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zugzwang

Uk Service Sector Growth Slows

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Still positive but this is the third monthly decline, consistent with a weakening credit impulse from FLS/HtB.

If the trend continues we're going to need more govt spending in 2014 to hold up GDP.

(Reuters) - Growth in Britain's dominant service sector slowed unexpectedly in January but activity remained strong, suggesting the economy is picking up speed in the first quarter of 2014, a survey showed on Wednesday.

The survey by data company Markit also showed a pick-up in price pressures for service firms but not to a level that would suggest a problem for the Bank of England, which has stressed it is in no hurry to raise interest ratesicon1.png.

Markit's services purchasing managers' index (PMI) eased to 58.3 in January - its lowest since June - from 58.8 in December. It was also lower than the 59.0 reading expected in a Reuters survey.

The figure remained well above the 50 mark that separates growth from contraction, and business confidence was at its highest in nearly four years, bolstered by outstanding business which reached its highest since May 1997.

The survey showed the service sector, which makes up more than three-quarters of Britain's GDP, remained an important engine of growth at the start of the year after the economy in 2013 posted its fastest expansion since the financial crisis.

"Even with the easing seen in January, the sector is still expanding at a rate that bodes well for another strong GDP reading in the first quarter," said Chris Williamson, chief economist at Markit.

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Can they hold it together until the election?

Perhaps, expect a deluge of propaganda - help to buy, spring bounce, fudged unemployment figures etc over the next couple of months as they attempt to trick people into borrowing more.

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George came too soon, been saying it for a while.

Greedy George, silly George.

I doubt he had any choice, the whole think was tanking badly so they brought in more props....mini boom, system over-heating...system running out of mugs willing to buy a house, spank their savings, borrow....problem ultimately made worse....reality strikes regardless.

London housing market must be near break point....when it pops we have our nominal HPC.

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I doubt he had any choice, the whole think was tanking badly so they brought in more props....mini boom, system over-heating...system running out of mugs willing to buy a house, spank their savings, borrow....problem ultimately made worse....reality strikes regardless.

London housing market must be near break point....when it pops we have our nominal HPC.

Sums up my thoughts as I was reading this thread

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There are only 2-3 properties in my area of NR2 for sale where there would be 10-15 before and at prices which mean last years 4 bed price would be this years 3 bed price usually sold to London refugees.

Its so slow now I think the agents will be laying off staff in sales again. In essence the measures introduced helped shift the property for sale at the time and now we are left with the shelves bare.

If estate agents where the biggest recruiter I would be very surprised to see this carry on as i just don't see the volumes as it feels there are more estate agents within 500m of my home than houses for sale.

I don't see how unsold/overpriced property helps the economy.

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Starting to revise my opinion on where all this is going. I predicted 3.5% GDP growth for 2014, that is now looking like a big ask with the negative news lately, even if some of that growth is already in the bank because of the acceleration at the end of 2013.

Should be pleased because I need a way back into the equity markets and all this doom and gloom is helping.

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I doubt he had any choice, the whole think was tanking badly so they brought in more props....mini boom, system over-heating...system running out of mugs willing to buy a house, spank their savings, borrow....problem ultimately made worse....reality strikes regardless.

London housing market must be near break point....when it pops we have our nominal HPC.

Yep, will be fun to watch the glum faces on SKY and the other place.

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There are some lending constraints coming in April so there could be a small spike before then (to do with banks looking in more detail if you could afford a rate rise).

Expect Osborne to cut stamp duty below 600K or something to get regions moving in budget which could offset that.

I'm still seeing a lot of properties coming on market at silly prices and still a lot of STC above 700K - which I guess is London downsizers as it's not locals.

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Starting to revise my opinion on where all this is going. I predicted 3.5% GDP growth for 2014, that is now looking like a big ask with the negative news lately, even if some of that growth is already in the bank because of the acceleration at the end of 2013.

Should be pleased because I need a way back into the equity markets and all this doom and gloom is helping.

Have some more help!

SocGen bear growls: deflation shock-wave from Asia to trigger global recession

By Ambrose Evans-Pritchard Economics Last updated: February 6th, 2014

Albert Edwards from Societe Generale has returned from two weeks holiday in a completely foul mood. "The ongoing emerging market debacle will be less contained than sub-prime ultimately proved to be. The simple fact is that US and global profits growth have reached tipping point and the unfolding EM crisis will push global profits and thereafter the global economy into deep recession."

What we are seeing is a "direct replay" of the East Asia crisis of 1997 but on a bigger scale. A strong dollar/weak yen world is an "incendiary mix" for emerging markets. It tightens liquidity while delivering a trade shock to weaker economies.

Analysts are slashing their forecasts at an "all-time record rate – this is wholly inconsistent with talk of economic acceleration".

"The dire profits situation will only get worse as EM implodes and waves of deflation flow from Asia to overwhelm the fragile situation in the US and Europe."

This week's slump in America's ISM manufacturing gauge is the "straw in the wind" of what is to come. "Even if the Fed resumes massive QE at some point as the world melts down, and markets desperately attempt their return to the dream trance, they will instead find themselves locked into a Freddy Krueger-like nightmare in which phase 3 of this secular bear market takes equity valuations down to levels not seen for a generation."

Albert and SG's Andrew Lapthorne say profits have already slumped to near zero growth if you use MSCI reported earning rather than the "made-up" pro-forma IBES data.

Screen-shot-2014-02-06-at-13.48.38.png

EM profits have been negative for two years. The global equity rally has been driven by QE fumes.

Screen-shot-2014-02-06-at-13.46.59.png

http://blogs.telegra...obal-recession/

Edited by zugzwang

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Have some more help!

The only one that really matters is China.

Turkey? Meh......forgotten already.

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The only one that really matters is China.

Turkey? Meh......forgotten already.

A lot of EU banks are up to their overleveraged eyeballs in Emerging markets like Turkey- might this breach the hologram of solvency currently in place, even if China manages to stagger on a while longer?

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A lot of EU banks are up to their overleveraged eyeballs in Emerging markets like Turkey- might this breach the hologram of solvency currently in place, even if China manages to stagger on a while longer?

RK's right. On its own Turkey doesn't matter. Nor Thailand, South Africa, or even somewhere like Hong Kong (250% hpi since 2005). Collectively, however, they're a big chunk of global demand.

UK banks have the biggest exposure to Asia. French and German banks are more tied up with central and eastern Europe iirc.

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