User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday April 5, 2010 - 11:15:05 GMT
Lloyds TSB Financial Markets -

Share This Story:
| | Email

Economics Weekly - UK to see positive economic growth in Q1 2010; Weekly economic data preview - Central banks, except perhaps the RBA, are set to leave rates on hold

Economics Weekly - 5 April 2010


UK to see positive economic growth in Q1 2010


UK economic growth revised up in Q4

In this weekly, we focus on the recent trends in UK GDP and the prospects for growth in Q1 2010.


Paradoxically, the upward revision to UK GDP growth in Q4 of 2009, to 0.4% from 0.3%, also saw a downward revision to growth in earlier years. Hence, the peak to trough fall in UK gdp during the recession just ended is 6.3%, down from 6.2% in the previous release of the data. For 2009 as a whole, there was a fall of 4.9% in GDP, the biggest fall in any single year since the figures have been recorded on this basis.


Moreover, the UK’s recovery from recession has been slower and the downturn deeper than that of the average of the G7 economies. UK economic growth fell for six consecutive quarters, from Q2 2008 to Q3 2009, whilst the average fall in the other G7 countries was four consecutive quarters.


...but earlier figures were revised lower, meaning the recession was even deeper than first thought...

We have identified the high degree of leverage in the UK as one of the reasons why the UK’s recovery has taken longer than in some other economies. Another reason, is the high share of the economy accounted for by services, which fell sharply in the recession. Given that the downturn was exacerbated by a global financial crisis, one of the features of the recession of 2008/2009 is that services output has contracted more than any other sector. In all the recessions since the 1960s, falls in services output have been modest to nonexistent. But in this downturn, services output has fallen by around 3.5%, see chart b. This makes this recession unique in recent UK economic history, and explains why the decline in the level of GDP has been so pronounced.


...but growth in Q1 was likely in line with Q4 2009

Looking to prospects for GDP in Q1 and the remainder of the year, monthly economic data so far released suggest that the recovery will be uneven. However, expansion at a similar pace to Q4 2009 is likely in Q1 (0.3-0.5%), but Q2 and Q3 could be more of a struggle, partly due to Budget and election uncertainty. In any event, the March Budget does not so far seem to have altered expectations about the path of the economy. Whether a later Budget has any impact remains to be seen. We look for UK economic growth of around 1% this year, with recovery to just above 2% growth in 2011.


Although growth needs to come from net exports, some revival of consumer spending is still crucial


There has been a very sharp rise in household saving rates in the UK, hitting a peak of 8.4% in Q3 2009, see chart d. This means that for economic growth to resume at a decent pace, that ratio must stabilise at around 7-8%. With business investment spending likely to remain weak as companies adjust their balance sheets, the onus will be on stocks and net exports to drive the modest economic recovery we expect in 2010. However, as chart c shows, given the 70% share of GDP taken by consumer spending, about half of the expansion in GDP this year will still come from that source.


The challenge for the UK is that a weak currency, which it currently has, is not enough to drive economic recovery: a focus on key fast growing export markets is also required. Nevertheless, with a large negative output gap, price inflation will fall back later in 2010. Hence, we look for official interest rates to remain low through 2010 and a Bank Rate of 0.5% will likely carry over to 2011. However, we would expect longer-term money market rates to remain much more volatile.

Trevor Williams, Chief Economist, Corporate Markets


Weekly economic data preview 5 April 2010


Central banks, except perhaps the RBA, are set to leave rates on hold


􀂄 Several major central banks take monetary policy decisions this week, but the most contentious could be the Reserve Bank of Australia, where interest rates may remain on hold at 4%, but with a significant risk of a quarter-point hike. The RBA lately has increased the emphasis on a measured pace of tightening, having already raised rates from a low of 3% in the past six months. In contrast, the Bank of England, Bank of Japan and European Central Bank are all expected to leave interest rates firmly unchanged. Moreover, the BoE is not expected to change its asset purchase target at £200bn. ECB President Jean-Claude Trichet may confirm the decision to continue to accept BBB- debt as collateral next year, as part of measures to support Greece. No doubt he will try to convince the markets that policy frictions in the euro zone have been resolved, but investors may beg to differ, with Greece set refinance about €20bn of debt in this quarter alone.


􀂄 In terms of European data, UK services PMI and industrial production will probably attract the most attention. German factory orders and final estimates of euro zone services PMI and Q4 GDP are worth more than cursory glance. Indeed, German orders are forecast to accelerate to around 21.4% on the year, the highest annual rate of growth since reunification, though of course the numbers are flattered by favourable base effects resulting from the collapse in world trade activity a year ago. We were a little surprised by the rise in the UK manufacturing PMI last week, but for the services PMI we still think a fallback from a very strong reading in February is likely and have pencilled in a forecast of 57.5 from 58.4, though this would still be significantly above the 50 no-change level. The ONS release of February industrial production, which we see rising 0.5% in the month, will help provide a firmer view on the official GDP growth estimate for Q1 (not due until Apr 23), though the National Institute for Economic and Social Research (NIESR) will make an unofficial stab at the number next week. Our own view is for a 0.3% quarterly rise in GDP.


􀂄 Eyes will be drawn to the US pending home sales figures on Monday to gauge conditions in the fragile housing market, after the surprise month decline of 7.6% in February, blamed largely on poor weather conditions. President Obama’s extension of first-time buyer credit last November for property sales that close by June 30th should help to buoy the market over the next couple of months and we expect the pace of decline in pending home sales to slow, falling by 0.4% in March. Housing will be a recurring theme during the week as we expect Tuesday’s release of FOMC minutes to expand on the decision to halt the buying of mortgage-backed securities at the end of March, completing the $1.25 trillion programme instituted in November 2008. Markets will look for reassurance that the Fed will reverse that decision if necessary. Further comments in the minutes or public statements from Mr Bernanke on Wednesday are expected to confirm rates will remain on hold, until more consistent evidence of a sustained economic recovery materialises. Thursday’s initial jobless claims are forecast to continue their downward trend to 435,000, with the 4-week average falling to the lowest level since September 2008. The US Treasury will be undertaking a number of auctions throughout the week including $74bn of 3-year notes, 10-year notes and 30-year bonds, and $8bn of 10-year TIPS.

Hann-Ju Ho, Carl Paraskevas


Economic Research,
Lloyds TSB Corporate
10 Gresham Street,
London EC2V 7AE
0207 626 - 1500


Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105