Eurohope
Rock-bottom reached?
Amid the wreckage of the eurozone economy there are tentative signs of recovery, according to some analysts. Although business activity in the troubled economic bloc remains in negative territory, the rate of contraction in November abated, with business activity in the services and manufacturing sectors coming in ahead of expectations. With the growth engine of Germany showing signs of improvement, hopes are rising that the recession in Europe may end some time in the first half of next year. Furthermore, the troubled periphery is showing signs of life with Greece's recent debt deal, Spain's banking bailout and Italian economic improvement all helping sentiment.
See Italy's prospects looking up
Tesco trouble
US pull out
Retail giant Tesco has run up the white flag in its battle to establish itself in the US grocery market. Chief executive Philip Clarke has launched a strategic review of the Fresh & Easy retail chain, which operates in California and Nevada, with a view to either selling it or bringing in a partner. A lack of sufficiently rapid growth has left Tesco facing the reality that it will take too long to achieve suitable scale in the US, and prompted the departure of 30-year Tesco veteran Tim Mason. Meanwhile, sales elsewhere in the business have proved lacklustre.
Triple dip?
Services slow
The prospect of the UK's rebound from recession in the third quarter of the year petering out rapidly was raised this week with anaemic growth figures from the important services sector. The services sector Purchasing Managers' Index for November slowed down to 50.2, only marginally above the level that indicates contraction in the sector and its lowest reading for 23 months. With services accounting for the lion's share of the economy, there are genuine fears the UK economy could dip into recession for a third time next year.
Cliff hope
GOP offer
With the fiscal cliff looming ever larger in the US, the Republicans on Capitol Hill this week made an attempt to break the deadlock with a proposal of a $2.2trn deficit reduction plan which included $800bn in new tax revenues, around half the level proposed by President Obama a week earlier. Other savings included $600bn from healthcare budgets and $600bn from other federal spending packages. Mr Obama rejected the proposal and criticised it for lacking any new taxes on the biggest earners in the US.
Aussie slow down
Third quarter weakens
The booming Australian economy is showing increasing signs of slowing down with quarterly growth in the third quarter of the year coming in at 0.5 per cent, down from 0.6 per cent in the second quarter and 1.3 per cent in the first quarter. Growth was running at 3.1 per cent a year ago. The economy has been hit by a double whammy of slowing demand from Asia for its commodity output and cuts to government spending in a bid to meet budgetary targets. The Reserve Bank of Australia reduced interest rates to 3 per cent this week in an attempt to boost the non-mining sectors of the economy.
Son of PFI launched
£5bn extra spend
The Autumn Statement brought with it the official launch of the replacement for the discredited Private Finance Initiative. The 'son of PFI' appears much like PFI itself only with the government taking a bigger equity stake in projects in an attempt to share in some of the profits the private sector has been enjoying for many years. The chancellor also announced an extra £5bn infrastructure spending boost including funds for 100 new free schools and academies and a kick-start to road-building projects.
