Onwards and upwards
UK revised
The UK economy grew faster than originally estimated in the first quarter of this year. The Office for National Statistics revised first-quarter growth up from 0.3 per cent to 0.4 per cent this week, mainly due to upwards revisions in the construction sector while the dominant service sector remained unchanged. This means growth over the 12 months to the end of the first quarter was 2.9 per cent. Further positive news for the UK economy came in the form of June's consumer confidence figures from GfK which saw the biggest monthly leap in a year to a 15-year high.
Boom time
M&A high
Low borrowing costs and the constant search for growth in a low-growth world has pushed global takeover activity to previously unseen levels in the opening half of this year. The US has led the way, with mergers and acquisitions activity surging 60 per cent to $987.7bn-worth of deals while global activity has grown by 38 per cent to just short of $2.2 trillion. Technology has, as is often the case, led the way with the biggest deals but the rise has also drawn in sectors such as oil and gas where lowly oil prices have left some companies ripe for hostile takeover as predators look to shore up their positions.
Top gear
UK auto boom
The UK's automotive industry is enjoying a renaissance. Far from the dark days of British Leyland's demise, the UK has become a centre for specialist vehicles and manufacturing on behalf of overseas players. And in this sense, it is booming. Turnover from the industry grew to an all-time high of £69.5bn in 2014 with 1.6m cars built on our shores. The industry has reported impressive productivity gains and is also expanding its workforce, taking on another 27,000 employees in manufacturing and retail last year, pushing the total to 800,000. March 2015 saw the highest number of new cars registered in a month since 1998.
Supermarket stall
Morrison surprises
With price wars continuing to rage across the supermarket sector food price inflation remains a dim and distant memory. The latest supermarkets data from industry watcher Kantar suggested that food prices fell by 1.7 per cent in the three months to 21 June compared with a year ago while the volume of items sold barely shifted, pushing the overall market into decline for the first time for more than six months. German discounters Aldi and Lidl continue to take bites out of the market share of bigger rivals but the biggest surprise came in the form of a second month of modest sales growth at Morrison, the only one of the 'big four' to record positive sales growth in the past month.
Air waves
Heathrow preferred
The long running Davies Commission into the UK's airport capacity has finally come down in favour of building a third runway at Heathrow although it did not completely dismiss Gatwick's potential for expansion saying its plans had merit. The scene is set now for a political row which threatens to split the upper echelons of the Conservative party but the potential for relieving the capacity constraints remains distant - no new runway is expected to be delivered for around a decade.
F1 battle
Sky eyes deal
The battle to buy up the 35.5 per cent stake held by private equity specialists CVC in the Formula 1 car racing franchise is hotting up. Rumours have been building for some weeks that Miami Dolphins American Football team owner Stephen Ross and backers from Qatar were looking to seal a £4.5bn deal but broadcaster Sky is now thought to be lining up an alternative bid in conjunction with media mogul John Malone's Liberty Global. Sky currently owns the rights to broadcast Formula 1 until 2018 and is believed to be keen to protect its position through a deal. The CVC shares are crucial in that they carry voting rights which mean their owner effectively runs F1.
Chart of the week
Traditionally, the UK has had strong links with the EU, which last year absorbed 44.6 per cent of UK exports of goods and services, and accounted for 53.2 per cent of UK imports. However, as the graph shows, this relationship is steadily changing. For while exports from the UK to the EU have grown on average by 3.6 per cent in each year between 1999 and 2014, exports to non-EU countries over the same period have risen each year by 6.5 per cent. This means that the proportion of UK exports (by volume, not value) to the EU has fallen from 54.8 per cent in 1999 to last year’s 44.6 per cent, while imports from non-EU countries since 1999 have virtually doubled.
The EU’s share of global GDP has fallen from 30 per cent in 1993 to 24 per cent in 2013. This is because growth in non-EU economies, driven mainly by the Bric economies, has outpaced growth in the EU.
