Bidaily Economics Roundup – Friday 30th July

Big themes;

U.S. recovery growth is slowing – Q2 at an annualised 2.4%, below the forecasted rate and much less than the 3.7% for Q1 – debate is very much now whether another stimulus is needed

UK consumer confidence falls to lowest in four years – as measured by the UK’s index of consumer sentiment – take a look at the 5 year chart here to see how far off we are from pre-recession times.

House prices fell 0.5% in July according to Nationwide – the first since February and larger than forecast 0.2%

M4 lending at lowest level since records began in 1964 – some believe this may be counterbalanced by firms increased investment spending over decreased borrowing

Selected comment;

Hamish McRae: The subtle hand we must play on trade “we have to recognise both that it is not just the BRICs that matter and that selling services to a host of different countries is going to be a tricky, subtle task. But that is what makes life interesting for the UK. We have a really interesting hand of cards to play and it is good to see that our new government is trying to play it with sensitivity. See David Cameron’s comments in Turkey in that light”. The Independent.

Jeremy Warner: Whatever happened to the rebalancing act? “After years in which many Western countries had become dependent for growth and prosperity on debt-fuelled consumption and property inflation, there would be a miraculous rebalancing of the world economy into a more sustainable order of things. What is the evidence for this happy transformation in economic dynamics actually taking place? Virtually none, I’m afraid to say”. Daily Telegraph.

Sir Samuel Brittan: Take central banks down a notch “no major central bank had any inkling of the weakness developing in the world financial system. There was the obstinate refusal to take asset bubbles seriously and the wrongheaded preoccupation with short-term targets for narrowly defined inflation indices. In the background was a shift from an excessive preoccupation by central banks with financial institutions to the other extreme of their becoming virtual econometrics factories.Yet despite everything I would still support central bank independence, if for no other reason than that no body has a monopoly of wisdom”. Financial Times.