EEF Economics Blog | All posts tagged 'public sector finances'

Week in Review - 24th February, 2012

Felicity Burch February 24, 2012 13:27

↑ Public sector finances	The monthly current budget showed a surplus of £11.8bn in January 2012 as tax receipts were bolstered by self-assessment tax returns. Net debt was £988.7bn, equivalent to 63% of GDP compared with 58.3% a year ago.

↑ MPC minutes	The bank rate was held at 0.5% and the asset purchase programme was extended by £50bn to £325bn. All nine members of the monetary policy committee voted to extend the asset purchase programme. Two members voted for a £75bn increase.

↔ GDP (2^nd estimate)	ONS confirmed its estimate that GDP contracted by 0.2% in the final quarter of 2011. Business investment acted as a drag on growth, but net trade provided a positive contribution due to increased exports to non-EU countries.

↓ Business Investment	Business investment contracted by 5.6% in the final quarter of 2011. Manufacturing investment also fell, by 2.4%.

The week ahead

Thu 1^st: Manufacturing PMI

Tags: public sector finances, mpc minutes, gdp, business investment, economic data, week in review

Week in Review - 21st October, 2011

Felicity Burch October 21, 2011 10:22


↑ Consumer prices	CPI inflation was up again in September, to 5.2%, and has now been above target for 22 months. September’s high level of inflation was, as expected, driven up by recent increases in household electricity and gas prices which rose by 7.5% and 13.0% respectively. Upward pressure also came from clothing and footwear. The only downward pressure on the monthly change came from falling air transport costs as the summer peak season ended.

↑ MPC minutes	The minutes from the Monetary Policy Committee’s September meeting showed the nine members of the committee voted unanimously to maintain the bank rate at 0.5% and extend stock of asset purchases by £75bn to a total of £275bn.

↓ EEF Pay Settlements	Pay settlements have been broadly stable since the beginning of the year. The three-month average pay settlement was 2.5% in September, a little down from a revised figure of 2.6% in August, and a little below the long-term average.

↑ Retail sales	In the year to September 2011, the volume of retail sales increased by 0.6%, particularly driven by increases in non-store (predominantly internet) sales.

↓Trends in lending	The stock of lending to UK businesses contracted by £2.5bn in the three months to August.

↑ Public sector finances	Excluding the temporary effects of financial interventions, public sector net borrowing was £14.1bn in September 2011, £1.3bn lower than in September 2010. Public sector net debt rose from £833bn to £966.8bn over the same period, and is now equivalent to nearly 63% of GDP.

The week ahead

No UK data releases

Tags: week in review, consumer prices, mpc minutes, pay settlements, trends in lending, public sector finances

Week in Review - 23rd September, 2011

Felicity Burch September 23, 2011 10:27


↑ Public sector finances	Public sector net borrowing (excluding financial interventions) was £51.5bn in the financial year to August, down from £55.3bn in the same period last year. However, public sector net debt in August was equivalent to 61.4% of GDP compared with 55.3% of GDP in August 2010.

↔ MPC minutes	The MPC once again voted unanimously to keep rates on hold with one member also voting for additional QE.

The week ahead

Wed 28^th: Credit conditions

Thu 29^th: Lending to individuals

Tags: public sector finances, mpc, week in review

Week in Review - August 19th, 2011

Felicity Burch August 19, 2011 10:18


↑ Consumer prices	CPI inflation edged back up in July, to 4.4%, remaining well above the Bank of England’s 2% target. This prompted the Governor’s seventh consecutive letter to the Chancellor of the Exchequer. The main upward pressure inflation was from financial services such as fees for arranging mortgages. Other upward pressure came from clothing and footwear; furniture, household equipment and maintenance; housing and household services. There was some downwards pressure, however, from food and drink prices.

↓ Labour market statistics	The number of people in employment rose by 25,000 in the three months to June, but the ILO measure of unemployment rose by 38,000, meaning the unemployment rate went up to 7.9%. This was partially offset by a fall of 23,000 in the number of economically inactive people (those neither in work nor looking for work). The Claimant Count measure of unemployment – which records the number of people claiming Job Seekers’ Allowance – rose again to 1.56 million in July, up 37,100 since June. This pushed the claimant count rate up to 4.9%.

↓ MPC minutes	Although the MPC once again voted to maintain interest rates and quantitative easing at current levels, the two members of the committee who had previously voted to increase the base rate joined the majority in voting to keep it at 0.5%.

↔ Retail sales	Between July 2010 and July 2011 the volume of retail sales was unchanged though, by value, retails sales rose 4.3% over the same period.

↑ Public sector finances	Public sector net borrowing (excluding financial interventions) was £40.1bn in the year to date for 2011/12, down from £43.1bn in the same period last year. However, public sector net debt in July was equivalent to 62.4% of GDP compared with 55.4% of GDP in July 2010.

The week ahead

Fri 26^th: Q2 GDP (second estimate); Index of Services; Q2 Business investment

Tags: cpi, labour market, mpc, retail sales, public sector finances, week in review

Week in Review - 22nd July, 2011

Felicity Burch July 22, 2011 09:45


↔ MPC minutes	The MPC once again kept rates on hold with the voting pattern on the MPC unchanged from last month. Spencer Dale and Martin Weale called for a 25 basis point rate rise; and Adam Posen called for an increase in the asset purchase programme of £50bn.

↓ Public Sector Finances	Public sector net borrowing (excluding financial interventions) was £14.0bn June, compared with £13.6bn in June last year. This was some way above the consensus expectation of £12.5bn. Public sector net debt (excluding financial interventions) was £944.3bn (equivalent to 61.9% of GDP) at the end of June 2011 compared with £803.7bn (55.3% GDP) at the end of June 2010.

↑ Retail Sales	Between May and June the volume of retail sales rose by 0.7% while the value rose by 0.3%. Growth in the volume of sales was driven by discounting on the part of retailers.

The week ahead

Tue 26^th: GDP Q2; Index of Services

Fri 29^th: Lending to individuals;

Tags: mpc minutes, public sector finances, retail sales

Week in Review - 24th June, 2011

Felicity Burch June 24, 2011 09:40


↓ Public Sector Finances	Public sector net debt (excluding financial interventions) was £920.9bn (equivalent to 60.6% of GDP) at the end of May 2011. This compares with £778.9bn (53.8% of GDP) at the end of May 2010.

↔ MPC minutes	The newest member of the Bank of England’s Monetary Policy Committee, Ben Broadbent, voted with the majority of the committee to maintain the base rate at 0.5%. He replaced Andrew Sentance who had been calling for a 0.5 percentage point rise in the base rate.

The week ahead

Tue 28^th: GDP final cut; Business Investment; Balance of Payments

Wed 29^th: Index of Services; Productivity; Lending to Individuals

Thu 30^th: Retail sales; Credit Conditions

Tags: public sector finances, mpc minutes

Week in Review - 27th May, 2011

Felicity Burch May 27, 2011 11:30

↓ Public Sector Finances	Public sector finances worsened in April, with borrowing significantly higher than had been expected as a result of stronger government spending, and slightly weaker tax receipts. The deficit was the largest April deficit on record.

↔ GDP	The figure for GDP growth in the first quarter of 2011 was unrevised, at 0.5%. Although household spending and business investment fell, net trade improved considerably.

↓ Business investment	Business investment fell 7.1% in the first quarter of 2011. Manufacturing investment also fell, by 1.2%. However, investment by manufacturers was 14.8% higher than at the same point in 2010.

↑ GfK NOP Consumer Confidence	The GfK NOP consumer confidence index jumped steeply in May, rising ten points to -21. This was the second-largest one-month rise in the survey’s history. There are several temporary factors such as the Royal wedding and bank holidays which could have contributed to this, so it remains to be seen whether this will be sustained.

The week ahead

Wed 1^st: Manufacturing PMI, lending to individuals

Tags: week in review, public sector finances, gdp, business investment, consumer confidence

Week in Review - 25th March, 2011

Felicity Burch March 25, 2011 09:30

↑ CPI	CPI annual inflation moved up again, by 0.4 percentage points, to 4.4% in February. RPI inflation was 5.5%, up from 5.1% in January. The most significant upward contributions to the change in both the CPI and RPI between January and February were from: housing and household services, as a result of higher gas bills; clothing and footwear; and miscellaneous goods and services, most notably financial services.

↓ Public Sector Finances	Public sector net debt (excluding financial interventions) was £875.8bn (equivalent to 58.0% of GDP) at the end of February 2011 compared with £729.9bn (50.8 per cent of GDP) as at the end of February 2010.

↔ EEF Pay Settlements	In the three months to February, pay freezes accounted for 13.5% of settlements, this represents a fifth consecutive monthly fall. Pay freezes as a proportion of settlements are now at their lowest level since September 2008, and well below their peak of 79.3% in September 2009. Deferrals as a percentage of settlements were largely unchanged at 7.1%.

↓ Retail Sales	Between January and February, total retails sales volumes decreased by 0.8%. Sales fell in food and non-food stores. However compared with February 2010 the volume of retail sales in February 2011 was 1.3% higher.

The week ahead

Tue 29^th: GDP, 2010q4, final revision; Balance of Payments; Business Investment; Lending to individuals
Wed 30^th: Index of Services
Thu 31^st: GfK/NOP Consumer Confidence

Tags: inflation, public sector finances, pay settlements, retail sales

Week in Review - 28th January, 2011

Felicity Burch January 28, 2011 10:19

↓ GDP (2010q4, preliminary)	UK GDP contracted by 0.5% in the final quarter of 2010, according to provisional statistics. This was considerably worse than consensus forecasts, which predicted 0.5% growth. Most of the contraction was caused by weaknesses in the service and construction sectors, with manufacturing growing by 1.4%.

↔ Index of services	Output from the service sector was unchanged between October and November. However, year on year, output for November 2010 rose 1.5% compared with November 2009, with all components experiencing some growth.

↓ Public Sector Finances	Public sector net debt (excluding financial interventions) was £889.1 billion (equivalent to 59.3% of GDP) at the end of December 2010. This compares with £743.5 billion (52.2% GDP) at the end of December 2009.

↔ MPC minutes	The MPC minutes noted that “for most members, recent developments implied that the risks to inflation in the medium term had probably shifted upwards." Despite voting to maintain policy, the balance of votes moved towards an increase in interest rates, with Martin Weale joining Andrew Sentance in favour of an increase in the Bank Rate. Adam Posen once again voted to increase QE.

↓ GfK/NOP Consumer Confidence	GfK NOP’s Consumer Confidence Index dropped eight points to -29 in January, the lowest level in 22 months. January saw decreases across all five sub-indices; with the "major purchase” index, dropping 21 points.

The week ahead

Tue 1^st: Manufacturing PMI; Lending to Individuals

Wed 2^nd: REC report on jobs

Tags: gdp, growth, public sector finances, mpc, consumer confidence

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