The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

U.K. Economy Barely Grew In Quarter Through May, Niesr Estimates

Posted by WARREN MOSLER on June 13th, 2012

Another hint the austerity induced deficit may have gotten large enough to stabilize things and promote a bit of growth.

U.K. Economy Barely Grew In Quarter Through May, Niesr Estimates

By Svenja O’Donnell

June 12 (Bloomberg) — The U.K. economy barely grew in the quarter through May after contracting in the previous three months, according to the National Institute of Economic and Social Research.

Gross domestic product grew 0.1 percent in the period, after declining at the same rate in the three months through April, Niesr, whose clients include the Bank of England and the U.K. Treasury, said in an e-mailed statement in London today.

Data today showed U.K. manufacturing fell more than economists forecast in April, while industrial production was unchanged, pointing to continued weakness in the economy at the start of the second quarter. Britain has slipped back into recession and Bank of England policy makers have warned of threats to the economy from the euro-area crisis.

“Economic activity remains very weak,” the institute said. “We expect the U.K. economy to remain broadly ‘flat’ over the next six months.”

The U.K. economy is forecast to recover in 2013, Niesr said, though “significant downside risks persist.”

8 Responses to “U.K. Economy Barely Grew In Quarter Through May, Niesr Estimates”

  1. DOB Says:

    If the data had been worse, would you not have said: “another sign that austerity is not working and monetary policy is shooting blanks” ? :)

    Reply

    WARREN MOSLER Reply:

    It’s still all a sign that monetary policy is shooting blanks.

    What’s happening is the deficit, while created ‘the ugly way’- via counter cyclical automatic stabilizers- is none the less doing its thing to reverse the decline.

    The real risk last summer was the debt ceiling limit would have removed the automatic stabilizers- in the down turn govt spending would not have been ‘allowed’ to go up,
    and falling revenues would have forced more spending cuts.

    Reply

  2. Neil Wilson Says:

    @Alexander,

    “or perhaps money coming into the UK from the ongoing bank runs in Greece, Spain, and Italy.”

    For it to do that, there would have to be somebody prepared to go in the opposite direction. Currencies are exchanged, not converted.

    Reply

    MamMoTh Reply:

    @Neil Wilson,

    Is it impossible to open a Euro account in a UK bank?

    Reply

    Jose Reply:

    @MamMoTh,
    As far as I’ve been told by eurozone citizens who experienced the situation it’s virtually impossible for a national of another EU country to open bank accounts in Holland, Sweden etc . – unless he or she is a resident.

    Of course, this is totally contrary to the rules of the single market, yet it’s what happens in reality.

    And as might be expected there is total freedom for EU citizens to open (large) euro accounts in Switzerland. Swiss banks welcome them. It’s an old tradition, after all.

    The conclusion? Free movement of capital inside EU borders is valid for corporations but, alas, not for individuals – EU propaganda to the contrary notwithstanding.

    Reply

    Cesar Reply:

    @Jose,

    Well, whoever told you that is wrong. Flat out wrong.
    I am an Irish citizen and have opened accounts in Germany, France, Malta and the UK. My family and friends, to protect their deposits, have opened accounts in France and did so through an entirely online process (Keytrade Bank, a subdivision of Credit Agricole if you’re interested); they need a scan of a household bill and a scan of your passport and your account is open; then a simple transfer instruction to your Irish bank and the job’s done.
    To be honest, that’s half the problem – if it was genuinely difficult then half the money that has gone would still be around.

    Sergei Reply:

    @Jose,

    Cesar: if it was genuinely difficult then half the money that has gone would still be around

    Well, you do not need to go through such complexities. You can go to your local branch and ask for CHF cash :) Or slightly more difficult way – you ask your bank to open a securities account and buy german bunds and you money is in Germany. Or France. Or US or wherever else you want to have it.

  3. Jose Says:

    @ Cesar

    Thanks for the tip. I’ll pass it on to my sources who btw were adamant – while on business trips to Sweden and then Holland they were not able to open a bank account at a regular branch. “Only for residents in the country”, they were told.

    Reply

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>