Friday, August 9, 2013

Rebalancing the economy

UK trade gap shrinks as exports rise

Britain exported a record £78.4 billion worth of goods between April and June thanks to surging demand from countries outside Europe. The all-time high for the second quarter came after a record-breaking performance in June (source: ONS). The financial crisis of 2008 and the moribund Eurozone forced us to focus on exports to non-European countries. As a consequence of these efforts, manufacturing is beginning to revive and is finally shouldering some of the burden previously borne by the service sector

Posted by flashman @ 03:33 PM (1966 views)
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7 thoughts on “Rebalancing the economy

  • How will a recovery effect UK house prices?

    I’ve been thinking about this for months and my take is as follows:

    10-year rates (the ones that mostly effect mortgages) will begin to rise steadily. At the same time there will be large increases in the cost of heating, due to higher demand for oil and gas. Many of the older generation will struggle with the cost of heating their drafty/large houses and many people in their 40s and 50s will struggle when they are hit by the double whammy of higher mortgage and heating costs. A doubling or trebling of household costs is not out of the question.

    There will be trend towards downsizing, building eco homes and refurbishment of older inefficient properties. Many large inefficient homes will be split up into smaller refurbished properties thus creating new homes. The value of zero emission/very efficient homes will remain high. The value of other homes will fall

    Any boom sees a new generation of wealthy people. These people will move into some of the larger houses vacated by downsizers and people fleeing from larger household bills. Domestic insulation renewable energy companies will do well

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  • 10year rates have risen from 1.776% in February to where we are now at 2.582%

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  • ” The value of zero emission/very efficient homes will remain high. The value of other homes will fall”

    I already see that here in Ireland. Around here it is almost impossible to sell a house built before 1970 even in good condition, a high premium is paid for and property with a rating A to C.

    Personally I believe that all those damp old Victorian houses need pulling as they were not built with efficiency or modern standards in mind. The last house we had in the UK was not even designed with electricity, plumbing or a toilet – all was (badly) retrofitted.

    Building new towns, with new facilities and infrastructure away from the sight of NIMBY’s would solve lots of issues.

    BTW, flashy – wake me up when interest rates or wage growth return above the level of inflation and I will give you your economic recovery.

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  • “Building new towns, with new facilities and infrastructure away from the sight of NIMBY’s would solve lots of issues”.

    I don’t think we need worry too much about NIMBYS. They’ve had their day. The central government is handing out permission on appeal at a rate of knots. This is the new game … the local councils ask you to withdraw your application because they’re going to refuse it. You tell them to get stuffed and they either cave in or you wait for the eight weeks to expire and the central government grants it (if it’s even remotely reasonable and sometimes if it isn’t). This is also working for infrastructure projects like waste plants. For years the NIMBYs have been successful in preventing these projects. Suddenly they are going through on appeal.

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  • @flashman – sounds promising, I could never see why people wanted to freeze the country in the last 1980’s.

    I have seen a few places where there has been some major type of Barrats developments mainly in Cornwall, once place in particular Roche has grown significantly.

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  • Kirk: Correct. Are you quoting the US 10 Year Note Generic Bid Yield? The UK Generic Bid yield is only marginally behind at about 2.46. They are most certainly rising.

    Regarding wages… They might be sticky for some time. Increasing mechanisation and competition from overseas workers is proving to be quite a headwind for some wages. Wages for in demand skills are already rising. I think the government needs to get involved in more skills programs

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  • @6 copying the IDA would be a good start, they are always creating jobs here.

    http://www.idaireland.com/

    Worth 5 mins. just to see where all the IT jobs here come from.

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