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It looks like Britain might have to wait a while longer before its much-touted export recovery materialises.
Export orders growth flagged in July, according to two surveys of manufacturers over the last week.
Friday’s UK manufacturing PMI showed export order growth slipped to a four month low – with a warning that it could worsen.
Rob Dobson, senior economist at PMI compiler Markit, said:
“The concern is that the slowdown we are seeing is also a symptom of increased economic uncertainty both at home and in key export markets of Europe, in turn fuelled by worries about the Ukraine crisis. If the situation with Russia deteriorates further, we should expect goods exports to come under further pressure.”
Bank of England rate setters meeting this week should be in cordial agreement that Britain's economy is growing at a decent pace, and that price pressures look mostly in check at the moment.
But when it comes to gauging how quickly slack in the labour market is disappearing – a key question deciding when they should raise interest rates – the surveys look a lot less joined-up.
from Hugo Dixon:
By Hugo Dixon
Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.
The French always protect their national champions, while the British have a laissez-faire approach to foreign takeovers of their top companies, right? That is certainly the caricature. Witness how France deterred PepsiCo from bidding for Danone in 2005 on the grounds that yoghurt was a strategic industry, while the UK allowed U.S.-based Kraft to move ahead with its hostile bid for Cadbury, the confectioner, in 2010.
By Christopher Hughes and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
Time often benefits bidders rather than targets – that’s why U.S.-based food group Kraft left Cadbury flailing for months after making a takeover approach for its UK competitor. But the dynamics of Pfizer’s interest in rival pharmaceuticals group AstraZeneca are unusual. Pfizer has good reason to seek a quick, agreed deal.
On the face of it, the good news for the British government keeps on coming. Britain’s economy grew surprisingly fast last year and inflation fell below the Bank of England’s target for the first time in over four years in January. The government this month even got a nod from the International Monetary Fund which only last year criticized its austerity programme.
The latest confidence boost came from jobless figures on Wednesday. Not only did the unemployment rate fall to a five-year low of 6.9 percent but pay growth caught up with inflation for the first time in nearly four years. That provides Prime Minister David Cameron’s government with another lift ahead of the 2015 elections, after it has come under fire from the Labour opposition for overseeing a fall in living standards.
from Photographers' Blog:
By Toby Melville
After a wet and windy December, in January it rained. And rained. And rained. And it kept on raining. Pretty much for the whole month in southern parts of Britain.
February was no better, bringing heavy storms and high winds. The extreme weather claimed a handful of lives, and flooded thousands of homes.
from The Human Impact:
Earlier this week, the right-wing British tabloid the Daily Mail launched a campaign for the government to divert cash from the foreign aid budget to help victims of the catastrophic floods wreaking havoc in southern England and Wales.
Populist campaigns are nothing new for the Mail, and this one – which attracted more than 100,000 signatures in 48 hours – followed a similar call by populist right-winger Nigel Farage, whose small UK Independence Party (UKIP) wants Britain to quit the European Union and who enjoys thinking up fringe policies which irritate the ruling Conservatives.
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.
By Robert Cole
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Investors’ patience with Tesco, the UK’s largest supermarket operator, is justifiably wearing thin. Shares in the group rose in early trading on Dec. 4, as the company published third quarter sales figures. But that was probably because the numbers were no worse than expected. The stock price slipped back later in the day. Over the last two years Tesco shares have fallen 16 percent while the FTSE 100 has risen 17 percent.