Morning Economics Roundup – Monday 4th Jan 2010

January 4th, 2010

Data to be released today;

PMI (Purchasing Managers Index)  Construction Index (of the Chartered Institute of Purchasing & Supply and Markit Economics) – subscription data available from here.

Big thems of the day;

Factory activity at 25-month high – “Manufacturing activity expanded at its fastest pace in more than two years in December, buoyed by a sharp jump in new orders, a survey showed on Monday. The CIPS/Markit purchasing managers’ index rose to 54.1 last month, above the consensus forecast of 52.0 and after a surprise fall to 51.8 in November”.  See Reuters.

Tories have £34bn black hold in spending plans, says Alistair Darling – “The Tories were accused today by the chancellor, Alistair Darling, of having a £34bn black hole in their spending plans as the main parties stepped up their pre-election attacks. A 148-page dossier released by Labour ahead of a press conference by David Cameron, the Conservative leader, said the Tories had only explained how they would pay for £11bn of £45bn in spending pledges”. See the Guardian.

David Cameron launches Tory general election manifesto – “David Cameron will today set out the manifesto he hopes will win the general election while dispatching members of the shadow cabinet to seize the initiative with voters in marginal constituencies. He will place the economy at the top of his party’s agenda, in a speech at Westminster”. See The Telegraph.

Comment and blogs of the day;

Roger Bootle. There are tough times ahead but my money’s on a resurgent UK – “In economic terms, 2009 was one of the most calamitous years in the nation’s history. I suppose it is fitting that forecasters should have shared in this misery, professionally as well as personally. n fact, my own forecasts did not do too badly, all things considered. Even so, the overall tone of my end of term report should be “could have done better”.” See Daily Telegraph.

Allister Heath. Why 2010 will be make or break for UK – “T is hard to believe that just three years ago the UK economy was still being lauded as a great success story; our fall from grace has been spectacular. In 2007, London was overtaking New York as the financial capital of the world, with a resurgent Britannia gracing the covers of US news magazines; today, as the new decade begins, we are being bracketed with the likes of Italy and Greece as nations that might soon default on our national debt”. See City AM.

Hamish McRae. Some reasons to be cheerful in the bumpy months ahead of us – “Anew year brings a new opportunity for economists to humiliate themselves by getting the forecasts utterly wrong. No major forecasting body caught correctly the scale of the slump in the UK last year – all were too optimistic – so why should people take seriously any commentaries, including this one, about the likely path of the economy this year?” See The Indepedent.

Ashley Seager. Britain faces a new age of austerity to repay government debts – “The challenge for whichever party wins this year’s election will be to maintain public services on a much tighter budget. “Great Britain should endeavour to accommodate her future views and designs to the real mediocrity of her circumstances.” So wrote the legendary Scottish economist Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations in 1776″. See The Guardian.

Jeremy Warner. Britain yet to face the psychological pain of its new economic status – “Nobody brave enough to have joined the hordes at London’s Brent Cross shopping centre over the past week or two would have believed that we have just been through the deepest economic recession since the 1930s. But it is not just the high street which is skipping along as if once more in the midst of a full scale boom. Restaurants are full, gazumping has returned to the posher end of the London housing market, the stock market has enjoyed a record breaking rally, the art market has revived and fine wines are again achieving top prices at auction”. See Daily Telegraph.