Egypt crisis
Split threat
The political crisis in Egypt, prompted by the army's removal of the Islamist president Mohammed Morsi last week, has heightened after the deaths of a large number of Islamist protestors at the hand of the army. This has hardened attitudes among supporters of the Muslim Brotherhood, from which President Morsi hailed, and they have rejected the opportunity to partake in a political process aimed at stabilising the most populous Arab country ahead of parliamentary elections early next year and new presidential elections six months later. Meanwhile Saudi Arabia and the United Arab Emirates this week stepped in and made $8bn (£5.37bn) -worth of cash, central bank deposits and oil products available to the Egyptian government.
Houses hot up
Prices rise
The UK’s housing recovery appears to be gathering pace, fuelled by the boost given to first time buyers by the Help to Buy scheme. Introduced in April, Help to Buy has led to housebuilders reporting eye catching increases in sales since it was launched. Meanwhile, a survey by the Royal Institution of Chartered Surveyors published this week suggested that house prices are rising at their fastest pace in three years. April appears to have been a clear turning point when the number of sales agreed jumped by 8.2 per cent, far outweighing the 2.8 per cent increase in the supply of housing on the market.
UK upgrade
IMF forecast
The International Monetary Fund (IMF) has scaled back its expectations for global growth in 2013 at the halfway stage of the year. IMF economists expect global GDP growth of 3.1 per cent over the year, down from 3.3 per cent forecast in April as forecasts for German and US growth were reduced slightly amid concern that emerging market growth is slowing and next year's forecasts were shaved from 4 per cent to 3.8 per cent. But, for the UK, the signs were more optimistic as the IMF actually raised its growth forecast for this year from 0.6 per cent to 0.9 per cent, but left if 2014 forecast unchanged at 1.5 per cent.
M&S suffers
Despite retail revival
High street giant Marks & Spencer suffered another lacklustre period in the three months to June as it suffered its eighth consecutive quarter of shrinking sales from its former powerhouse, general merchandise. Although the fashion press has received the autumn collection well it is still some months away from the stores and there is no guarantee it will pull the company out of its long-term decline in general merchandise sales. Food, international and online sales all performed well but are not big enough to fully compensate for the ongoing struggles, especially in womenswear. Meanwhile, the wider UK retail sector is making hay while the sun shines as consumer spending grows, both online and in the shops. Total sales grew by 2.9 per cent in June.
China crisis
Data dips
The latest economic data from the Chinese economy rattled confidence among investors on Wednesday amid fears that the slow down in its economy could be worse than feared. Both imports and exports fell in June, which suggests a general slow down in economic activity. Exports fell by 3.1 per cent compared with June 2012 and imports dipped by 0.7 per cent. The figures gave some indication of the current state of play in the Chinese economy ahead of second-quarter GDP figures which are scheduled to be published on Monday and could give a stronger indication of whether China will go close to meeting its 7.5 per cent GDP growth target for the year.
Banking boost
UK upgrade
The ratings agency Moody's delivered a shot in the arm to the UK banking sector this week when it upgraded its outlook from negative to stable. Moody's analysts said that remedial action by the banks to shore up their balance sheets meant that the period of most risk has now passed for UK banks and they are now "sufficiently well capitalised" to withstand the most adverse possible scenario. Meanwhile, the EU has potentially set itself on a collision course with the likes of Germany by proposing that future bank rescues in the eurozone are handled by a central 'Single Bank Resolution Fund' rather than by the individual countries involved. The €60bn (£51.61bn) fund would be drawn from levies on European banks and the central eurozone authorities would have the final say on whether a bank is shut down or not.
