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

To: regli who wrote (34080)	7/23/2005 12:11:41 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The British economy suffered its weakest annual growth in more than 12 years in the second quarter of the year as the hard-pressed manufacturing sector sank once more into a recession. Analysts said the figures confirmed the general sluggishness across most sectors of the economy and made it highly likely that the Bank of England would make the first interest rate reduction for two years when it meets in early August. --------- The Office for National Statistics said the British economy - the world's fourth largest - expanded by 0.4% in the second quarter of the year, the same pace as the first quarter but slower than the City had been expecting. The figure was enough to drag down the annual pace of growth to just 1.7%, the slowest since Britain was emerging from a painful recession early in 1993. Manufacturing output, which accounts for about a fifth of the economy, shrank 0.7% in the April to June period, following a contraction of 0.9% in the first quarter, meaning the sector meets one definition of a recession - namely two successive quarters of contraction. In fact, manufacturing has now fallen back in three of the past four quarters, which analysts say is particularly disappointing given that the world economy expanded at its briskest pace in three decades last year, which should have boosted manufacturing exports. The continued strength of the pound and competition from Chinese manufacturers, however, meant British firms were unable to thrive. guardian.co.uk

To: regli who wrote (34080)	7/23/2005 12:24:35 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

From HarryHope on the FOOL on UK US similarities Both countries have large trade deficits. Both have rapidly shrinking manufacturing. Both have had housing bubbles. The UK's appears to be on the way down and with it a significant drop in consumer spending. I haven't read anything that does not agree with a loss in consumer spending in the US when housing goes down. Yes I know some do not believe there's a bubble in the US. But housing has always been cyclical and it's been in a sustained boom in the US for a long time. It will turn down and the UK experience indicates so will consumer spending. Many people that a housing bubble will burst in the US. Up to now in the UK it seems like a long drawn out process although it may accelerate. The 2 countries are in a similar situation. It seems profitable to follow the UK as harbinger for the US and the many other countries experiencing long term housing booms. However, because the US has been such a global driving force, we may see a domino effect from a US housing/consumer drop.