Lower borrowing fails to lift Treasury gloom

By Angela Monaghan

Published: 11:42PM GMT 13 Mar 2010

Figures published on Thursday by the Office for National Statistics are
expected to show that the Government borrowed £14bn in February, £5bn more
than the £9bn it borrowed in the same month last year.

However, despite the higher level, economists said it would leave the
Chancellor well-positioned to undershoot his full-year borrowing projection
of £178bn, announced in the 2009 pre-Budget report (PBR) in December.

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UK economy ’still growing weakly’

The UK economy is still growing weakly, a study has said, expanding by 0.3% in the December to February period.The economic expansion came despite the impact of the heavy snow in January, said the National Institute of Economic and Social Research (NIESR). Its latest economic growth data comes a month after official figures were revised up to show the economy expanded 0.3% in the final quarter of 2009. The Office for National Statistics had earlier reported growth of 0.1%. The NIESR growth figure for the three months to February is in comparison with the September to November period. The research body said it did not expect UK economic output to return to the peak seen at the start of 2008 until 2012. Earlier on Wednesday, the Office for National Statistics said that UK industrial production had fallen by 0.4% in January because of the impact of the bad weather. This was the biggest monthly decline since August last year.

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Pound falls below $1.50 again as credit agency warns that efforts to cut deficit are moving at ‘pedestrian pace’

By
Daily Mail Reporter
Last updated at 5:05 PM on 09th March 2010
The Government’s attempts to tackle its mounting national debt are taking place at a ‘pedestrian pace’ that is ‘too slow’, an influential ratings agency warned today.In a boost to the Tories, Fitch insisted that the shortfall in the country’s finances must be reduced quickly because the nation’s credit profile has ‘deteriorated’.Its head of global economics Brian Coulton warned: ‘If we don’t get an
improvement in the medium-term outlook in the UK, there will be cause
for concern.’The declaration sparked fresh fears about the strength of the UK’s
economic recovery and prompted the pound to hit a week-long low of
$1.4965 against the dollar this afternoon.And there was further dire economic news as new figures showed that exports took their biggest plunge in more than three
years in January.
Heavy snow in Hampshire in January. Experts believe the bad weather may have affected exportsExports fell by £1.4 billion to £19.5 billion December in the
biggest month-on-month fall since July 2006, according to the Office
for National Statistics (ONS).Fitch believes Britain should cut its deficit to 3 percent of GDP by
March 2015 instead of the planned 4.4 percent. The shortfall
is currently about 12 percent.The Tories seized on the comments as further proof that their plan to start bringing down public debt this year, in contrast to Labour, is the right way forward.

The two parties are locked into a bitter battle over public spending, which is set to be a key battleground throughout the election campaign.Shadow chancellor George Osbore said it is the ‘clearest possible
warning’ that Labour’s  plan is not enough to protect Britain’s coveted
AAA credit rating.
The pound has fallen over the past three month against the dollar
‘The red light is flashing over the British economy and we have a
choice - action with the Conservatives to secure the recovery or more
dither and delay with Gordon Brown that puts our economy at risk,’ he said.Experts said that the impact of the recent bad weather and heavy snow may have been to blame for the poor export figures.GREEK PM’S WARNING FOR BARACK OBAMAGreek Prime Minister George Papandreou, pictured, has warned Barack Obama that the United States cannot afford to ignore the financial woes of his country and, by extension, Europe.
‘For America, a weak euro means a rising dollar. That, in turn, means a rising U.S. trade deficit,’ Papandreou said yesterday. ‘If the EU, still America’s biggest trading partner, should falter, the consequences here would be palpable.’Speaking ahead of a meeting with Obama today, Papandreou also said he is not looking for a handout from Washington. Instead, Greek officials want to see the United States impose stricter regulations on hedge funds and currency traders, which Athens believes aggravated their crisis.In his meeting with Obama today, and in sessions during the week with Secretary of State Hillary Clinton, also pictured, and Treasury Secretary Timothy Geithner, Papandreou will outline the steps Greece is taking to stem its financial bleeding and reform its economy.
JP Morgan economist Malcolm Barr said: ‘It is plausible that the snow disruption was more of a constraint on the ability to get UK exports to airports and the dockside than it was on receiving imports.’Exports to the US were the biggest casualty over the month, with a £500 million slide.The overall decline far outstripped a 1.6 per cent decline in imports - leaving the UK’s goods trade gap with the rest of the world widening from £7billion to £8billion in January.This is the biggest trade gap since August 2008 and undermines hopes
that a weaker pound will boost exports and help rebalance the economy.Experts
warned the poor trade figures would continue to act as a drag on
recovery during the first quarter of 2010, having knocked off 0.2
percentage points from the UK’s 0.3 per cent growth in the final three
months of 2009.Vicky Redwood of Capital Economics said: ‘There
is clearly a big question mark over whether any improvement in net
trade will come through quickly or strongly enough to offset the
weakness in domestic demand.’The British Chambers of Commerce
also warned that the Government needed to do more to support trade
after a survey of 250 exporting businesses which found that one in
eight had experienced problems securing access to trade finance over
the past year.David Frost, director-general of the British Chambers of Commerce
(BCC), said: ‘If the Government is serious about encouraging British
exports as a driver of employment, economic growth and prosperity, it
must resolve blockages in the finance that underpins UK global trade.’Our exporters need to be able to compete more effectively with rivals on the continent and further afield, who are currently better supported during difficult economic environments or in riskier foreign markets.
UK trade fell by almost 7% last month

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Two-thirds of workers ‘put nothing into pension last year’

Published: 12:46PM GMT 01 Mar 2010

Just 35pc of private sector workers were active members of a company pension
scheme during the year, down from 37pc in 2008 and 45pc a decade earlier,
according to consultancy Towers Watson, which analysed figures from the
Office for National Statistics.

The number of people who were members of a defined benefit scheme, such as a
final salary pension, has also more than halved during the past 10 years.
Only 12pc of private sector workers were contributing to a defined benefit
pension in 2009, down from 30pc in 1999.

At the same time, the proportion of workers who belong to less generous
defined contribution schemes increased from 15pc to 23pc during the 10-year
period. The figures contrast with those for people working in the public
sector, where 80pc of staff were active members of defined benefit pensions
during 2009.

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UK economy emerged from recession quicker than thought

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Published: 9:46AM GMT 26 Feb 2010

Britain’s gross domestic product grew 0.3pc in the final three months of the
year, the Office for National Statistics said today in its second estimate
of how the economy performed. That’s up from its first estimate of 0.1pc and
stronger than the 0.2pc revision that City economists had predicted.

The better performance was thanks to stronger showing by most parts of the
economy. The services sector, the biggest part of the economy, grew 0.5pc
instead of the 0.1pc initially estimated; manufacturing was also revised
upward, with industrial production growing 0.4pc instead of 0.1pc; and
Government spending increased 1.2pc.

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Sales slump awakens spectre of recession

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The coldest winter since 1979 combined with the end of discounted VAT to send
high street sales plummeting in January, according to new figures.

The data from the Office for National Statistics has stoked fears that the
economy could be heading towards a double-dip recession.

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Double-dip recession fears intensify on dire retail figures

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Fears of a double-dip recession intensified this morning as the sharpest
monthly fall in retail sales in one and a half years was revealed.

The downbeat spending figures come the morning after a shock rise in public
sector borrowing emerged, casting doubt over the recovery. The £4.3 billion
deficit for last month is the first time on record that the Treasury has not
recorded a January surplus.

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Public borrowing hit £4.3bn last month… the first January deficit since records began

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By
Daily Mail Reporter
Last updated at 2:10 PM on 18th February 2010
The dire state of Britain’s public finances was highlighted again this morning when it was revealed the Government had to borrow money in January for the first time since records began.Labour’s hopes of a ‘feel-good factor’ leading up to the general election took a serious knock by the news that public borrowing for the month was £4.3billion.Analysts had predicted that the Treasury would actually repay around £1billion.The Government usually enjoys a surplus at the beginning of the year because of increased amounts of income and corporation tax. Last January, when Britain was in the teeth of the worst recession since the 1930s, some £5.3billion was repaid.
Rising debt: The Treasury was forced to borrow £4.3billion in January
For the 10 months of the financial year so far, public sector net borrowing has reached a huge £122.4 billion.The UK’s net debt is now £848.5billion, equal to 59.9 per cent of the
country’s annual output - the highest proportion for a January since
the 1974 financial year.Today’s figures from the Office for National Statistics are yet more evidence of the fragile state of the economy, and the huge toll it is taking on the Treasury.

They come after some of the worst jobless figures since Labour came to power were unveiled yesterday, with the Government admitting unemployment is set to get worse.The growing picture of economic woe piles pressure onto Alistair Darling ahead of his Budget next month, when he will have to set out plans for clawing back the deficit.And it is a new blow to Gordon Brown, who has pinned his election hopes on economic recovery.
Under pressure: Gordon Brown during a visit to a wind turbine factory in Newcastle this morning
There was some rare good economic news as separate figures revealed car production enjoyed its biggest rise since May 1976 last month.Total production was up a massive 64.8 per cent on January 2009, while commercial vehicle production was up 9.6 per cent. But the borrowing figures make difficult reading, laying bare how far tax revenues have slumped and spending has snowballed as unemployment pushes up benefits costs.Spending was £4.4billion higher than January 2009 and tax receipts were down £4.2billion, according to the Office for National Statistics.Government receipts were £50.5billion and income tax was 19 per cent lower than last year at £19.4billion.

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Unemployment figures mask UK labour market’s grim reality

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By Amanda Monaghan, Economics Reporter


Published: 6:45AM GMT 18 Feb 2010

There are still 2.46m people unemployed, and a further 2.8m who are not
working as much as they would like to. On top of that, the number of people
claiming jobless benefits has actually started to rise again, and thousands
have simply given up looking for a job and are turning to education to fill
the void.

Unemployment fell by 3,000 in the third quarter, to 2.46m, the
Office for National Statistics (ONS) told us yesterday , leaving the
unemployment rate unchanged at 7.8pc. The news was broadly welcomed and
underlined the expectation that unemployment is unlikely to peak at above
3m, which was the widely-held view in the early stages of the downturn.

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Number of people on the dole hits 13-year high

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The number of people claiming unemployment benefit unexpectedly rose in
January, it was disclosed this morning, raising fears that the UK’s economic
recovery may be weaker-than-expected.

The claimant count rose by 23,500 during the month, the Office for National
Statistics (ONS) said, far below analysts’ expectations of a 10,000 fall.

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