Warning lights
G20 pledge
The global talking shop that is the G20 grouping closed its latest pow-wow in Brisbane Australia at the weekend with a list of 800 planned measures which the participants believe would add 2.1 per cent to global growth in the next five years. But implementing even a majority of such measures is likely to prove challenging once national interests come back into play, witness the attempts at consensus on emissions reductions targets in recent years. Prime minister David Cameron ended the G20 meeting by saying "red warning lights are flashing on the dashboard of the global economy" pointing to eurozone deflation, Japanese recession and slowing emerging markets growth as major concerns.
Cooling off
House price dip
The price of the average house in the UK has taken its first downwards dip for many months amid further evidence that the market is cooling. The latest data from the Office for National Statistics said that the average house price in the UK stood at £273,000 in September, down marginally from the record £274,000 recorded in August. Although average house price inflation in the country remains in double figures, the sense of cooling in the market is widespread with the latest mortgage data showing approvals dipped to a 14-month low in August.
Global warning
Trade tapers
The steady growth in world trade which characterised the 'globalisation' years running up to the financial crisis may never be seen again. Research by the World Bank and International Monetary Fund suggests we may have already seen the peak in global trading as the phenomenon of rapid Chinese growth driven by inward trade looks set to continue to fade. In the past two years the growth in global trade has failed to keep pace with overall global economic growth, suggesting that one of the major drivers of expansion in the global economy is likely to take more of a back seat in future. China’s move to own more of the supply chain is a major factor with exported goods from China now containing, on average, half the imported parts that they contained in the 1990’s.
Abe calls vote
Tax trouble
Calling a general election within 24 hours of news that your troubled economy has just returned to recession for the fourth time in six years might seem to be a somewhat counter-intuitive move. But Japanese prime minister Shinzo Abe used just such a moment this week to opt to seek a renewed mandate for his 'Abenomics' strategy. An increase in sales tax in Japan in April has proved more costly to its economy than many thought and when a technical recession was confirmed this week with a second consecutive quarter of negative GDP growth, Mr Abe picked his moment to call a snap election. His position is clear, he will look to push out the implementation of a second sales tax hike by 18 months to 2017 and push on with his policy of pumping more quantitative easing funds into Japan’s sickly economy.
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Quindell routed
Founder leaves
The Aim-listed insurance technology and services provider Quindell has been through the mill in the past year, culminating in the abrupt departure of founder and executive chairman Rob Terry and two other directors this week after much publicised and somewhat unconventional share dealing in the business. The company, which was valued at £2.7bn earlier this year before regulators blocked its accession to the FTSE 250 index, saw its value slide to a tenth of that level on Tuesday after Mr Terry announced his departure. He and two other directors recently pledged nearly £9m worth of shares to a US financing company as collateral for loans to buy a smaller number of shares despite knowing at the time that one of the company’s two corporate brokers had given notice of its intention to resign.
Zew!
German relief
The weakening German economy has been a major drag on sentiment towards the eurozone in recent weeks, hence the relief when figures this week showed investor expectations in the engineroom of the European economy have rebounded. The ZEW index for investor expectations rose to 11.5 in its November reading, up from -3.6 last month, the first negative showing for two years. Coming on top of further hints from European Central Bank chief Mario Draghi this week that preparations are being made for the buying of government bonds early next year, it helped shore up confidence in the eurozone.
