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FreeTrader

Poor Trade Figures For A Second Month And Production Falls

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August's trade figures showed little improvement over the poor result in July. July's numbers had taken economists by surprise, but as the trade figures are volatile and subject to later revision the poor result was largely shrugged off as an aberration.

A trade balance of -2.0bn was forecast for August, but the actual figure was -3.3bn.

UKtradeAug13a.gif

UKtradeAug13b.gif

http://www.ons.gov.uk/ons/dcp171778_327089.pdf

Meanwhile industrial production fell 1.1% between July and August against expectations of a rise. Manufacturing production fell 1.2%.

UKprodAug13.gif

http://www.ons.gov.uk/ons/dcp171778_329605.pdf

Edit: added graphic

Edited by FreeTrader

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August's trade figures showed little improvement over the poor result in July. July's numbers had taken economists by surprise, but as the trade figures are volatile and subject to later revision the poor result was largely shrugged off as an aberration.

A trade balance of -2.0bn was forecast for August, but the actual figure was -3.3bn.

UKtradeAug13a.gif

UKtradeAug13b.gif

http://www.ons.gov.uk/ons/dcp171778_327089.pdf

Meanwhile industrial production fell 1.1% between July and August against expectations of a rise. Manufacturing production fell 1.2%.

UKprodAug13.gif

http://www.ons.gov.uk/ons/dcp171778_329605.pdf

Edit: added graphic

The recovery is secured!!!! We can all go out and buy houses!

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The recovery is secured!!!! We can all go out and buy houses!

Indeed so much for rebalancing the economy and so much for austerity. There is no austerity (judging by public sector borrowing) and now the private sector have joined in the fun with a housing spend fest.

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Sterling dropped on the news and the 10-year gilt yield fell roughly 4 basis points.

shouldnt one rise as the other falls?

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shouldnt one rise as the other falls?

No – the poor trade/production numbers reduce expectations of the MPC tightening monetary policy and increase the chances of more QE.

Loose monetary policy / more QE = lower sterling and higher gilt prices (and hence lower gilt yields).

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No – the poor trade/production numbers reduce expectations of the MPC tightening monetary policy and increase the chances of more QE.

Loose monetary policy / more QE = lower sterling and higher gilt prices (and hence lower gilt yields).

Thanks..I see that line of reasoning, but that surely proves one thing...that QE hasnt helped the real world at all...to me, it is a sign that QE doesnt work and shouldnt be tried again...the rates on the Gilts should therefore rise.

But, this is the result of Artificial intervention...the road to serious inflation and carnage.:(

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Thanks..I see that line of reasoning, but that surely proves one thing...that QE hasnt helped the real world at all...to me, it is a sign that QE doesnt work and shouldnt be tried again...the rates on the Gilts should therefore rise.

But, this is the result of Artificial intervention...the road to serious inflation and carnage.:(

You're forgetting the politicians don't look further ahead than (in this case) 2015.

If QE gets them through that, they'll be pushing the BOE to do it, whether it works or not.

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You're forgetting the politicians don't look further ahead than (in this case) 2015.

If QE gets them through that, they'll be pushing the BOE to do it, whether it works or not.

Poetic justice if we get the house price multiple back to 2010 levels and a bit of phoney GDP by 2015.

Try reaping what you sowed you w@@ker Balls. Of course, Labour will have to win first.

Edited by crashmonitor

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