 2012. Russia's mighty current account surplus has shrunk to barely nothing and could fall into deficit by the middle of next year, reckons Alfa Bank economist Natalia Orlova. Finally, the rouble can no longer count on the central bank for wholehearted day-to-day support. FX market interventions cost the bank $3.5 billion last month but it also shifted the exchange-rate corridor upwards six times, indicating it is keen to move to a fully flexible currency.
from Global Investing:
By Shadi Bushra
Yet another sign of the growth convergence between developed and emerging markets. Two of the "BRIC' countries have dropped out of the Top-30 in a growth index compiled by political risk consultancy Maplecroft, while several Western powerhouses have nudged their way onto the list.
Maplecroft's 2014 Growth Opportunities Atlas showed that Brazil and Russia -- the B and R of the BRIC bloc -- had dropped 26 and 41 places, respectively - due to slow economic reforms and diversification. The United States, Australia and Germany meanwhile broke into the top 30 on the index, which evaluates 173 countries on their growth prospects over the next 20 years.