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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (21482)	1/17/2005 9:39:47 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Bank of England to boost intelligence team to spot market threats - report [WTF? Pearly, was someone talking to Bush? Wait as sec, they want whistle blowers. We fire them. Mish] Monday, January 17, 2005 7:03:03 AM afxpress.com LONDON (AFX) - The Bank of England is strengthening its intelligence on financial markets by recruiting more staff to encourage whistle-blowers and pick up City gossip, in order to prevent another Barings-style collapse, the Financial Times reported. The newspaper did not name its source, but said the move is part of a "root and branch" review of the Bank ordered by governor Mervyn King as he looks to stamp his mark on the institution by ridding it of the last vestiges of its gentlemen's club image and turning it into a premier professional monetary authority [Let me get this straight. You get rid of a gentlemen's club image and become a premier professional authority by listening to city gossip? Gee, who woulda thought? Mish] The Bank's markets team has been given a new role in uncovering emerging threats to the financial system, the newspaper added. The Bank is redeploying a unit from the team's trading division to meet financial institutions and to gather information about other institutions and practices that could undermine the financial system as a whole. It is a reflection of concern that nine years after the collapse of Barings Bank caused market turmoil, the Bank's early-warning systems need strengthening King, who replaced Sir Edward, now Lord, George in July 2003, believes that while "we don't want to duplicate what the Financial Services Authority is doing", the Bank has an advantage over the FSA in collecting information on potential systemic threats because it is not the industry regulator. [We do not want to duplicate other efforts, we want to listen to city gossip. Makes sense to me. Mish] Senior Bank employees think it will be in financial institutions' own interests to inform them of markets, trades and other practices in the City with the potential to blow up into serious financial crises, the newspaper said. In the past year, the Bank has identified the rapid growth of hedge funds and similarly complex derivatives as a potential threat to stability. [How much was spent determining that hard to come by conclusion. Was it a result of gossip gathering or brute fore intelligence? Mish]

To: maceng2 who wrote (21482)	1/17/2005 9:57:22 AM
From: mishedlo	Respond to of 116555

OUTLOOK UK Christmas shopping data to take centre stage this week Monday, January 17, 2005 6:45:35 AM afxpress.com LONDON (AFX) - Sterling markets will this week get a better idea about how the household sector performed in the run up to Christmas, when a raft of economic data is released Though the Bank of England's rate-setting Monetary Policy Committee is not expected to change borrowing costs in the next month or two, analysts said the upcoming data flow will impact on expectations for the future direction of interest rates Analysts said most interest will be focused on official retail sales figures for December on Friday and on various other household surveys They expect the office of National Statistics to confirm that the fourth quarter was the softest three month period since the first quarter of 2003, in the run-up to the war in Iraq "Given the poor reports from some retailers and a weak British Retail Consortium survey, there is little reason to expect this pattern to change," said John Butler, UK economist at HSBC, who is pencilling a 0.5 pct monthly decline The consensus of analysts polled by AFX News is for the monthly rate to slip to 0.3 pct from 0.6 pct in November and the annual increase to drop to 5.6 pct from 6.1 pct Other data on Friday, from the likes of the Council of Mortgage Lenders, the Building Societies' Association and the British Bankers Association, are also likely to confirm a slowdown in the rate of consumption, whether it be on the high street or in the housing market Meanwhile, the monthly Royal Institution of Chartered Surveyors survey on Tuesday is expected to show the housing market on the backfoot, though the rise in the equivalent survey from the Halifax, the UK's biggest mortgage lender, served as a reminder that a crash is not currently taking place The MPC has raised the cost of borrowing a quarter point on five occasions since November 2003, taking its key repo rate up to 4.75 pct, as it sought to stem inflationary pressures arising from above-trend growth and rampant consumer demand But evidence of a general economic slowdown, alongside subdued inflation data, has raised expectations that the next interest rate move may actually be down. The money markets have already begun to factor in unchanged rates for the first few months of this year, especially after the minutes of the December MPC meeting showed the nine-member panel discussed the possibility of cutting rates. Though there was unanimity about the January decision, there is a wide range of views of where interest rates will go next year, with some economists predicting reductions as consumption slows down further, while others are forecasting further rate hikes as growth remains firm and earnings pick up Earnings data on Wednesday are likely to show a further modest build-up in pay pressures, but not to the level that is likely to trigger alarm bells on the MPC Analysts expect headline earnings in the three months to November to be 4.2 pct higher, compared with the 4.1 pct recorded in the three months to October, while average earnings, excluding bonuses are expected to be unchanged at 4.4 pct David Page, economist at Investec Securities, noted that the central bank has postulated a number of reasons why earnings growth has remained relatively subdued despite low levels of unemployment "The fact that the Bank is considering these factors suggests it is less concerned about wage inflation and more sanguine over the inflation outlook and this, in part, explains why we now believe rates have probably peaked," he said Inflation data on Tuesday are not expected to generate concerns, with the December consumer price index at an annual 1.5 pct, way below the MPC's 2.0 pct target Analysts said the petrol effect, which lifted prices in the previous two months, is set to reverse following the sharp falls in crude prices "Petrol apart, the December 2004 data are unlikely to be very different from the previous year," said Geoff Dicks, economist at Royal Bank of Scotland

To: maceng2 who wrote (21482)	1/17/2005 9:58:57 AM
From: mishedlo	Respond to of 116555

London retail sales fall over Christmas Monday, January 17, 2005 10:16:21 AM afxpress.com LONDON (AFX) - Retail sales in London fared poorly over Christmas as foreign tourists held back from spending given the dollar's weakness against the pound, the London Retail Consortium said. Compared with a year ago, retail sales fell 2.5 pct on a like-for-like basis which assumes that retail space remained the same. For the UK as a whole, a much more moderate fall of 0.4 pct was registered in the same month. But for the whole of 2004, sales were stronger in London than in the UK, with an average monthly gain of 2.1 pct compared with 1.6 pct for the UK. "These figures represent one of the worst Christmas periods ever experienced by London's retailers. The sense of disappointment over this performance is made worse by level of margin-squeezing, all-out promotional activity that many retailers had to indulge in during December," LRC director, David Southwell said.

To: maceng2 who wrote (21482)	1/17/2005 10:04:00 AM
From: mishedlo	Respond to of 116555

UK economic growth set to slow, ´golden´ period coming to a close - Deloitte Monday, January 17, 2005 9:50:00 AM afxpress.com UK economic growth set to slow, 'golden' period coming to a close - Deloitte LONDON (AFX) - The UK's 10 year span of 'golden' growth -- marked by rapid expansion and falling jobless levels -- is drawing to a close, with the biggest blow set to come from the slowing housing market which will dampen consumer spending significantly, accounting firm Deloitte and Touche predicted It forecasts UK economic growth in 2005 at a disappointing 2.0 pct, a sharp drop from levels above 3.0 pct the previous year and well short of Chancellor Gordon Brown's optimistic 3.0-3.5 pct estimate The economic slowdown in the UK is likely to come amid a deteriorating international environment and adverse currency market movements, it said Additionally, Chancellor Brown is unlikely to be able to resort to government spending to shore up growth as in past years. Conversely, taxes are set to go up by some 10 bln stg annually in the coming years to plug the gap between the government's tax take and spending levels, putting a further constraint on growth, Deloitte added. But against the background of slower growth, the Bank of England will be free to cut borrowing costs to help stabilise the economy. The benchmark repo rate is expected to end 2005 at 4.00 pct from 4.75 pct where it has stayed since August last year. Deloitte did not stop there, it predicts more falls in the key repo rate, taking it 3.5 pct in 2006 and possibly even lower as the authorities try to limit the fallout from slumping house prices The rate cuts are expected to help the economy register an improvement in 2006, with GDP seen growing by 2.2 pct "Although 2005 may not be the year when things go completely wrong, it will probably mark the start of a more difficult period for the UK economy," Deloitte said