The Business: Friday May 30 2014
Company news, markets and financial talking points, available from 8am Monday to Friday
Drug dealers and prostitutes will give Britain a £10bn boost as the country revamps the way it measures its economy, says the Financial Times. The move will help add 5% to the UK’s gross domestic product. The Office for National Statistics said prostitution could add £5.3bn to GDP and illegal drugs could add £4.4bn. Joe Grice, chief economic adviser at the Office for National Statistics, said: “As economies develop and evolve, so do the statistics we use to measure them.”
The CBI and the British Chambers of Commerce have both given the UK economy a boost with glowing new data. The CBI says growth in May was the highest it has been since the organisation began collecting data in 2003. It expects growth to remain above average for the coming quarter. The BCC has upgraded its forecast for 2014 from 2.8% to 3.1%. If the new target is met it would be the highest rate since before the financial crisis.
The US economy shrank in the first quarter of 2014, its first fall in three years. The annual rate drop of 1% is being blamed on the harsh winter, and US financial markets are expected to dismiss the report for that reason. Also, there are signs that economic activity is rebounding. A strengthening labour market has been indicated after the number of Americans filing new claims for unemployment benefits fell more than expected last week.
“Despite the poor US data, and a raft of worrying issues almost everywhere one looks, the global recovery nevertheless remains broadly on track, despite some wobbles and some laggards; the real challenges will come later when monetary policy begins to tighten in earnest.” City AM’s Allister Heath says we are okay – for now.
A Bank of England director has defending low interest rates and quantitative easing, says The Guardian. Andrew Haldane says Britain would be considerably poorer without the controversial policies. He admitted the policies could cause inequality, but added that without them, “In money terms, we as a nation would have been perhaps £80bn to £100bn poorer. The income pie would have been materially smaller.”
British workers can be ‘bought’ for £1,722, says the Daily Telegraph. The loyalty of a British worker can be sealed with just a 5.3% pay rise, says a global study. In contrast, workers in Indonesia would require a 20.6% pay rise to move jobs, with a rate of 20.1% in Brazil. In France, workers say they would need an 8.6% pay rise, with those in Spain needing 5.9%. The study was conducted by the global advisory firm CEB.
FTSE-100: up +0.29 to 6871.29
Dow Jones: up +0.39 to 16698.74
Dax: down -0.00 to 9938.90
Cac-40: down -0.02 to 4530.51
Nikkei: down -0.34 to 14631.41
Hang Seng: up +0.22 to 23060.20
US dollar: buys €0.73490 and £0.59680
Sterling: buys $1.67550 and €1.23130
Oil: $110.10 up +0.3