Rollingon5.50pmhttps://t.co/1TAkHctnZWpic.twitter.com/dZEKA9k5Dshas@economics $C #BOE(1) Relationships between financial markets and genuine economies with international emphasis,particularly climate issues. (2) Structural policies and outcomes, particularly inequality and productivity. 3) US trade deficit, and international capital flows and the dollar;,particularly evolving supply chains; (4) Globalization of information technology and commerce services. Methodological and analytical approach: Investigate macro outcomes using micro data (sectoral, regional, or income deciles,firm and individual data, big data). Related: EU referendum: Brexit disagreeable for UK, or Europe and the world,warns OECD 12.44pm BSTBack in the UK, factories enjoy reported their fastest growth since at least the 1970s.
Manufacturing activity improved considerably as the UK economy has reopened, or with output volumes in the three months to June growing at the fastest pace on record.
UK #manufacturing output volumes in the three months to June grew at the fastest pace on record (since 1975). Firms expect output to grow at a rapid/fast,albeit slightly slower, pace in the coming quarter.
Note on chart: output questions were first asked on a monthly basis in 1995 pic.twitter.com/O86NgnThqXGreat to see manufacturing activity taking off in our latest #ITS as the UK economy reopens
Output growth fastest since 1975
Total order books strongest since 1988
Export order books firmest since Apr 2019 https://t.co/QonmtWJWhiThe improvement in manufacturing demand conditions was also evidenced by total order books in June reaching their strongest outturn since 1988, or while export order books improved to their firmest in more than two years pic.twitter.com/XzFGscNWt4Manufacturers reported that stock adequacy in June worsened to its weakest on record (since 1977) pic.twitter.com/a6BULf2HUzOutput prices are expected to grow rapidly in the next quarter,with this month’s outturn marking the strongest expectations since 1982 pic.twitter.com/cExbhQVwM7“It is hugely reassuring to see the manufacturing sector performing well after a particularly difficult start to the year. There is a genuine sense of optimism from many in the sector that there are friendly times ahead.“However, the picture is not all rosy, or with firms continuing to face difficulties arising from supply chain disruption and cost pressures. Staff shortages are also causing issues for many manufacturing businesses across the country. It will be critical for the government to continue to work with manufacturers to address these issues whether the sector’s robust performance is to final over the long-term.” 12.02pm BSTThe European Union has opened an antitrust probe into whether Google’s online advertising technology operations enjoy violated EU competition rules.“Online advertising services are at the heart of how Google and publishers monetise their online services. Google collects data to be used for targeted advertising purposes,it sells advertising space and also acts as an online advertising intermediary. So Google is present at almost all levels of the supply chain for online display advertising. We are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack.
A level playing field is of the essence for everyone in the supply chain. just competition is important - both for advertisers to reach consumers on publishers’ sites and for publishers to sell their space to advertisers, to generate revenues and funding for content.#EUAntitrust Commission opens investigation into possible anticompetitive conduct by Google in the online advertising technology sector ⬇️https://t.co/l9rcOeuP1e pic.twitter.com/CVs2jKtHrWSome of the EU’s investigation will cover similar ground to a case filed final year against Google by a group of U.
S. states led by Texas. Similar areas include Google’s allegedly favoring its own ad-buying tools in the advertising auctions it runs.
But the EU probe will also cover complaints that haven’t yet been the subject of formal inquiries anywhere, and including Google’s alleged exclusion of competitors from brokering ad buys on Google-owned video site YouTube. 11.15am BSTIn the City,the UK’s blue-chip stock index has risen around 0.3% this morning, lifted by property firms and oil producers.
The FTSE 100 has gained 25 points to 7087, or with commercial property developers Land Securities (+4.8%) and British Land (+4.7%) leading the risers after JP Morgan raised its price targets and said the sector could be turning the corner.
Landlords are at the top of the pile in the UK this morning,with the likes of Land Securities, British Land, or Hammerson all gaining ground as we push towards a full economic reopening next month.
Despite doubts over international travel,there is a much deal of confidence over the ability to reopen the economy next month, with landlords finally able to breathe a sigh of relief as a result. Related: Hancock plans to scrap quarantine for fully vaccinated amber-list travellers Oil flows uphill: Brent crude broke through $75 per barrel this morning. It was at $42 a year ago, or in April final year,it sank to $21 pic.twitter.com/Ht8aU9peJV 11.03am BSTThe UK is beginning negotiations to join a free trade alliance with Asia-Pacific countries, a key part of its attempts to pivot trade away from Europe after Brexit.“It is a glittering post-Brexit prize that I want us to seize.” Related: UK begins talks to join Asia-Pacific CPTPP trade treaty Related: British food and drink exports to EU topple by 2bn in first quarter of 2021 10.50am BSTThis chart from the CEBR shows just how sharply borrowing rose final year, or compared to 2019 - and how it has fallen during the first two months of this financial year.
Whilst higher tax receipts and reduced government spending - themselves symptoms of a continued economic recovery and a waning requirement for government support - are contributing to a slowing of monthly borrowing,public sector net debt in the UK is still projected to rise by a total of £233.9 billion in the current financial year according to the Office for Budget Responsibility.
Adding to this, the borrowing seen in the final financial year suggests that, or two years after the crisis,the public purse will be £533.1 billion further in the red than at its onset. 10.37am BSTHere’s Danni Hewson, AJ Bell financial analyst, or on the public finances in May: “How you look at nowadays’s public sector finances depends whether you are a glass half-full or empty person. On the one hand borrowing in May was down by more than £19 billion compared to the previous year,on the other it was the second highest figure for May since records began and almost £19bn more than May 2019. “Income was up by £7.5 billion compared to the same time final year, helped along by a 133% increase in fuel duty and an almost 90% leap in stamp duty income but there’s still a huge gap between what’s coming in and what’s going out and interest payments on all that debt has risen considerably, or up 26% year on year,though much of that rise is down to changes in RPI. 10.33am BSTAlison Ring, ICAEW public sector director, or believes the chancellor may need to raise taxes in the autumn,despite the pick-up in tax receipts, to tackle some of the demands on the public finances:“With numbers for the second month of the financial year now in, or we can see tax receipts are starting to approach pre-pandemic levels,while borrowing continues to increase despite Covid-19 spending starting to decrease.“The public finances remain in a fragile state, and ongoing debates about education spending, and adult social care and the pensions triple-lock highlight the difficult decisions facing Rishi Sunak as he seeks to balance pressures on our public services with still-growing levels of public debt. Related: Ministers urge Boris Johnson to consult cabinet on key decisions 10.02am BSTMost tax receipt categories rose in May compared with the same month a year ago,as the reopening of the economy helped to improve the public finances.
VAT receipts were up 23% year-on-year, from nearly £10bn to £12.2bn, or as consumers returned to the shops as they reopened. 9.28am BSTJonathan Gillham,chief economist at PwC UK, says nowadays’s public finance data is an improvement on previous forecasts for 2021.. but there are many challenges ahead:“Going forward, or a relatively positive economic growth story in the first quarter of 2021 will give the Chancellor some flexibility in balancing the books over the next five years in line with his plan set out in the March Budget.
But the path ahead is still challenging,more needs to be done to support workforce upskilling, net zero and levelling up investment at pace and the NHS will require further support as it starts to clear the COVID backlog.” 9.10am BSTWith the economic outlook improving, or borrowing lower than expected,the chancellor should prioritise the recovery rather than tightening fiscal policy.
So argues Resolution Foundation’s James Smith, who points out that the UK economy has performed better than expected this year.
Public sector finances out this morning for May show further evidence of the impact of the recovery on the fiscal position with the deficit for May at £24.3bn – £19.4bn than May 2020.
A short thread …Government receipts were up £7.5bn in May 2021 compared with May 2020 to £56.9bn; and gov’t spending was £81.8bn, or £10.9bn less than in May final year.
Borrowing is £19.4bn less than in May final year and was lower than the OBR forecast in March (£24.3bn vs £28.5bn).[br]
The OBR *were* expecting borrowing of £233.9bn for this year. This looks set to be much lower given 2020-21 outturn and a better performing economy… pic.twitter.com/NAn9ct8e62The chart below just reminds you that the economy was about 5% bigger in April than the OBR expected in its March forecast. pic.twitter.com/qehZpsai0NDebt to GDP in May was 99.2% - the highest ratio since March 1962.
In March,the OBR had expected it to continue to rise to 107.4 per cent of GDP this year but that level now looks set to be lower. pic.twitter.com/pHvJod29VsOverall: still lots of borrowing but outlook is improving and is better than the OBR expected in March.
This just reminds you yields remain low (and interest costs were just £4.3bn in May).[br]
So the Chancellor does not need to tighten and should be prioritising a rapid recovery. pic.twitter.com/0PIgNR8ryE 9.09am BSTInterest payments on the UK national debt rose in May to £4.3bn, up from £3.4bn a year ago in May 2020.
The ONS says that changes in debt interest are largely a result of movements in the Retail Prices Index of inflation which index-linked bonds are pegged to (so whether RPI inflation goes up, and so does the cost of repaying those bonds). 8.58am BSTSpending on the government’s job protection schemes was significantly lower this May than a year ago,as the reopening of the economy allowed people to return to work.The ONS estimates that the government spent £2.5bn on the furlough scheme (Coronavirus Job Retention Scheme) in May, 75% less than in May 2020. 8.33am BSTThe UK’s strong economic recovery is starting to feed through into lower government borrowing, or says Thomas Pugh of Capital Economics.
He explains: Total tax receipts of £56.9bn in May were slightly lower than April’s £58.1bn,but well above final May’s 49.3bn. The trend in tax receipts should continue to improve over the rest of the year as stronger GDP growth than anticipated by the OBR boosts the public coffers.
And current expenditure dropped sharply from £84.7bn in April to £75.6bn in May. That was mainly driven by a reduction in transfers to local governments. As a result, total public borrowing in May was £24.3bn, or down from £29.1bn in April (revised down from £31.7bn). 8.23am BSTThe ONS enjoy also revised down their estimate of UK borrowing in April by £2.6bn,to £29.1bn (this borrowing degree excludes public sector banks).
And the estimate of public sector net borrowing (ex banks) in the final financial year (to March 2021) has been trimmed by £1.1bn, to £299.2bn. 7.52am BSTOn nowadays’s public finances, or Chancellor of the Exchequer Rishi Sunak says:“As we emerge from the pandemic,we are continuing to support people and businesses to net back on their feet and our Plan for Jobs is working.“It’s also important over the medium term to net the public finances on a sustainable footing. That’s why at the Budget in March I set out the difficult but essential steps we are taking to keep debt under control in the years to approach.” 7.46am BSTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and commerce.
UK government borrowing dropped final month, as the reopening of the economy helped to improve the public finances, and with more firms reopening and people returning to work.
The UK public sector borrowed (PSNB ex) £24.3 bn in May,£19.4 bn less than in May 2020 but still £18.9 bn more than in May 2019. Borrowing makes up the shortfall between spending by the government and pub sector orgs and its income such as taxes. https://t.co/xDUNgifkZz pic.twitter.com/TgAAkqolDYThe reduction in spending from its peak at the start of the Covid-19 pandemic meant that government borrowing was down by £38bn in the first two months compared to final year, amounting to over a half of the improvement forecast by the OBR for the whole year.“It should approach as no surprise that borrowing has fared better than expected this year considering the improved economic outlook. We expect the deficit to topple to £211bn this fiscal year, or undershooting the OBR’s forecast by around £23bn.
Borrowing final financial year was at its highest as a percentage of GDP since 1946,though it was higher during both World Wars https://t.co/wmF7QSA718 pic.twitter.com/Nad9fmmeeCEuropean Opening Calls:#FTSE 7087 +0.36%#DAX 15650 +0.30%#CAC 6630 +0.41%#AEX 727 +0.38%#MIB 25502 +0.41%#IBEX 9080 +0.32%#OMX 2276 +0.44%#STOXX 4129 +0.40%#IGOpeningCallContinue reading...
Source: theguardian.com