User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Monday September 13, 2010 - 09:39:14 GMT
Lloyds TSB Financial Markets -

Share This Story:
| | Email

Economics Weekly - UK faces autumn chill; Weekly economic data preview - Data to show the UK remains top of the inflation league

Economics Weekly  13 September 2010


UK faces autumn chill


The approach of autumn has brought with it a slight chill in the air. Having posted a strong performance in the second quarter, recent coincident and leading indicators suggest that the UK economy could be headed for a pronounced slowdown in the second half. In this week’s commentary, we review some of the recent indicators and assess their implications for the UK economy over the coming months.


Most notably, the monthly purchasing managers’ indices published by Markit for the services, manufacturing and construction sectors all posted a distinct softening in August (see chart a). Although the PMIs for all three sectors are still above the 50 level consistent with expansion, their declines suggest their rates of output growth have moderated sharply. Notably, the services’ PMI, which covers around 50% of economic activity, is now very close to breaking below the key 50 barrier. Moreover, the employment components of all three have dropped sharply in recent months, with the construction employment index, in particular, now pointing to renewed job shedding in that sector


The Markit composite PMI - an average of the manufacturing and services’ business activity PMIs weighted by their respective GDP shares - points to a marked slowdown in GDP growth in the third quarter. Based on these surveys alone, GDP growth in Q3 looks set to slow from 1.2% in Q2 to below 0.5% in Q3 (see chart b). It should be noted that the composite PMI is far from a perfect leading indicator of the official GDP release. This is partly because it excludes retail activity. As chart b shows, the composite PMI understated the downturn in 2008 and early 2009. Nevertheless, the slowdown is also predicted by other surveys that suggest conditions may be starting to soften, including our own in-house sentiment surveys.


Since peaking in late spring, our own monthly business barometer shows that companies’ perceptions of the UK’s economic prospects have fallen back. Although the general economic conditions balance picked up slightly in August, the net balance of businesses expecting economic conditions to improve, at 24%, is currently 31 percentage points below the peak reached in February and below the series average. As chart c shows, there is a close relationship between this balance and the monthly GDP estimate published by the NIESR with a three month lag.


Similarly, our recent Consumer Barometer surveys point to a renewed deterioration in the UK labour market over the coming months. Having dropped off in late 2009 and early 2010, the net balance of respondents reporting an increase in job insecurity has risen noticeably in recent months. As chart d shows, this job insecurity measure correlates well with the change in ILO unemployment, again with a three month lag. The deterioration in the job security balance may be particularly telling. It has coincided with widespread coverage of the significant planned job losses in the public sector over the coming years. There is a risk that the rise in job insecurity represents an overreaction to job losses that, in practice, are likely to be spread over a number of years. In which case, unemployment is unlikely to rise as sharply as the relationship in chart d implies. Nevertheless, while the magnitude may be overstated, sentiment has clearly worsened, and the knockon effect to consumer confidence and consumer spending could be significant.


Together, the above surveys suggest that, while the expansion is expected to continue, the pace of improvement is likely to slow markedly. We expect UK GDP growth to slow to between 0.25%-0.5% in the third and fourth quarters. If realized this would leave GDP growth for the calendar year as a whole at 1.5%, although there is a risk that it could come in weaker if the deterioration in sentiment continues over the coming months.


The recent slowdown in economic activity is also evident in the housing market. While the Halifax survey showed that house prices rose by 0.3% in August, this represents a far slower monthly pace of growth than earlier in the year (see chart e). Other house price measures, for example those published by the Nationwide and Rightmove, show that house prices have started to fall again. So what should we make of the weakening in these indicators? Overall, the key message is that the UK is still some way from a ‘double-dip’ recession. Nevertheless, they underline the uncertainties the economy continues to face. Not least, significant uncertainty surrounds the ability of the UK to sustain growth. To date, the recovery has been largely underpinned by public spending and, more recently, restocking. Given the impending fiscal squeeze and the inevitable waning of the stock cycle, it remains to be seen whether the private sector will be sufficiently strong to take up the slack.


On balance, we expect that the recovery will continue. There is already significant pent-up demand in the business sector, corporate profits are improving, and we remain hopeful of a rebalancing in growth towards investment and net exports, aided by the fall in sterling and the extreme policy accommodation to date. Nevertheless, the knock-on impact of the fiscal squeeze on the private sector remains highly uncertain. It could be that tight credit conditions and the desire of both companies and households to repair their balance sheets coincides with a continued deterioration in the UK’s net trade position. If this occurs, a double dip and a sharp fall in inflation cannot be ruled out.


Of course, the Bank of England will be watching these developments closely. If the forthcoming economic data cast doubt on the sustainability of the recovery, further monetary policy stimulus may yet be forthcoming.


Adam Chester

Head of UK Macroeconomics



Weekly economic data preview 13 September 2010


Data to show the UK remains top of the inflation league...


􀂄 The UK data calendar is particularly busy with inflation, retail sales and labour market figures set to keep markets on their toes. Over the past year, inflation has remained stubbornly high in the UK, particularly when compared with other G7 economies. However, the CPI rate has fallen back in recent months from a peak of 3.7% in April to 3.1% in July and we look for a further decline, to 3.0%, in August. Within the detail, we expect to see lower petrol prices being partially offset by a jump in food price inflation, with the latter potentially an important trend over the coming months if agricultural commodity prices continue to rise. Both retail sales and overall consumer spending rose sharply in Q2, increasing by 1.7% and 0.7% respectively, but this strength seems unsustainable given that household income growth remains weak and consumer confidence appears to be slipping again. While retail surveys have been very strong in August, we look for only a modest 0.2% monthly rise in volumes. Finally, according to the most recent official data, the UK labour market appears close to turning the corner, with employment rising sharply in the past three months. But with the bulk of jobs growth generated via an increase in part-time workers and with wage growth still very weak, we think the headline numbers are overstating how strong the rebound in the labour market actually is. We look for the latest monthly data to confirm our suspicions.


􀂄 There is a raft of price data published in the US this week, the tone of which is likely to underpin the view that inflation pressures remain subdued. Although crude oil prices came off sharply during August, this may have come too late to be reflected in the official import prices index, which we expect to show a 0.5% m/m rise, reflecting higher crude oil prices and a weaker dollar earlier in the month. However, due to base effects, the annual rate should show a sharp fall. The same scenario is predicted for August producer prices, where a predicted 0.3% monthly gain will be dwarfed by the 1.5% jump in the index last year. Consumer prices data on Friday are expected to show the headline annual rate eased to an 11-month low of 1% in August, despite two consecutive months of 0.3% increases in the index. The ‘core’ rate is predicted to be steady at 0.9% for the fifth straight month – the lowest since 1966. Other data highlights this week include retail sales, where we expect a relatively modest pick-up in August, signalling subdued consumer spending growth in Q3. By contrast, buoyant business investment is forecast to underpin a further 0.4% rise in industrial production during August. We also look for modest improvements in the September Empire and Philly Fed manufacturing surveys.


􀂄 Broadly speaking, economic indicators from the eurozone have been encouraging in recent months. Business surveys, for example, have been supported in no small part by healthy demand for exports – notably from emerging Asia. While we look for this theme to continue going forward, there is no room for complacency. German factory orders disappointed with a 2.2% m/m decline in July, as did industrial production, which expanded by just 0.1% m/m. The latter will be reflected in this week’s industrial output data for the aggregate eurozone region, where our forecast stands at +0.2% m/m (French production data surprised modestly to the upside, at +0.9%). Other forthcoming data include final euro area CPI for August – where we expect an unrevised outturn of +1.6% – and on Tuesday, the latest German ZEW survey. Here, we envisage an outturn of 9.0 versus 14.0 previously, reflecting ongoing stock market volatility.


Economic Research team



Lloyds TSB Corporate Markets Economic Research, 10 Gresham Street, London, EC2V 7AE, Switchboard: 0207 626 1500. Bloomberg: LLOY<GO>



This document, its contents and any related communication (altogether, the "Communication") does not constitute or form part of any offer to sell or an invitation to subscribe for, hold or purchase any securities or any other investment. This Communication shall not form the basis of or be relied on in connection with any contract or commitment whatsoever. This Communication is not intended to form, and should not form, the basis of any investment decision.

This Communication is not and should not be treated as investment research, a research recommendation, an opinion or advice. Recipients should conduct their own independent enquiries and obtain their own professional legal, regulatory, tax or accounting advice as appropriate. Any transaction which a recipient of this Communication may subsequently enter into may only be on the basis of such enquiries and advice, and that recipient's own knowledge and experience. This Communication has been prepared by, and is subject to the copyright of, Lloyds TSB Bank plc ("Lloyds TSB"). This Communication may not, in whole or in part, be reproduced, transmitted, stored in a retrieval system or translated in any other language in any form, by any means without the prior written consent of Lloyds. This Communication is provided for information purposes only, and is confidential and may not be referred to, disclosed, reproduced or redistributed, in whole or in part, to any other person. This Communication is based on current public information.

Whilst Lloyds TSB has exercised reasonable care in preparing this Communication, no representation or warranty, express or implied, is made as to the accuracy, reliability or completeness of the facts and date contained herein by Lloyds TSB, its group companies and its or their directors, officers, employees, associates and agents (altogether, "Lloyds TSB Persons"). The information contained in this Communication has not been independently verified by Lloyds TSB. The information and any opinions in this Communication are subject to change at any time and Lloyds is under no obligation to inform any person of any such change. This Communication may refer to future events which may or may not be within the control of Lloyds TSB Persons, and no representation or warranty, express or implied, is made as to whether or not such an event will occur. To the fullest extent permitted by applicable law, regulation and rule of regulatory body, Lloyds TSB Persons accept no responsibility for and shall have no liability for any loss in relation to this Communication, however arising (including in relation to any projections, analyses, assumptions and/ or opinions contained herein nor for any loss of profit or damages or any liability to a third party).  

Lloyds TSB Corporate Markets is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc. Lloyds TSB Bank plc's registered office is at 25 Gresham Street, London EC2V 7HN and it is registered in England and Wales under no. 2065. Lloyds TSB Scotland plc's registered office is at Henry Duncan House, 120 George Street, Edinburgh EH2 4LH. Lloyds TSB Bank plc and Lloyds TSB Scotland plc are authorised and regulated by the Financial Services Authority.





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