• 11th August 2017

    Economics

    Week in Perspective - 11 August 2017

    Economic Roundup

    Britain’s trade balance worsened in June as exports slumped, according to the Office for National Statistics (ONS).

    The UK’s trade deficit in goods and services widened by £2bn to £4.5bn - its biggest monthly trade gap since September last year.

    The main culprit was lower exports - it was the worst month for export volumes since the EU referendum in June 2016. Imports also rose by £1.7bn.

    The latest data comes despite the weak pound making exports more price competitive.

    The ONS also released data showed UK industrial production improving by a better-than-expected 0.5% in June. While manufacturing production was flat, that was an improvement on the 0.1% fall in May. But construction output was weak, with the sector contracting 1.3% in the second quarter.

    Data from Visa/Markit showed consumer spending declined 0.8% in July compared to 12 months earlier. This follows falls in May and June and is the first time spending has contracted for three consecutive months since 2013.

    Transport and communication spending was worst hit, with a 6.1% drop. Clothing and footwear fell by 5.2% and household goods suffered a 4% fall.

    Meanwhile, a survey by the British Retail Consortium (BRC) and KPMG showed that retail sales growth slowed to 0.9% in July, down from 1.2% in June.

    The BRC said a 2.3% increase in food sales was driven mainly by rising prices, while non-food sales declined by 0.7%. The research suggests that with rising inflation and limited pay increases, more of household income is going on food and other essentials, squeezing out other spending.

    Two reports highlighted the increasing difficulties companies are having recruiting suitable workers. A monthly survey of businesses by the Bank of England found firms facing recruitment strains, with the difficulties spreading across all areas of the economy.

    A report by the Recruitment and Employment Confederation with Markit also said that employers are finding it harder to recruit staff as the number of available workers shrinks.

    House prices enjoyed a strong month-on-month rise in July, up 0.4% according to Halifax. But the year-on-year rate of growth continued to fall to 2.1% - the lowest annual increase in four years. The average price of a home is now £219,266, according to Halifax.

    Howard Archer, an economist at EY Item Club, said: “Housing market activity is currently lacklustre and stuttering amid weakened consumer fundamentals.”

    Click here to read this week's market roundup and Company Focus on Legal & General 

     

    Important Notes:

    Main source of information: Company Report and Accounts, Bloomberg

     

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    Economics

    Autumn Statement 2016: What you need to know

    Chancellor Philip Hammond stepped up today to present what will be his first - and last - Autumn Statement to the House of Commons. As expected he promised to boost government spending on infrastructure, including investment in roads, rail, housing and broadband, as part of a commitment to “build a country that works for everyone”. Other predicted measures such as a fuel duty freeze, and a widely-trailed crackdown on letting agents’ fees also made the cut. However, the Chancellor also found time to deliver some surprises.

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    Week in Perspective - 01 July 2016

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