The Office for National Statistics (ONS) claims that the British contribution to the EU increased from £5.3BN in 2009, to £9.2BN in 2010.
Every British taxpayer now pays the EU £300 per head per annum.
The EU budget will rise by 2.9% this year, despite the fact that member states are having to make massive cut backs in their own budgets.
This dichotomy cannot contiue for much longer without there being a Europewide backlash against the EU.
Thursday, March 31, 2011
Wednesday, March 30, 2011
Real Incomes Fall
The Office for National Statistics (ONS) reports that "real" incomes fell by 0.8% in 2010, from £14,181 per person to £13,980.
This is the first drop since 1981.
The fall, according to "experts", is due to salaries being eroded by inflation (something that the man in the street could have told the "experts" months ago).
The fall will add to the sense of gloom amongst consumers, and will inevitably hamper any possible growth in the economy.
However, as with all statistics provided by the ONS, these figures should be taken with a pinch of salt. Statistics from the ONS are always late, and invariably have to be adjusted some months after publication.
This is the first drop since 1981.
The fall, according to "experts", is due to salaries being eroded by inflation (something that the man in the street could have told the "experts" months ago).
The fall will add to the sense of gloom amongst consumers, and will inevitably hamper any possible growth in the economy.
However, as with all statistics provided by the ONS, these figures should be taken with a pinch of salt. Statistics from the ONS are always late, and invariably have to be adjusted some months after publication.
Tuesday, March 29, 2011
The Eurozone Crisis - Spain Is Next
All eyes have been focused on Portugal, Ireland and Greece as the Eurozone slowly unravels. However, spare a thought for the next in line for financial chaos namely Spain.
Banco Base (Spain's 3rd largest savings bank) has asked for Euro 1.45BN in state funds to meet "new local capital requirements".
The Euro, as it currently stands, is destined to fail. At best there may be a two speed Euro (split along a North South axis). At worst, the Euro will cease to exist.
Banco Base (Spain's 3rd largest savings bank) has asked for Euro 1.45BN in state funds to meet "new local capital requirements".
The Euro, as it currently stands, is destined to fail. At best there may be a two speed Euro (split along a North South axis). At worst, the Euro will cease to exist.
Monday, March 28, 2011
EU Pressures Portugal
The EU is putting pressure on Portugal to come cap in hand to the EU for a bailout.
Ewald Nowotny, a governing council member of the European Central Bank, is quoted in the Telegraph:
"From a purely economic point of view one could probably recommend it. The domestic political situation in Portugal has clearly worsened ... the head of the government has stepped down."
Why such advice?
Philanthropy?
No, this is purely self interest based on fear of the Eurozone unravelling as a result of economic chaos in Portugal. Were Portugal to accept a bailout, the people of Portugal would end up having to sacrifice their economic well being for the future of the Euro.
Is this something that they really want?
It is not just Portugal that threatens the Euro, Ireland will need further refinancing and Spain is looking decidedly unstable as well.
Ewald Nowotny, a governing council member of the European Central Bank, is quoted in the Telegraph:
"From a purely economic point of view one could probably recommend it. The domestic political situation in Portugal has clearly worsened ... the head of the government has stepped down."
Why such advice?
Philanthropy?
No, this is purely self interest based on fear of the Eurozone unravelling as a result of economic chaos in Portugal. Were Portugal to accept a bailout, the people of Portugal would end up having to sacrifice their economic well being for the future of the Euro.
Is this something that they really want?
It is not just Portugal that threatens the Euro, Ireland will need further refinancing and Spain is looking decidedly unstable as well.
Friday, March 25, 2011
Crisis? What Crisis?
Unsurprisingly, given the resignation of the Prime Minister (Jose Socrates) and the ongoing budget turmoil, Portugal has had its credit rating downgraded by Standard & Poor's to BBB and by Fitch to A-.
Despite the turmoil and the downgrade, the EU have delayed making a decision as to providing a "comprehensive package" to tackle the eurozone debt crisis.
Instead the EU has adopted the ostrich policy of sticking its head in the sand. Jean-Claude Trichet, President of the European Central Bank, said that Portugal must implement the fiscal austerity measures that Mr Socrates had proposed.
All very well, but it is precisely those austerity measures that were rejected along with Mr Socrates!
As ever, the EU displays a remarkable talent for being out of touch with reality.
Despite the turmoil and the downgrade, the EU have delayed making a decision as to providing a "comprehensive package" to tackle the eurozone debt crisis.
Instead the EU has adopted the ostrich policy of sticking its head in the sand. Jean-Claude Trichet, President of the European Central Bank, said that Portugal must implement the fiscal austerity measures that Mr Socrates had proposed.
All very well, but it is precisely those austerity measures that were rejected along with Mr Socrates!
As ever, the EU displays a remarkable talent for being out of touch with reality.
Thursday, March 24, 2011
The Wisdom of Socrates
Jose Socrates the Prime Minister of Portugal has "fallen on his sword", as a result of his austerity budget being voted down by all the opposition parties.
Socrates had stated, prior to the vote, that if the budget was defeated he would resign.
The result of this defeat is that the country probably has to stage a general election and, because it has no budget, will have to be propped up by the EU in order to prevent the financial collapse of Portugal and the unravelling of the Euro.
Socrates is a canny man, and has probably saved his country from an austerity package that would have cause chaos domestically.
Socrates had stated, prior to the vote, that if the budget was defeated he would resign.
The result of this defeat is that the country probably has to stage a general election and, because it has no budget, will have to be propped up by the EU in order to prevent the financial collapse of Portugal and the unravelling of the Euro.
Socrates is a canny man, and has probably saved his country from an austerity package that would have cause chaos domestically.
Wednesday, March 23, 2011
The Budget
Today is Budget Day.
Unlike most budgets, the details of this one have been pretty well leaked or can be reasonably guessed.
The BBC has a list of guesses/leaks here Budget 2011: What we already know.
As to whether this budget really does stimulate growth, depends very much on people's "optimism/pessimism" about the future.
Given that many expect interest rates to go up, George Osborne may well have a difficult task kick starting growth no matter how much he tinkers with personal allowances.
Unlike most budgets, the details of this one have been pretty well leaked or can be reasonably guessed.
The BBC has a list of guesses/leaks here Budget 2011: What we already know.
As to whether this budget really does stimulate growth, depends very much on people's "optimism/pessimism" about the future.
Given that many expect interest rates to go up, George Osborne may well have a difficult task kick starting growth no matter how much he tinkers with personal allowances.
Tuesday, March 22, 2011
Inflation Own Goal
On the eve of the Budget, allegedly one designed for "growth", George Osborne has been hit by the unwelcome news that CPI inflation has risen to 4.4% in February and RPI has risen to 5.5%.
This of course, as I have noted before on this site, is not unexpected given that VAT was raised to 20% in January.
As such this inflation is an own goal scored by Osborne.
This of course, as I have noted before on this site, is not unexpected given that VAT was raised to 20% in January.
As such this inflation is an own goal scored by Osborne.
Monday, March 21, 2011
The Budget and The £8BN "Windfall"
The ITEM club has estimated that public sector net borrowing will be around £140.2BN for 2010-11, £8.3BN less than the £148.5BN deficit forecast by the Office for Budget Responsibility (OBR).
Some sections of the media have foolishly referred to this as a "windfall", which the Chancellor can use to oil tomorrow's budget with.
This is of course nonsense, the Chancellor does not suddenly have access to an extra £8BN with which to "play":
1 This is merely a downward estimation of the level of increased debt that we are being saddled with each year.
2 The UK's total debt stands at £4.8 Trillion.
3 Our insane venture into Libya will put further holes in our country's finances.
Some sections of the media have foolishly referred to this as a "windfall", which the Chancellor can use to oil tomorrow's budget with.
This is of course nonsense, the Chancellor does not suddenly have access to an extra £8BN with which to "play":
1 This is merely a downward estimation of the level of increased debt that we are being saddled with each year.
2 The UK's total debt stands at £4.8 Trillion.
3 Our insane venture into Libya will put further holes in our country's finances.
Friday, March 18, 2011
The "People's" Bank
Congratulations to the Royal Bank of Scotland (RBS), the 83% taxpayer owned bank, for once again proving that they are the "people's" bank.
Not only do they reward their CEO, Stephen Hester, with a "low" (his words, not mine) package of £7.7M but they also rewarded their top five non-board executives with £21M in total last year.
However, that is not an end to their largess, they also paid £375M to 323 key staff.
Proving that, so long as you are considered by RBS to be "key", that RBS is indeed the "people's" bank!
Not only do they reward their CEO, Stephen Hester, with a "low" (his words, not mine) package of £7.7M but they also rewarded their top five non-board executives with £21M in total last year.
However, that is not an end to their largess, they also paid £375M to 323 key staff.
Proving that, so long as you are considered by RBS to be "key", that RBS is indeed the "people's" bank!
Thursday, March 17, 2011
Hester Puts The Boot In
Stephen Hester, CEO of RBS, whilst defending his "low" (his words not mine) £7.7M pay package to the Public Accounts Committee took the opportunity to divert attention and put the boot into the Bank of England.
Hester criticised the Bank of England's assessment of the value of taxpayer support for the UK's banks in 2009 (£100BN).
The Telegraph quotes his response to a question about the accuracy of the figure:
"No, I do not accept the Bank of England [figure]...
...The figures from research that we have seen, which I think will be published in the coming weeks, comes up with a dramatically smaller figure...".
£7.7M may well be "low" in the world of international banking. However, most people are not top flight international bankers and will not agree with his assessment.
Hester criticised the Bank of England's assessment of the value of taxpayer support for the UK's banks in 2009 (£100BN).
The Telegraph quotes his response to a question about the accuracy of the figure:
"No, I do not accept the Bank of England [figure]...
...The figures from research that we have seen, which I think will be published in the coming weeks, comes up with a dramatically smaller figure...".
£7.7M may well be "low" in the world of international banking. However, most people are not top flight international bankers and will not agree with his assessment.
Wednesday, March 16, 2011
Don't Panic! III - The Japanese Ministry of Reconstruction
As I have noted, the ongoing media hype over the possible damage done to the Japanese and world economy is overdone and simply wrong.
Once the situation on the ground has stabilised the Japanese will pump billions into rebuilding the infrastructure, which in itself will give the moribund construction industry a much needed boost.
Chief Cabinet secretary Yukio Edano has already announced that Japan will establish a Ministry of Reconstruction.
It is estimated that Japan will take around five years to reconstruct the shattered infrastructure, a level of reconstruction not seen since the end of World war II.
Preliminary estimates, which will be revised, put the cost of reconstruction at around $180BN.
Whilst the shorters currently have the "upper hand", the medium and long term prospects for the markets are favourable. Do not panic, and do not get suckered in by the media hyperbole of crashing markets and nuclear "meltdowns".
Once the situation on the ground has stabilised the Japanese will pump billions into rebuilding the infrastructure, which in itself will give the moribund construction industry a much needed boost.
Chief Cabinet secretary Yukio Edano has already announced that Japan will establish a Ministry of Reconstruction.
It is estimated that Japan will take around five years to reconstruct the shattered infrastructure, a level of reconstruction not seen since the end of World war II.
Preliminary estimates, which will be revised, put the cost of reconstruction at around $180BN.
Whilst the shorters currently have the "upper hand", the medium and long term prospects for the markets are favourable. Do not panic, and do not get suckered in by the media hyperbole of crashing markets and nuclear "meltdowns".
Tuesday, March 15, 2011
Don't Panic! II
Yesterday I noted the following wrt the crisis in Japan:
"Whilst in the short term there will be a negative impact on the economy.. the medium term prospects are far rosier."
Unsurprisingly, as the situation on the ground in Japan continues to develop (especially wrt the nuclear reactor), there has been a downturn in the markets. The Nikkei shed 1000 points, and the FTSE is currently down by approximately 3%.
As long as the current situation remains volatile and unclear there will be some significant fluctuations in the markets as investors take fright, and shorters make a killing.
However, once the situation has stabilised I stand by the point that I made yesterday that the "..medium term prospects are far rosier..":
"The stimulation package announced by the central bank, and general economic boost provided by capital refurbishment projects will in fact do the Japanese economy (and world economy) a power of good."
Do not panic, and do not get suckered in by the media hyperbole of crashing markets and nuclear "meltdowns".
"Whilst in the short term there will be a negative impact on the economy.. the medium term prospects are far rosier."
Unsurprisingly, as the situation on the ground in Japan continues to develop (especially wrt the nuclear reactor), there has been a downturn in the markets. The Nikkei shed 1000 points, and the FTSE is currently down by approximately 3%.
As long as the current situation remains volatile and unclear there will be some significant fluctuations in the markets as investors take fright, and shorters make a killing.
However, once the situation has stabilised I stand by the point that I made yesterday that the "..medium term prospects are far rosier..":
"The stimulation package announced by the central bank, and general economic boost provided by capital refurbishment projects will in fact do the Japanese economy (and world economy) a power of good."
Do not panic, and do not get suckered in by the media hyperbole of crashing markets and nuclear "meltdowns".
Monday, March 14, 2011
Don't Panic!
Aside from focusing on the loss of human life and humanitarian issues relating to the ongoing crisis in Japan, many media organisations are also hyping the potential economic downside of this disaster.
Whilst in the short term there will be a negative impact on the economy, the medium term prospects are far rosier. The stimulation package announced by the central bank, and general economic boost provided by capital refurbishment projects will in fact do the Japanese economy (and world economy) a power of good.
Whilst in the short term there will be a negative impact on the economy, the medium term prospects are far rosier. The stimulation package announced by the central bank, and general economic boost provided by capital refurbishment projects will in fact do the Japanese economy (and world economy) a power of good.
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