UK News

Insights from the UK and beyond

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.

Take Spain, which has just emerged from two years of recession by posting a third quarter growth rate of 0.1 percent. Technically the Spanish slump is over. But a glance at their job figures shows the country has a long way to go before it can genuinely say it has escaped the diminishing effects of austerity -- in the form of tight fiscal policies, public spending cuts and labor and entitlement reforms -- imposed indirectly by Germany through the European Union.

In Spain, unemployment remains stubbornly high at 26 percent; half of those age 25 and under are still without jobs. More than half those age 25 and under in Greece and Croatia are also unemployed. In Europe, only in Germany and Austria is youth unemployment under 10 percent. Greece and Spain lead the sorry list of European countries with more than 25 percent unemployed, and 13 more are enduring joblessness at more than 10 percent.

from FaithWorld:

Pope, ending his British trip, recalls Nazi terror in WW2

london in blitzPope Benedict on Sunday expressed "shame and horror" over the wartime suffering caused by his German homeland and said he was moved to mark the 70th anniversary of a key air victory with Britons. (Photo: London during the Blitz/U.S. National Archives)

On the last day of a four-day visit to Britain that drew the biggest protest march of any of his foreign trips, the pope also beatified Cardinal John Henry Newman, one of the most prominent English converts from Anglicanism to Roman Catholicism.

from FaithWorld:

Excerpts from Pope Benedict’s sermon on Cardinal John Henry Newman

newman (Photo: Pope Benedict at a beatification Mass for Cardinal John Henry Newman in Birmingham, September 19, 2010/Darren Staples)

Pope Benedict declared the 19th century English Cardinal John Henry Newman blessed -- the first step on the road to sainthood in the Roman Catholic Church -- at a ceremony in Birmingham on Sunday.

Here are excerpts from his sermon:

“…This particular Sunday also marks a significant moment in the life of the British nation, as it is the day chosen to commemorate the seventieth anniversary of the Battle of Britain. For me as one who lived and suffered through the dark days of the Nazi regime in Germany, it is deeply moving to be here with you on this occasion, and to recall how many of your fellow citizens sacrificed their lives, courageously resisting the forces of that evil ideology. My thoughts go in particular to nearby Coventry, which suffered such heavy bombardment and massive loss of life in November 1940. Seventy years later, we recall with shame and horror the dreadful toll of death and destruction that war brings in its wake, and we renew our resolve to work for peace and reconciliation wherever the threat of conflict looms…”

from MacroScope:

UK GDP: Should have gone to Specsavers?

twice as fast as expected in the second quarter of this year propelled by a sharp pick-up in services and the biggest rise in construction in almost 50 years.

Markets are getting used to volatile swings in economic data since the financial crisis set in three years ago. But UK GDP figures for Q2 were so eye-poppingly strong they caused confusion on trading floors.   

 

"Should have gone to Specsavers??" wrote Philip Shaw, chief economist at Investec, referring to British television commercials lampooning myopic citizens who desperately need a new pair of corrective lenses.

from MacroScope:

It’s all Germany’s fault

It is fairly commonplace at the moment for U.S. and UK financial analysts -- what continental Europeans call the Anglo-Saxons -- to predict the collapse of the euro zone,  a project they were mostly sceptical about in the first place.  MacroScope touched on this on two occasions in March.

The latest foray into this area comes from Alan Brown,  global chief  investment officer at the large UK fund firm  Schroders. But he does it with twist,  blaming what he sees as the eventual  collapse of the euro zone not on the structure itself nor  on the profligacy of peripheral economies, but on Germany's response to the crisis.

from Reuters Soccer Blog:

England defence crumble in German masterclass

SOCCER-WORLD/

England coach Fabio Capello would do well to take a transcript copy of Germany coach Joachim Loew’s post-match press conference – because in it he would find all the simple reasons why his side were trounced 4-1 and sent packing from the World Cup on Sunday.

In it, Loew rather clinically explained to the international press sat before him that his side were instructed to target John Terry, pull him out of position and pretty much walk into the huge gaps created in England’s snail-paced central rearguard.

from The Great Debate UK:

Getting to grips with the post-Cold War security threat

johnreid -John Reid, formerly the UK Defence Secretary and Home Secretary, is MP for Airdrie and Shotts, and Chairman of the Institute for Security and Resilience Studies at University College, London. The opinions expressed are his own. -

The fall of the Berlin Wall, on November 9, 1989, was one of history’s truly epochal moments. During what became a revolutionary wave sweeping across the former Eastern Bloc countries, the announcement by the then-East German Government that its citizens could visit West Germany set in train a series of events that led, ultimately, to the demise of the Soviet Union itself.

Twenty years on, what is most striking to me are the massive, enduring ramifications of the events of November 1989. Only several decades ago, the Cold War meant that the borders of the Eastern Bloc were largely inviolate; extremist religious groups and ethnic tensions were suppressed, there was no internet (at least as we know it today) and travel between East and West was difficult. The two great Glaciers of the Cold War produced a frozen hinterland characterised by immobility.

from The Great Debate UK:

Vauxhall future is headache for Mandelson

jb2- John Bowker is Reuters’ UK transport and defence correspondent. The opinions expressed are his own -

Lord Mandelson was in buoyant mood on Thursday night.

The future ownership of British car-maker Vauxhall had finally been decided. U.S. giant General Motors agreed to sell its European unit -- which includes Vauxhall -- to Canadian car parts maker Magna and its Russian backers. According to Mandelson, this was good news for the Vauxhall's 5,000 British workers as it removed the uncertainty over their futures. Everyone can get back to work making cars and live happily ever after.

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.

from MacroScope:

Watch out for the G20 spin

Be careful this week about buying wholeheartedy into any G20-related spin about supposedly savvy, free-spending Britain and America doing more to combat the world economic crisis than supposedly stubborn, overly cautious Germany and France. The actual figures show it is much more complex than that.

A Reuters calculation on discretionary fiscal stumuli and the International Monetary Fund's assessment show that, if anything, Britain is the significant laggard and that German spending almost matches the United States over the next two years. Here are the IMF's numbers (% of GDP):

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