Manufacturing hope
Triple dip averted?
The UK's manufacturing sector staged something of a recovery in February, news which has calmed some fears that the opening quarter of this year could see the economy suffer a 'triple dip' recession. Overall industrial production grew by 1 per cent between January and February, driven by a 0.8 per cent rise in manufacturing output. This led economists to forecast overall GDP growth in the opening quarter at marginal levels of 0.1-0.2 per cent, which would mean the economy avoided a second consecutive quarter of negative growth and a third technical recession in the space of five years.
Retail revival
Shoppers return
As well as more positive signs from the industrial sector, the UK's retailers appear to be enjoying the early green shoots of a consumer spending recovery. Despite the cold weather, figures from the British Retail Consortium suggest that March saw a continuation of the recent high street recovery. The BRC reported that the total value of sales in March rose by 3.7 per cent compared with the previous March as sales of homewares and food more than made up for continued disappointing sales of clothing. Notably, online sales growth continued to show signs of slowing from its previous turbo-charged rates.
Korean concern
Kim threat rises
The Korean peninsula edged a little closer to potential conflict this week. Although the powers that be in South Korea are maintaining a calm 'seen it all before' attitude, the sabre rattling from North of the demilitarised demarcation line has become increasingly noisy in recent days and South Korea has upped its military alert level in response. The North's Kim Jong Un has ratcheted up the rhetoric, warning foreigners in South Korea of the prospect of "thermo-nuclear war" on the peninsula while mobilising forces, moving missile batteries and closing down the Kaesong industrial park, which was jointly operated by the two sides. Observers suggest a new nuclear test could be imminent with some sort of military activity expected to mark the anniversary of the North's founder's birthday, Kim Il-Sung, on 15 April.
QE, or not QE?
Competing calls
A top fund manager at US investment giant BlackRock has called for the Federal Reserve to rein in its quantitative easing programme, describing it as a "large and dull hammer" that has distorted markets. Fixed income manager Rick Reider fears it could stoke inflation and cause problems for the bond markets. Meanwhile, across the Pacific Ocean, Japan has accelerated its monetary easing programme as it attempts to kick-start its economy. And in the UK, many economists are expecting further monetary easing policies once the incoming governor of the Bank of England, Mark Carney, has his feet under his desk.
No, Sir
Crosby hands back title
The former head of HBOS, Sir James Crosby, has offered to hand back his knighthood after a damning report into the bank's collapse during the credit crunch which led to it being subsumed, with the help of £20bn of government support, by Lloyds Banking Group. Mr Crosby has offered to revoke his knighthood, rather than face the fate of Fred Goodwin, who saw his title removed in the wake of damning reports into the collapse of RBS under his watch. Mr Crosby has also offered to hand back one third of his £580,000 a year pension.
EU crisis
Pain in Spain
The economic malaise that has infected vast swathes of the EU economy shows little sign of abating, with Spanish industrial output contracting by 6.5 per cent in February against last year, the 18th monthly contraction in a row, and Italian output down by 3.8 per cent. Meanwhile, the European Commission says that 10 EU countries continue to suffer from "imbalances" in their economies. The latest banking sector to come under increased scrutiny is that of the small Balkan state of Slovenia, where the government has been at pains to deny it requires a bailout.
