Global| Jun 18 2008UK Prices Pressures Mount for Industry
Summary
UK orders snapped back to a thin +1 reading for June after -10 net balance reading in May and a deeper decline for April. But the story is that price pressures continue to rage at intense levels at a +28 reading for the July-Sep [...]
UK orders snapped back to a thin +1 reading for June after -10
net balance reading in May and a deeper decline for April. But the
story is that price pressures continue to rage at intense levels at a
+28 reading for the July-Sep period barely down from +30 for June-Aug
despite some substantial order weakness in earlier months. Export
orders made some recovery in June but still posted a net balance
reading of -5 up from -12 in May. Stock building was halved from a new
reading of +16 to +8 in June.
After having embarked on path of rate cuts, the BOE is having
real second thoughts. In its last meeting it was just revealed that the
BOE actually considered a rate hike. That news shook sterling markets
on the day. With the CIPS report we can see why the BOE is thinking of
changing course. Firms are planning price increases on a broad scale
and the BOE is currently not happy with the prevailing over-the-target
inflation performance it has helped to engineer. With the revelation
that the BOE considered a rate hike (but held back) it joins the ranks
of other central banks, notably the ECB and the Fed, that are planning
to hike rates or warning of the possibility of hiking.
| UK Industrial volume data CBI Survey | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Reported: | Jul 08 |
Jun 08 |
May 08 |
Apr 08 |
12MO Avg | Pcntle | Max | Min | Range |
| Total Orders | #N/A | 1 | -10 | -13 | 1 | 84% | 9 | -40 | 49 |
| Export Orders | #N/A | -5 | -12 | -12 | -5 | 83% | 3 | -43 | 46 |
| Stocks: Final Goods | #N/A | 8 | 16 | 12 | 11 | 36% | 26 | -2 | 28 |
| Looking ahead | |||||||||
| Output Volume: Next 3M | 11 | 2 | 0 | 0 | 8 | 54% | 28 | -28 | 56 |
| Avg Prices 4 Next 3M | 28 | 30 | 25 | 25 | 21 | 100% | 30 | -29 | 59 |
| From end 2000 | |||||||||
| Compare to CIPS MFG | |||||||||
| May 08 |
Apr 08 |
Mar 08 |
Feb 08 |
12MO Avg | Pcntle | Max | Min | Range | |
| UK MFG | 50.03 | 50.81 | 51.14 | 51.19 | 52.76 | 42% | 56.32 | 45.46 | 11 |
Robert Brusca
AuthorMore in Author Profile »Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media. Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.
