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Insights from the UK and beyond

from Breakingviews:

Why the UK is growing and the euro zone isn’t

By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

British growth is forging ahead of the euro zone’s. UK austerity has been more effective, the pound is cheap, the housing market suddenly all too lively. But British simplicity also helps. A Germanically strong euro weighs heavily on a still systemically challenged zone.

Europe’s crisis outcomes could hardly be more divergent. According to Eurostat estimates, Germany’s GDP will end this year 4.2 percent bigger than its pre-crisis peak, France 0.7 percent bigger and the UK 1.9 percent smaller. But the euro periphery has been hammered, with the Spanish, Italian and Greek GDPs down by 5.9 percent, 8.7 percent and 23 percent respectively.

Though the UK’s crisis has been deep and long, its current pace of growth – an annualised 3 percent in the past two quarters – suggests it’s forging ahead. The zone grew by just 0.1 percent in the third quarter.

from Anatole Kaletsky:

British economic governance encounters turbulence

Students of British history will recall the story of Thomas a’Becket, the 12th century prelate who was handpicked by Henry II to become Archbishop of Canterbury because of his loyalty to the Crown. Within months of his appointment, a’Becket turned against the King in the numerous conflicts between church and state. As a result, a’Becket was murdered at the altar of Canterbury Cathedral in 1170, after four of Henry’s henchmen heard their royal master mutter in irritation: “Will no one rid me of this turbulent priest?” Archbishops do not have much political clout these days, but comparable spiritual importance now attaches to central bankers. And a central banker who suddenly seems reminiscent of Thomas a’Becket is Mark Carney, the recently appointed governor of the Bank of England.

When George Osborne, the British chancellor of the Exchequer (finance minister), delivered his Autumn Statement on Britain’s economic and fiscal prospects this week, he intended it as a “soft launch” for the Tory-Liberal government’s campaign for re-election in May 2015. The big set-piece speech offered Osborne an ideal opportunity to boast about the British economy’s sudden improvement this year and to announce some populist measures, such as a “voluntary” price-control regime for energy utilities, that were carefully designed to wrong-foot the Labour opposition. Osborne’s speech marked the start of a long political campaign designed to create a Pavlovian association in voters’ minds between government policies, rising house prices and the economic recovery. If this campaign is successful it will virtually guarantee election victory for the Tory-Liberal coalition -- and it could even make an outright majority for the Tories conceivable in 2015.

from The Great Debate UK:

Only paying teachers more will raise Britain to the top of the class

--Vikas Pota is chief executive of the Varkey GEMS Foundation. The opinions expressed are his own.--

It was results day yesterday for education ministers around the world, and where they’ve come in the class will affect their prospects just as surely as a sixth-former opening their brown envelope. Nowhere around the world will the wait have been more nail-biting than in Michael Gove’s Department for Education.

from Breakingviews:

BoE’s small-firm stimulus is blueprint for Draghi

By Neil Unmack

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The euro zone is no longer collapsing, but credit is. The European Central Bank is reportedly considering giving banks cheap loans to stimulate lending. The Bank of England’s so-called Funding for Lending scheme shows that’s tricky, but the euro zone shouldn’t hold back.

from John Lloyd:

The inconvenient voters of Europe

Sixty years ago, pondering the question of an unruly populace, the German playwright Bertolt Brecht mused, “Would it not be easier / In that case, for the government / To dissolve the people / And elect another?”

It was a rare piece of ironic criticism of East Germany’s communist regime for Brecht, since he usually supported it. But after the regime’s suppression of a workers’ revolt in 1953, he spoke out. It’s one of his most famed observations, trotted out whenever a populace is ungrateful enough to vote “against their own good.”

from The Great Debate:

Kennedy’s assassination, from the eyes of a British newspaperman

I heard the first uncertain fragment on BBC Radio. I was wearing a dinner jacket, driving in the dark to a press ball in Teesside in the industrial northeast of England. This dinner dance was quite an occasion for me. I was the new boy, early thirties, putting in a first appearance as an editor at a big social event where all the rival purveyors of news hobnobbed with mayors, MPs, police chiefs, bosses of the coal mines, steel mills and shipbuilding yards: in short, all the news sources of the entire northeast we covered.

I guess it was near 7 p.m. UK time when I heard the flash. President John F. Kennedy had been shot at 12:30 p.m. Texas time. I was 20 miles from the offices in Darlington where I'd just been entrusted with the editorship of the Northern Echo (circ. 100,000). It was, and is, a regional morning daily with a glorious heritage going back to the sensational editorship of W.T. Stead in the 1870's (he died on the Titanic), but with its circulation of 100,000 ebbing before the challenge of nine national dailies, two rival regional dailies, three city papers and TV and radio.

from Photographers' Blog:

At Duxford Airfield, Spitfires still rule the skies

Duxford, England

By Neil Hall

Propellers whirring, a group of Spitfire aircraft zooms in formation across the sky over Duxford Airfield, one of the first stations of Britain’s Royal Air Force (RAF).

It could be a scene straight from the 1940 Battle of Britain, when British and German fighter planes vied for control of the skies in one of the key clashes of the Second World War. But this is 2013, and the shapes streaking over the landscape are models that have been worked on by the Aircraft Restoration Company, a firm dedicated to repairing historic planes, mostly for private owners.

from Nicholas Wapshott:

No, austerity did not work

There have been a lot of sighs of relief in Europe lately, where countries like Britain and Spain, long in recession, have finally started to grow. Not by much, nor for long. But such is the political imperative to suggest that all the misery of fiscally tight economic policies was worth the pain that there are tentative claims the worst is now over and, ipso facto, austerity worked.

Hold on a minute. Growth is good. Growth is what allows countries to pay down their national debt by increasing economic activity, putting the unemployed to work and making people prosperous enough to pay taxes. But gross domestic product growth alone is not enough to provide adequate sustained prosperity if it does not also lead to significant job growth.

from John Lloyd:

Russell Brand’s socialist revolution

Russell Brand, the British comedian, used a guest editorship of the 100-plus-year-old leftist magazine New Statesman last month to call for a “total revolution of consciousness and our entire social, political and economic system.” Capitalism, and the ideology that sustains it -- “100 percent corrupt” -- must be overthrown. He also doesn’t think people should vote, as partaking in democracy would further the illusion that a rotten system could change. It was a call, albeit chaotically phrased, for a socialist revolution.

Born into the middle class, Brand’s childhood was disturbed: his photographer father left when he was six months old, his mother developed cancer when he was eight (but survived), he left home in his mid-teens and took to drugs. He later became a star, delighted in promiscuity, married the singer Katy Perry for a year and a half and grew modestly (by star standards) rich, with an estimated net worth of $15 million and a lovely new Hollywood millionaire bachelor’s pad.

from Hugo Dixon:

The City has huge scope to expand

Finance has rightly been in the sin bin for the last six years. And the cleanup job isn’t finished. But Mark Carney, the new Bank of England governor, is correct to stress how a large and expanding City of London is good for Britain, Europe and the world – provided it is properly organised.

Carney’s comments, in a speech last week, will seem heretical to many – maybe even to his predecessor, Mervyn King, who showed a barely disguised disdain for financiers. Would it really be healthy, for example, for the balance sheets of British banks to reach nine times GDP, double the current ratio – as Carney projected they could by 2050?

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