UK News
Insights from the UK and beyond
from MacroScope:
Crisis, what crisis, time again in Britain
Britain's recession, like the downturns in most other places, is being hailed as either having reachえｄ bottom or tailed off in its decline. The latest to trumpet the beginning of the end is the British Chambers of Commerce, which said business orders and sales had continued to fall in the second quarter but at a slower pace than previously.
So does this mean that the Bank of England will soon start raising interest rates from the negligible 0.5 
percent reached last year as policymakers sought to pump liquidity into a failing economy? Not according to researchers Capital Economics, which argues in a new report that market assumptions of higher rates at an early stage are misplaced. They offer three reasons:
-- A return to strong levels of activity and rapid price gains in the housing market is unlikely for some time, even at very low interest rates. Meanwhile, the overall economy is likely to expand at only sluggish rates in the foreseeable future. And even if the recovery continues to gather pace, the large amount of spare capacity - or slack - in the economy suggests that there should be no hurry to tighten policy at all.
-- Even when monetary policy is finally tightened, some part of this will involve the reversal of the Bank of England’s quantitative easing programme. Although the likely order of events is far from clear, this could delay the need for a conventional tightening in the form of higher interest rates.
from Global News Journal:
Germany’s Finance Minister takes aim at the City
Has German Finance Minister Peer Steinbrueck finally said what many world leaders think but are afraid to say? That the British government won't sign up to meaningful reform of financial markets because it is too worried about what it would mean for the country’s most famous cash cow, the City of London.
The City, which accounts for around 35 percent of global foreign exchange turnover, has been a popular target for critics of capitalism for years. But it has rarely been singled out so bluntly as a problem by one of Britain’s close allies.
MPs shoot themselves in foot over expenses
The online release of MPs’ expense claims has only served to further dent their already battered reputation.
Forty-two days after the Daily Telegraph began to investigate MPs’ expenses the Houses of Parliament finally got round to publishing official details of them. Or rather it didn’t, as lots of key information was blacked out.
Is powerful Mandy talking up the euro?
When Prime Minister Gordon Brown reshuffled his cabinet last week, fending off a challenge to his authority, a significant outcome was the creation of one of the most powerful ministerial jobs Britain has seen in years.
Peter Mandelson, a former European commissioner who has twice served in British governments in the past and twice been forced to resign, was reconfirmed as secretary of state for business, but also given greatly expanded authorities that make him a powerful if unofficial number two to Brown.
Is Britain being too slow in promoting broadband?
A new report from Ofcom, reveals that more than 30 percent of homes in Britain don’t have basic broadband service.
The study will become part of the government’s Digital Britain report, which is intended to help keep the UK economically and culturally competitive by promoting broadband access.
Time for the people to decide on Britain’s democratic future?
Britain’s embattled political class are falling over themselves to modernise parliament, but given we have fully embraced the Internet age the proposals have a rather tame feel about them.
Gordon Brown’s latest proposals for “democratic renewal” — the reform of MPs expenses and an elected House of Lords to name but two — could hardly be described as Parliament 2.0.
Celebrities fill void of confidence in British politics
These days in Britain, it’s no honour to be a Member of Parliament.
Begrimed by the scandal over their petty expense claims, MPs have fallen so low in the public’s esteem as to displace even bankers and journalists from their usual ranking as the dregs of society.
No wonder. The litany of petty claims revealed by a national paper ranges from the comical — charging a parliamentary expense account for viewing pornographic movies — to the frankly injurious, in the case of MPs who hoarded receipts for garden ornaments to beautify their second homes.
from MacroScope:
UK house prices close to a trough?
MacroScope is pleased to post the following from guest blogger Simon Ward. Simon is chief economist of Henderson Global Investors in London and previously worked for New Star Asset Management and Lombard Street Research. His own blog is Money Moves Markets.
UK house prices are no longer expensive relative to a measure of "fair value" based on rents. Prices fell significantly below fair value during the major house price busts in the 1970s and 1990s but a big undershoot is unlikely in the current downturn because low interest rates will limit forced selling.
from Africa News blog:
A question of scale
For days now Britons have been regaled with newspaper stories detailing the dubious expense claims of their Members of Parliament.
The Honourable Members, it seems, have been charging for everything from a few thousand pounds for clearing a moat to a few pence for a new bath plug. An outraged nation has risen almost as one to denounce its greedy lawmakers.
Is the government being unfair to Gurkhas?
Nepalese Gurkhas have a long and justifiably proud history of serving alongside Britain – Gurkha units fought with the East India Company in India as early as 1817. Over the years, the Gurkhas have developed a reputation for tenacity, bravery and dogged loyalty to their adopted army.
But when it comes to giving something back once they have finished their military service, Britain has something of a mixed track-record on the Gurkhas and has even been accused of disloyalty.
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The Wall
