Oil slick
US growth
The scale of the unconventional oil revolution in the US was laid bare in a report by the International Energy Agency this week. New oil supply from the US is forecast to account for a third of all new oil supply globally over the next five years, according to IEA estimates. The period is likely to see supply growth outstrip demand for oil, which could dampen oil prices, but this is likely to be counter-balanced by a continued increase in demand from emerging markets countries with non-Organisation for Economic Co-operation and Development countries expected to account for the majority of oil demand for the first time from the end of this year.
House price hope
UK improving
Further evidence arrived this week that the recovery in UK house prices is gaining traction. The Royal Institution of Chartered Surveyors said this week that conditions in the housing market are at their most buoyant since mid-2010, with interest from buyers picking up rapidly in recent weeks and not yet matched by a commensurate increase in the housing stock for sale. Sales figures are expected to pick up in the coming months as government initiatives continue to buoy demand, although overall transaction levels remain way below the peaks set before the credit crunch hit.
Smart tax
France acts
The French government is proposing the imposition of an additional sales tax on tablets, smartphones and any other equipment which connects wirelessly with the internet. For a government desperate to increase its tax take, the phenomenal popularity of smartphones and tablets appears to be too good a chance to pass up and the monies raised will be diverted to support the production of television, films and other cultural content. The move is the latest in a long line of attempts by France to protect its cultural heritage and industry or 'l'exception culturelle.
Oil price fixing
Majors probed
Some of the biggest names in the world of oil are in the frame for alleged oil price-fixing. Offices of oil majors BP, Royal Dutch Shell and Statoil were raided earlier this week by the European Commission as part of a probe into fixing of oil prices. The raids came after allegations that some oil companies had colluded to report distorted oil prices to a price reporting agency whose data is relied upon by a billion dollar market trading in oil and other related markets. The offices of one of the world's largest price reporting agencies, Platts, were also raided this week, with the company saying regulators had undertaken a review in relation to its price assessment process.
Mixed messages
UK data
Unemployment in the UK has begun to tick upwards once more with the number of people in work in the first quarter falling by 43,000, the second consecutive quarter of decline. Unemployment was up 15,000 to 2.52 million. Meanwhile, those in work are also being hit with figures showing that average earnings dropped by 0.4 per cent in the January to March quarter. Meanwhile, Sir Mervyn King's last quarterly forecasts before he leaves his post as governor of the Bank of England sounded a cautiously optimistic note, with growth forecasts for the next three years revised marginally upwards and the inflation outlook also improving.
Deficit shrinkage
US boost
The US economy is going some way to proving that growth is the best way to tackle a budget deficit rather than austerity. As the eurozone members and the UK continue to grapple with yawning budget deficits, the figure for the US budget deficit release this week was $642bn, equivalent to 4 per cent of gross national product. This was down by $203bn on the prediction given three months ago, and well down on the $1.1trn deficit figure in 2012. The reduction has been aided by improving corporate and personal tax contributions as the US economy picks up, and also the improved health of the state-supported mortgage companies Fannie Mae and Freddie Mac, which allowed them to make $95bn in payments to the federal government.
