UK News

Insights from the UK and beyond

from MacroScope:

Brown gets helping hand from Obama

He loves the Queen and the British people. Truth be told, President Obama was always going to be a hit on his first overseas trip.

But Gordon Brown probably could not believe his luck. The prime minister just could not stop grinning as he stood next to the new president at a news conference in the Foreign Office ahead of the G20 summit.

He must have always been hoping for a bit of the Obama magic to rub off on him and revive his battered ratings but he can't have expected the ringing endorsement he got.

Tony Blair and George W Bush. Ronald Reagan and Margaret Thatcher. Britain has always liked to make much of the special relationship between it and America and any doubts it was in danger under Obama could be put to rest this week.

from MacroScope:

Waiting for the G20 to….?

Finance ministers and central bankers from the G20 meet this weekend in the English countryside to discuss the world's financial and economic crisis. With this in mind, MacroScope asked a number of economists what they want to see from the meeting and the G20 summit to follow later and what they expect to see.

The answer, in short, appears to be that much is needed but not much expected.

Paul Mortimer-Lee, head of market economics, BNP Paribas:

"There will be progress on agreeing that regulation needs to be more effective and more effectively co-ordinated on a global scale but I am unconvinced we are going to go a long way further.  Some populist posturing on bank bonuses etc should be expected. The less is achieved in other areas the more this will get played up. On bank recapitalisation, they will all agree strong capital is a good thing, but in no way do I expect a concerted plan -- it's driven by events and the exigencies of the local banking system.

Sorry seems to be the hardest word

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    Alistair Darling may think it’s time for a bit of collective
responsibility, but anyone who thinks Gordon Brown is about to
apologise for Britain’s current economic travails should think
again.

    The prime minister, who loved to boast about abolishing boom
and bust when he ran the Treasury for a decade, is now
contending with the economy shrinking at its fastest pace in
nearly three decades and the prospect of millions out of work.

‘We are all to blame for financial crisis’ – archbishop

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Bankers, auditors, money-market speculators and regulators all came in for criticism at the Church of England’s General Synod during a discussion on the implications of the financial crisis and the recession.

The City had lined its pockets, regulators had not done their job properly and auditors had signed off financial deals that should not have seen the light of day, the synod heard at its meeting in London.

What other options does the Bank have?

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Interest rates have been cut again – to a record low of 1.5 percent. As they get ever closer to zero, the impact of rate cuts will become more and more limited. So what can central banks do to ease the economic pain?

“Quantitative easing”, or what non-economists call “turning on the printing press” is one of the options.

Which gadgets could you do without in a downturn?

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Would you give up your laptop, your iPod or even your mobile to help pay the bills?

Some devices that seemed like luxuries just a few years ago are now seen by many people as necessities.

Has the media made the crisis worse?

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bbc.jpgSince banks and world financial markets started collapsing over a month ago, politicians, commentators and people in the street have pointed the finger of blame in a variety of directions: at bankers, regulators, hedge fund managers, mortgage lenders, short-sellers and speculators, among others.

Now, it appears, the BBC is also in the firing line.

The broadcaster’s economics correspondent, Robert Peston, has broken several major elements of the unfolding story, from which banks were on the brink of collapse to the details of how the government was going to set about bailing them out. BBC radio interviewer John Humphrys has also been at the forefront of the story, grilling government leaders, especially Chancellor Alistair Darling, about the crisis and how the country, and the rest of the world, ended up in it.

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