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’S&P affirms the UK’s AAA
Does this look like grounds for a negative or a stable outlook on that affirmation, do you think? (Via S&P’s statement — released just as Chancellor George Osborne took to the stage at the Conservative party conference):
Independent Commission on Banking — the report
Click image for the full report:
Ring fences ahoy:
Analysis to follow.
Why is Britain still AAA?
Viewers of European CNBC early on Thursday morning will probably have seen Danske Bank making their case for cutting the UK’s credit rating by no fewer than four notches, from AAA to A+.
(Which is about where Italy is at the moment.)
It’s an eye-catching call,
A return to asset purchases (in the UK)
We are a bit late to this, but here are selected highlights from Goldman Sachs prediction on Friday of further asset purchases by the Bank of England.
But this time Goldman economist Kevin Daly reckons there’s a good case for the BoE focusing on credit easing rather than the purchase of more gilts.
From 1896 to 2011, in UK borrowing costs [updated]
The 10-year gilt yield fell under 2.4 per cent early on Thursday:
It was 2.37 per cent at pixel time.
So we’re not just well under the twentieth-century record low (1946, when yields fell to 2.5 per cent).
Bank of England: “substantial downward risks”
Or to put it another way, the Bank’s fan charts are fanning out so much it’s ridiculous.
Here are two, via the Bank of England’s latest Inflation Report:
First on GDP (getting a bit negative there…):
Anarchy in the UK
Relax everyone, the UK’s haven status and AAA rating is safe.
Or so says Nomura in a ‘Riot’ special.
Selected highlights, emphasis ours:
The initial spark was a protest over the fatal shooting of a man by the police.
Großdeutschland, CDS edition
GERMAN 5-YEAR CREDIT DEFAULT SWAPS RISE ABOVE UK CDS FOR FIRST TIME-MARKIT
An up-scaled EFSF being priced in? Or something else. Discuss.
Selling Italy, buying UK [updated]
Compare….
Contrast…
That’s a modern record low for the 10-year gilt yield and a record eurozone high for its Italian peer. Outwardly, it’s an amazing gulf in some respects as both sovereigns are doomed to low growth.
Safe haven alternatives, London property edition
As FT Alphaville and others have duly noted, the search for the ultimate safe haven alternative is on.
RBS now points to one possible alternative, London luxury-home prices.
From their European rates morning research note:
What price UK QE2?
File under faltering economic recovery.
Via Reuters, the UK manufacturing PMI survey for July:
-UK MARKIT/CIPS MANUFACTURING PMI 49.1 IN JULY VS REV 51.4 IN JUNE (REUTERS POLL 51.0), LOWEST SINCE JUNE 2009
- UK MARKIT/CIPS MANUFACTURING PMI NEW ORDERS INDEX 47.6 IN JULY,
Britain isn’t just in very deep trouble. It’s doomed
This… will spark some debate. Anything on the future of the British economy entitled the ‘Armageddon Project’ and applying terms like ‘psychology of denial’ and ‘debt addiction’ will do that.
But since the UK’s growth outlook and status as a safe haven will be closely watched for the rest of 2011…
UK GDP *pass*
The preliminary estimate of second quarter UK GDP is out, and it’s bang in line with expectations.
And the ONS says quarter-on-quarter growth could have been as high as 0.7 per cent without several “special factors”.
Doing a Newfoundland
The Amulree Commission on a peripheral debt crisis, 1933:
No part of the British Empire has ever yet defaulted on its loan obligations; in the absence of any precedent, the consequences which would follow from a default by Newfoundland must remain to some extent a matter for speculation.
Cook’s consol plan for Greece
Long-standing FT Alphaville commenter and UCL senior research fellow, Chris Cook, has had an interesting letter published in the Financial Times on Thursday.
It’s a letter with a plan. A plan for Greece,
The UK bonus doldrums
The UK’s Office of National Statistics published its latest bonus data on Tuesday, and as can be seen below there’s been very little change on the year when it comes to bonus payments in “financial and insurance activities”:
Contagion at the core
It’s safe to say we didn’t take this entirely seriously when it landed in the FT Alphaville inbox a couple of weeks ago.
GBP: The Closure of The News Of The World could be the start of a deeper and more lengthy commentary on Politics and the Press in the UK.
A touch of anglo-periphery contagion
Adding to the sharp moves in Italian and Spanish banking stocks on Monday were also some rather sharpish slides in the UK banking sector — just ahead of the close of trade.
Not forgetting the Great British Krona versus the dollar…
The second biggest equity market in the world
It’s the UK, which has just over taken Japan according to Citigroup.
A stark contrast to the London Stock Exchange which is the world’s 10th biggest exchange company by market value.
UK retail recession watch: Royal Wedding hangover
UK retail sales figures are out and they have managed to undershoot expectations.
The City was braced for a fall for May as consumers put their hands back in their pockets after splashing out in April (because of the good weather,
NS&I certificates must be capped
This unlikely to go down well with nervous British savers but Citigroup thinks the government should cap the rates on the recently relaunched National Savings index-linked certificates.
It’s expensive,
Plan B
The IMF version for the UK, anyway:
Conversely, if the economy experiences a prolonged period of weak growth and high unemployment—and if inflationary pressures consequently ease—fiscal automatic stabilizers should operate freely (as the fiscal mandate is designed to allow) and the current monetary policy rate should be maintained for an extended period.
UK house price gloom
Via Morgan Stanley, which thinks prices will fall 10 per cent on a two-year view and leave Lloyds with a negative equity headache.
More in the usual place. * Forecasts contingent on 150bps rate rise by end 2012.
Gilt flash crash/fat finger
The price action in the UK June gilt on Thursday morning:
(Click to enlarge)
UK GDP: a stats oddity
There is a lot of debate on whether the market is actually getting a decent picture of the UK economy at the moment — typified by the latest GDP release, though there’s also construction output and all sorts of indicators playing up and becoming highly volatile.
You’ve been Dagonged — UK edition
BEIJING, May 24 (Xinhua) — China’s first domestic rating agency, Dagong Global Credit Rating Co. Ltd., on Tuesday downgraded the local and foreign currency long-term sovereign credit rating of the United Kingdom by one level to A+ from previous AA- with “negative”
If it bleeds…
With hedge funds going into the meedja sentiment business this is probably worth exploring:
Finance news articles mentioning ‘crisis’ are at a three-year low, say Société Générale’s cross-asset research team using a famed indicator:
Putting the ‘stag’ in stagflation
Abstracting from the snow
We have an economy
On a plateau
That’s the (Haiku-ised) verdict of Joe Grice, chief economist of the Office of National Statistics, on Wednesday’s UK GDP release.
Down 0.5 per cent one quarter,
Don’t mess with Eurostat
Presenting the new, improved, contingent liabilities-laden Eurostat data release.
But first — an atrocious set of numbers on 2010′s EU government deficits and debt, with one name sticking out above all…