Economic insights

Based on its own forecasts of #unemployment & #inflation, #Fed tightening is still some way off & the first rate rise will be in 2015.

#Fed #GDP growth rate forecast marginally higher than in March and #unemployment rate forecast marginally lower.

#Fed keeps it's foot on the gas pedal. Asset purchases maintained at $85bn per month.

Humdrum set of #MPC minutes. Two most interesting issues: weak wage growth and sensitivity of fin markets to changes in policy expectations.

#MPC voted 6-3 to leave QE unchanged in June. Decision to hold bank rate was unanimous. No surprises.

Air fares, motor fuels & clothing were the largest contributors to the rise in inflation to 2.7%y/y in May.

Squeeze on consumers gets a little tighter. UK CPI inflation rose to 2.7%y/y in May, from 2.4% in April.

Global businesses happier this month, but outlook for trade looks weak. Read more in our World #Economy Barometer tinyurl.com/lwlj4eh

Eurozone industrial production grew by 0.4% m/m in April on the back of a 2.7% m/m increase in the production of capital goods

The European Central Bank kept rates on hold at a record-low of 0.5% at its June meeting after a cut of 25 bps in May.

No final hurrah in Mervyn King's last MPC meeting as the Bank of England leaves the bank rate at 0.5% and QE at £375bn.

Second estimate of GDP confirm the Eurozone economy shrank by 0.2% q/q in Q1 2013 as investment dropped by 1.6% and exports fell by 0.8%

#Eurozone composite #PMIs rose from 46.9 in April to 47.7 in May as rates of decline eased for both manufacturing and services sectors

Letters from America - the latest Chief Economist's Weekly Brief is now available: rbs.com/news/2013/05/l…

#UK #GDP H.hold consumption growth weakest since Q3 2011. Investment (excl. inventories) weakest since Q1 2011. Real GDP -2.6% below Q1 2008

#UK #GDP 2nd est: +0.3%q/q Q1 2013. Largest contribution to growth was inventory accumulation. Only other positive contrib from consumption.

The struggle to maintain living standards. UK retail sales vol. (incl fuel) up just 1% since Q108. Real average weekly earnings down 10.8%!

UK retailers suffer in April as sales volumes decline 1.3%m/m. 4.1%m/m fall in food sales biggest dop since May 2011.

Bank of England's MPC remains split on more QE or not. 6-3 against at May meeting. Will a change of Governor in July change the result?

Also, in this month’s World Economy Barometer we take a closer look at the US manufacturing renaissance. tinyurl.com/m8sngr4

The latest RBS Group Economics World Economy Barometer - our new monthly summary - is available now.tinyurl.com/m8sngr4

#Employment down 43k q/q but number of employees up 21k. Almost all of the fall from fewer part-time self-employed and fewer second jobs.

Eurozone recession extends into 2013 as GDP contracted by 0.2% in the three months to March. The sixth consecutive quarterly contraction.

#UK #Unemployment rt 7.8% Q1 2013. Employ rt down to 71.4%. Av. hrs worked up to 32hrs/wk. 902k people LT unemployed- highest since Q2 1996.

#France in #recession, #GDP down 0.2% q/q in Q1. #Germany at a virtual standstill, up 0.1%.

Better month for UK exporters. Overall trade deficit down to £3.1bn in Mar from £3.4 in Feb. Helped by rise in non-EU goods exports.

No change in UK monetary policy - BoE leaves Bank rate at 0.5% and maintains QE at £375bn.

Encouraging Service Sector #PMI. Strongest increase in new work since last May, helped by rise in overseas demand. Employment up too.

Press saying #ECB rate cut was widely expected. But just 2 months ago, Consensus implied only 12 ex 80 EZ economists expected cut by end Q2.

The European Central Bank cut its main refinancing rate by a quarter of a percentage point to 0.50% as the Eurozone crisis economic deepens

Manufacturing #PMI up to 48.9 in April. Still in contraction territory (<50) but only just. An encouraging start to Q2 for UK #economy

It’s not just #Spain’s football teams that are struggling. #GDP fell for the 6th successive quarter in Q1 & was 6.8% lower than in Q1 2008.

Eurozone unemployment rate went up a notch to a new euro-era high of 12.1% in March, from 12% in Feb

#UKGDP. Services growth fairly strong in Q1, up 0.6%q/q. Both manufacturing and construction output fell.

UK economic output still 2.6% below Q1 2008. #GDP

Compared to Q1 last year, the economy is 0.6% larger. #UKeconomy

#UKeconomy rises 0.3% in Q1. beats expectations of a 0.1% rise. #UKGDP

UK Q1 GDP released at 9.30.Consensus is for a 0.1%q/q rise.The figure is unlikely to change the big picture of bouncing along the bottom.

S. Korea's economy moved through the gears in Q1 - up 0.9%q/q and 1.5%y/y - fastest pace in two years.

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RT @johnvanreenen: Response to #LSEGrowth Commission critics in today's FT - #infrastructure #investment really does matter http://t.co/hV…

Germany moved into reverse in April. Composite #PMI fell to a six-month low of 48.8, indicating contraction, as new orders continue to fall

Eurozone Composite #PMI stable at 46.5 in April as services sector improves slightly and manufacturing slips further

"The 5 year squeeze" - find out more in our Chief Economist's Weekly Brief rbs.com/news/2013/04/t… #economics

RT @BBCBusiness: Fitch downgrades UK credit rating bbc.in/13wJBYc

UK is one of the world's "crisis economies", according to incoming BoE Governor Mark Carney.

Energy put the gas under #Scottish #GDP growth in Q4 accounting for 40% of the rise. Manufacturing down, construction and services up.

#Scottish #GDP was still 2.4% below pre-recession peak in Q4, UK -2.9%.

V encouraging #Scottish economy numbers. Unemp rate down 0.5% pts to 7.3%. UK up 0.2% pts to 7.9%. Sc #GDP up 0.5% q/q in Q4. UK down 0.3%.

BoE MPC members voting against more QE in April concerned with potential impact on inflation, inflation expectations & weaker sterling.

#UK#Unemployment up 0.2 ppts to 7.9%. 70k more people unemployed than prior 3 mnths. Av earnings growth slows to 0.8%y/y vs. 2.8%y/y CPI.

BoE Monetary Policy Committee 6-3 split against further QE remained at April meeting.

RT @WilliamsonChris: Rate cut? EZ inflation now < target for 2nd month & PMI, plotted here v. ECB decisions, well in stimulus ter ...

#CPI Inflation unchanged from last month at 2.8%.

World economy barometer–a look at the UK, US,EZ and Asia based around the latest purchasing managers indices (PMIs). tinyurl.com/c2y2jud.

The latest addition to our suite of products - world economy barometer - is now out. tinyurl.com/c2y2jud.

Broad-based increase in construction output in Feb, which is good news, though activity levels in the sector remain depressed - down 7% y/y

#China’s credit growth.The bad news is that property bubbles and government debt problems are back in the limelight.

#China’s credit growth.The good news is that it’s positive for growth.Inverstment looks set to grow at a healthy pace.

#China's credit growth continues to look very high.The 'financing aggregate' figure for March leaves the 3mma at over 66%y/y.

UK exporters struggling in 2013. Exports to non-EU countries down 4.7% in Feb. Export volumes down 7.5% since start of the year.

UK trade deficit widens in Feb to £3.6bn, from £2.5bn in Jan as exports fall and imports rise.

Struggle to rebalance UK economy continues. Feb manufacturing output down 1.4%y/y in Feb - 14th straight monthly y/y decline!

Read our latest interest and exchange rate forecast here rbs.com/news/2013/04/p… #economics #ECB #BoE #Fed

"Godzilla vs. deflation" - find out more in our Chief Economist's Weekly Brief rbs.com/news/2013/04/g… #economics

No surprises from the Bank of England - rates left at 0.5%, Asset Purchase Programme (QE) unchanged at £375bn

UK March services PMI shows fastest pace of growth in the sector in seven months (52.4) - bodes well for UK avoiding a recession in Q1

Eurozone PMIs make difficult reading - French PMI particularly alarming at 41.9, a four year low. UK services PMI due in 15 mins

UK 10yr Gilt yields down 50bps from 12m highs in Feb as an inconclusive Italian election & Cypriot banking crisis support safe haven demand

The roof keeps rising on US housing. After a 28% y/y rise in starts in Feb, sales were up 10% y/y. Fewer distressed & more 'normal' sales.

Eurozone downturns intensifies as composite PMIs dropped further from 47.9 in Feb to 46.5 in Mar

#Fed more optimistic about #growth and #jobs than in December, thinks inflation will be a touch lower, too. First rate rise a little closer.

#Budget2013 - over five years, the announcements today are almost perfectly fiscally neutral.

#Budget2013 - if taken up in full, Help to Buy of £130bn would be equivalent to more than 10% of outstanding #mortgages of £1,200bn.

#Budget2013 corporation tax to be cut in 2015 to 20%

#Budget2013 - Public sector net debt set to peak at 85.6% in 2016/17. At last year's budget it was going to peak at 76.3% in 2014/15

#Budget2013 - #MPC to be given scope to act like the #Fed, offering forward guidance on interest rates and linking them to unemployment.

#Budget - Public sector net debt forecast to be 84.8% in 2017/8. In December forecast it was estimated to be 77.3%

#Budget - public sector net #debt forecast to start falling in 2017-18.

#Budget – OBR halves 2013 GDP growth forecast to 0.6%.

#budget2013: OBR June 2010 forecast tax receipts of £622bn in 2012 fiscal year. IFS expect just over £590bn.

#budget2013: Of the fall in deficit, 3/4 has come from tax rises and spending cuts, 1/4 from GDP growth.

#budget2013: OBR June 2010 forecast defict of 11% of GDP in 2009 to halve to 5.5% in 2012. We expect underlying actual of 7.5%.

#budget2013: Here we look at how the UK public finances compare to what was expected way back at George Osborne's first budget in June 2010…

#Budget2013: 2010-12 UK unemployment rate in middle of G7 countries. Average GDP growth second slowest after Italy.

Excitement mounting here in Economics Towers as #Budget 2013 approaches. It’s our Christmas Eve.

#Budget2013 2010-12 UK structural def/GDP reduction largest in G7. Only Japan had larger debt/GDP increase acc. to IMF estimates & forecasts

(2) Biggest shortfalls versus forecast were #investment and #exports. Biggest overshoot was #government consumption. #budget

(1) By end 2012, #GDP was 3.4% smaller than the #OBR had expected in 2010. #budget

Average #earnings have fallen 7% behind #prices since mid-2008.

#Claimant count down 1.5k in Feb. L.T. #unemployment now 35.3% of total unemp. Priv sector employment up 151k pub sector down 20k in Q4.

#UK #Unemployment 7.8% 3mnths to Jan. Av. earnings growth down from 1.3%y/y to 1.2%y/y. Full time employees resp for most of gain in emp.

#CPI #inflation targeting IS flexible. The rate has been above the 3% upper threshold in 36 of the last 60 months, 60% of the time.

#CPI #inflation targeting IS flexible. The rate has been above the 2% target in 54 of the last 60 months, 90% of the time.

Cost of living in UK on the up again. CPI inflations at 2.8%y/y in Feb, from 2.7%y/y in Jan.

The economy of #Cyprus accounts for 0.17% of #euro zone #GDP. The city of Carlisle accounts for 0.17% of the UK's population.

Eurozone inflation rate continues to decline, dropping to 1.8% in Feb from 2% in Jan, as the economy continues to struggle

RT @JonathanRFord: Great to hear of *some* economic good news at @RBS_Economics seminar this morning!

Read our latest interest and exchange rate forecasts here - rbs.com/news/2013/03/h… #economics #fx #ECB #BoE #Fed