The Great Debate UK

from UK News:

Budget for votes riskily delays UK debt pain

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BRITAIN-BUDGET/-- The author is a Reuters Breakingviews columnist. The opinions expressed are his own --

Alistair Darling promised no election "giveaways" and in one sense he delivered. The UK finance minister's budget is about not giving away the election. It might have been worse -- if Darling had acceded to his boss Gordon Brown's even more populist instincts. But there are vote-seeking swipes at high earners and banks, as well as a crowd-pleasing but misguided tax cut to first-time house-buyers. The UK's budget-balancing pain is being postponed and concealed. And that's risky.

The headline measure is a tax cut. First time buyers of properties costing up to 250,000 pounds won't have to pay anything to the government. Many voters will like that. They will like it, too, that people buying million pound properties foot the bill. A further bout of bank-bashing was part of the electioneering approach. Given the scandal of City rewards, few will blame Darling.

The economic impact, however, will be limited. The wobbly housing market may be helped slightly. But the UK economy needs to be buoyed by production and exports, not house price inflation.

from Breakingviews:

Stock market rally celebrates bittersweet birthday

Birthdays are a good time to look back. The first anniversary of the global stock market rally -- the lows were hit on March 9, 2009 -- certainly brings back memories. It's easy to see why the MSCI World Index  is 71 percent higher now than then.

Then there was a steep recession, now there is GDP growth. Then it was realistic to worry about such horrors as rapid deflation, serial banking crises and a competitive protectionism. All of those menaces have now receded. And stock market investors can be cheered to see companies sufficiently in control of their short-term destiny for most of them to meet or beat analyst expectations of reported profits.

Whither UK economic policy?

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David Kuo-David Kuo is director at the Motley Fool. The opinions expressed are his own.-

The day of reckoning is looming ever closer.

Political leaders are jockeying for position with ad-hoc appearances here and a flesh-pressing engagements there to curry favour with voters ahead of the general election. How long will it be before we get our first baby-kissing photo opportunity?

But as yet, none of the main parties has told the electorate exactly how bad things are with the UK economy. Instead, they pussyfoot around difficult economic issues in the hope that if they don’t say anything, then maybe we won’t ask.

Double dip or debt crisis for the UK? Sterling heads lower

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-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

The UK may have clawed its way out of technical recession, but over the course of last week data releases highlighted a sharp drop in retail sales and a surge in the claimant count, a spike higher in the inflation rate and record public sector borrowing.

GDP figures show we’re not out of the woods yet

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MarkBolsom-150x150.jpg-Mark Bolsom is the Head of the UK Trading Desk at Travelex, the world’s largest non-bank FX payments specialist. The opinions expressed are his own.-

As expected, Gross Domestic Product figures released today confirmed that the UK has finally emerged from recession. According to the Office for National Statistics, the UK economy grew by 0.1 percent during the last 3 months of 2009, bringing to an end 6 consecutive quarters of contraction.

from The Great Debate:

Welcome to the Teenies, sorry about those returns

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-James Saft is a Reuters columnist. The opinions expressed are his own-

As we say goodbye to a decade so abysmal it never even earned a nickname, it is time to take bets on how the coming 10 years will shape up in economics and financial markets.

Welcome, then, to the Teenies, a word that will describe the decade as well as the small returns in financial markets and the shrinking financial sector it will bring.

Residue of the Great Recession

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Drummond- Don Drummond is Chief Economist at TD Bank Financial Group. The opinions expressed are his own. -

The Great Recession is over in North America.  But repair will be a slow work in progress and great risks remain.  Many of these risks are centred on policy matters.  The recession shook our understanding of some policy matters to the core, leaving more questions than answers.

from UK News:

Has Alistair Darling done enough to revive Labour’s electoral hopes?

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So how was it for you?

Chancellor Alistair Darling threw the dice in his pre-budget report in an attempt to bolster Labour's chances of winning the general election in 2010.

From hitting bankers with a one-off bonus tax to lowering bingo duty, Darling played to the Labour heartlands, while hoping to win back voters who have been telling pollsters that they are done with Gordon Brown.

Pre-budget report delicate balancing act for Darling

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thomas-story – Thomas Story is tax director at BDO. He will participate in a Reuters pre-budget live blog on Dec. 9, at 12 p.m. British time. The opinions expressed are his own. -

Alistair Darling is facing the most difficult set of economic circumstances for any chancellor since the 1940s, with the projected substantial fiscal deficits for 2009 – 2010 and 2010 – 2011 likely to be revised upwards from 175 billion pounds to well in excess of 200 billion pounds. He must perform a delicate balancing act to secure the confidence of the global financial markets while protecting any fragile economic recovery and boosting public confidence.

Why is the UK still in recession when the U.S. isn’t?

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Recent U.S.  gross domestic product data show the world’s biggest economy emerged from recession in the third quarter, while in the UK data show that in the same period Britain’s economy contracted.

British economist and author John Kay theorizes that Britain is mired in its worst recession on record in part because government support has not been evenly distributed across sectors.

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