UK: 6th Q of Recession
Its the longest slump since Britain began keeping records in 1955, and yet the contraction data is “unexpected.” Who are these people that are always “confounded”?
“Initial data on British third-quarter growth showed the economy there remained mired in recession, while survey releases from the euro area Friday presented a picture of steadily improving economic activity. A preliminary release from the Office of National Statistics in London showed that Britain’s economy remained deep in recession during the third quarter. Gross domestic product contracted by 0.4 percent between July and September from the previous three months and shrank by 5.2 percent compared with a year earlier, the agency said.
The data confounded analysts, who had expected a 0.2 percent growth on the quarter, based on recent improvements in housing, purchasing managers’ indexes and the weak pound, which should make exports more competitive.”
“Confounded”? Really . . . ?
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Over reaction: BRITISH POUND (S.B.S) Dec 2009
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Sources:
U.K. Economy in Recession for 6th Straight Quarter
MATTHEW SALTMARSH
NYT, October 23, 2009
http://www.nytimes.com/2009/10/24/business/global/24euro.html
U.K. Economy Unexpectedly Shrinks in Longest Slump
Jennifer Ryan
Bloomberg October 23, 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aA4yuANivXCQ
U.K. Economy Shrinks 0.4% in Third Quarter
ALISTAIR MACDONALD and LAURENCE NORMAN
WSJ, October 23, 2009
http://online.wsj.com/article/SB125628626596003463.html
October 23rd, 2009 at 6:30 am
They are confounded because they were pretty sure we were in a “mini-boom”…heh
October 23rd, 2009 at 6:44 am
I’m surprised they didn’t lie their way into “growth”, that shows you how bad it really is.
October 23rd, 2009 at 7:25 am
http://money.uk.msn.com/markets/articles.aspx?cp-documentid=150401951
Recovery hopes dashed
“The economy now looks unlikely to grow by more than 1% at best next year. Similarly, with a huge amount of slack still building, we continue to think that deflation is a key risk.”
The long road to recovery
Tory former chancellor Lord Lamont said: “I am not surprised by this grim figure. We have a long stony road ahead. We are living on our sovereign credit card and it cannot go on indefinitely.
“The problem ahead is that the economy is dependent on the stimulus and the stimulus cannot go on forever.”
…For those of you who dislike the NYT sign in process, this is the same story, available from MSN/UK…although we are not GB, nor are we Japan, the response of government officials to the news, and their lack of any plan other than more debt is telling. I thought it interesting that the reporter also felt the French were better off than the British since they have come out a little bit sooner than the Brits. This feeling I found amusing….
October 23rd, 2009 at 7:36 am
http://www.chicagotribune.com/business/sns-ap-us-earns-american-express,0,5967750.story
NEW YORK (AP) — American Express Co. reported its eighth straight quarter of falling profits on Thursday as consumers spent and borrowed less.
However, while the New York-based credit card company reported a 22 percent drop in earnings, it said there are signs that the decline in spending could be stabilizing and the rise in loan losses easing.
Investors viewed the report with caution, sending the stock down 34 cents to $36.10 in after-hours trading. Shares had gained $1.34, or 3.8 percent, to close regular trading at $36.44 before the report’s release.
In the U.S. card business, the percentage of loans AmEx thinks won’t be repaid rose to 8.9 percent from 5.9 percent a year earlier. However, the rate of losses slowed from 10 percent in the second quarter.
…the new reality…..
October 23rd, 2009 at 9:10 am
“I’ll not buy this record, it is scratched.”
“No, this is a Tobacconist, Tobacco.”
“Ah, I’ll not buy this Tobacconist, it is scratched.”
October 23rd, 2009 at 9:16 am
They must be the same ones who were surprised that Ontario has a record projected deficit of $24.7 B (CAD) and that the provincial economy is still shrinking…
Strangely, the finance minister hasn’t yet decided what his battle plan will be to get it under control….
http://www.thestar.com/news/canada/article/714276–ontario-deficit-billions-more-than-expected
October 23rd, 2009 at 9:27 am
http://blogs.telegraph.co.uk/finance/edmundconway/100001543/this-recession-just-became-a-depression/
“Although it is fashionable to pin all the blame on the economists, I admit that these figures took me rather by surprise too. I had assumed for a while that the weak pound would have helped boost the economy more than it appears to have. The fact is it seems as if the sheer force of the credit crunch and financial crisis has been so overwhelming in the UK that even the oomph of a devaluation and quantitative easing has failed to prevent a terrific recession.”
Devaluation would have been a good idea if the UK was an isolated case but the crisis is global, same goes for the Dollar. You can try to sell all your stuff cheaper, but if there are no customers, you’re still screwed.
October 23rd, 2009 at 2:42 pm
It’s a bit like saying “I don’t think anyone expected the levies to fail” in public a few days after someone warned you on a video conference that the levies might fail.
Don’t believe the hype, it’s a sequel.