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Sunday, November 4, 2012

Bank of England set to brush off calls to pump more funds into economy

With inflation outstripping wages and a raft of benefit cuts to due in 2013, household incomes are likely to shrink, analysts warn

The Bank of England will resist calls this week to pump extra funds into the economy despite concerns that a recent decline in manufacturing production and the weak construction sector could force the UK into a triple dip-recession. Policymakers at the central bank will debate how to generate growth after more than three years of falling living standards.

With inflation consistently outstripping wages and a raft of cuts to benefits due in 2013, household incomes are likely to worsen, according to economists.

The bank's monetary policy committee (MPC) is likely to keep its powder dry after the economy briefly sprang back to life in the third quarter when gross domestic product (GDP) grew 1%.

A fall in unemployment in autumn and a modest rise in consumer spending have also offset worse-than-forecast manufacturing output, which has shrunk as the government's austerity policies and the euro crisis hit demand for UK goods.

While some MPC members could vote to boost quantitative easing (QE) by £50bn to £425bn, most economists expect a committee majority to keep interest rates at a record low of 0.5% and QE at £375bn.

Both the BoE Governor and deputy governor, Sir Mervyn King and Paul Tucker, have suggested in recent speeches that the impact of QE is reaching its limit.

Howard Archer, chief UK economist at IHS Global Insight, said: "While it still looks to be a close call, we believe the 1% quarter-on-quarter spike in GDP in the third quarter makes it more likely than not that the Bank of England will hold off from more QE."

Members of the MPC have come under intense pressure to cut the cost of lending and boost credit in the economy as the Treasury maintains its determination to limit government to pay down debts.

The MPC has waited to complete its last £50bn of government bond purchases and a new direct-funding scheme for banks (funding for lending), before pushing ahead with another £50bn of QE.

Economic analysts, the CEBR, said the economy will remain weak in 2013 and 2014, though it will outstrip the eurozone as it copes with the double whammy of sharply declining incomes and rising debts in several key countries. The CEBR said the UK would grow by 0.8% next year and 1.4% in 2014 against a eurozone average of -0.4% in 2013 and 0.4% in 2014.

"Even assuming the problems of the euro do not cause an economic meltdown before the German elections next year, we are looking at a very weak economic outlook in Europe for the next two years" said Tim Ohlenburg, senior economist at CEBR and main author of the report.

However, the UK could fall back into an unprecedented third recession in four years if the 1% rise in the third quarter proves to be an Olympics-induced blip.

The latest ICAEW/Grant Thornton UK business confidence monitor found smaller UK firms had scaled back plans for expansion in 2013.

The report noted that a mood of caution suggests while some sectors and regions start to improve, "economic recovery will be restrained in the next 12 months".

Michael Izza, chief executive of the accountancy body, the ICAEW, said: "While the UK economy has come out of recession, business confidence is still very fragile. Against a backdrop of a softening global economy, the recovery is yet to take hold. More needs to be done to secure the UK's long-term economic outlook by encouraging businesses to invest and to stimulate growth."

A survey of small businesses found that almost half were reluctant to invest in new jobs while confidence in the economy's ability to recover remained weak. The eurozone will slow the UK's recovery next year as the 17-member currency zone deals with a huge overhang of debts in Greece, Ireland, Portugal, Spain and Italy.

Greece is due to vote on €13.5bn of spending cuts and tax rises on Wednesday ahead of a budget vote next Sunday.

Prime minister Antonis Samaras is confident he can win the vote to secure more than €37bn (£30bn) of loans from the EU and International Monetary Fund.


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PAOK beats Panionios 2-1 in Greek league


PAOK beats Panionios 2-1 in Greek league
San Francisco Chronicle
ATHENS, Greece (AP) — Klaus Athanassiadis scored twice in the first half to lead PAOK to a 2-1 away win at Panionios in the Greek league Sunday. Christos Aravidis pulled one back for Panionios in the 56th, but PAOK held on despite being a man down ...

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Greek PM warns of euro exit

Antonis Samaras says failure to act on a new bill can see debt-ridden country exiting the eurozone for good.

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Euro Area's Resolve to Secure Single Currency Faces Greek Test


Press TV

Euro Area's Resolve to Secure Single Currency Faces Greek Test
Bloomberg
European leaders' resolve to keep Greece in the euro area will be tested this week as Prime Minister Antonis Samaras struggles to secure political support for measures to assure the country's bailout lifeline. Samaras today pledged that the raft of ...
A Critical And Close Vote Is Happening In Greece This Week - Here's What You ...Business Insider
Greek PM warns of euro exit ahead of voteThe Australian
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RIA Novosti -Greek Reporter -Press TV
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Livonia boys share Class B soccer championship with Greece Odyssey ...


Rochester Democrat and Chronicle (blog)

Livonia boys share Class B soccer championship with Greece Odyssey ...
Rochester Democrat and Chronicle (blog)
The unbeaten season for the Livonia boys soccer team now includes a trophy. Coach Ray Maxwell's team played Greece Odyssey to a scoreless draw late Saturday night, as the school's shared the Section V Class B championship, and then the Bulldogs ...

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Greece in labour law standoff with troika


New Europe

Greece in labour law standoff with troika
New Europe
Policemen holding black flags and shouting slogans march in central Athens during an anti-austerity demonstration in Athens on November 1. The International Monetary Fund said that talks between Greece and the troika of international lenders remained ...


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Picture perfect Greece


Picture perfect Greece
The Bay of Plenty Times
Picture perfect Greece | Bay of Plenty Lifestyle News | Health, Fashion, Food and Wine in Bay of Plenty Bay of Plenty Times. « » Visit our marketplace. Phone us with your news tips - it's free. Sign up for our daily newsletter · Send a letter to the ...

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Big Problems In Greece. Are the Jews riding out the storm? Walter Visits the ...


Big Problems In Greece. Are the Jews riding out the storm? Walter Visits the ...
Arutz Sheva
Right now Greece is in great economic turmoil affecting all sectors of her people and the Jewish community as a whole and individually is no exception. So Walter went to Athens with the microphone of Walter's World to find out how this financial crisis ...


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Money laundering fears may hamper Cyprus aid: German report

BERLIN (Reuters) - Cyprus's request for a bailout has created a political headache for German Chancellor Angela Merkel on concerns wealthy Russians could be the chief beneficiaries, the weekly magazine Der Spiegel said on Sunday, citing an intelligence agency report. Cyprus is in talks with international lenders on the terms of a bailout expected to total 10 billion euros after its two largest banks incurred huge losses due to the Greek debt writedown earlier this year. The scale of the aid is tiny compared to Greece and other struggling euro zone countries. ...

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Greece braced for crucial votes


Kathimerini

Greece braced for crucial votes
Financial Times
Antonis Samaras, the Greek premier, warned lawmakers from his centre-right New Democracy party on Sunday that the country would be forced out of the euro if they failed to back a new €13.5bn “structural package” in a critical parliamentary vote this week.
Crucial votes will end talk of Greece exiting euro: PMChicago Tribune
Divided Greece Torn By Hard Times, AusterityEurasia Review
Reform votes to end talk of Greek euro exit-PMReuters
Greek Reporter -Kathimerini -Business Insider
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A Critical And Close Vote Is Happening In Greece This Week


Economic Times

A Critical And Close Vote Is Happening In Greece This Week - Here's What You ...
Business Insider
ATHENS (Reuters) - Talk of Greece exiting the euro will end after critical votes in parliament this week on new austerity measures, labor reforms and the 2013 budget, Greek Prime Minister Antonis Samaras said on Sunday. The three-party government will ...
Reform votes to end talk of Greek euro exit-PMReuters
A Test for Samaras as Greece Closes DownGreek Reporter
Ahead of key votes, Greek PM warns of euro exitFocus News
Economic Times
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The secret of perfect pins: Curves and length are most desirable in a pair of women's legs

Kate Moss, Victoria Beckham and the Duchess of Cambridge all have legs that fit the formula behind what are considered beautiful legs. Even Barbie Dolls and ancient Greek sculptures possess the secret ingredients.

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Crucial votes will end talk of Greece exiting euro: PM

ATHENS (Reuters) - Talk of Greece exiting the euro will end after critical votes in parliament this week on new austerity measures, labor reforms and the 2013 budget, Greek Prime Minister Antonis Samaras said on Sunday.







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Reform votes to end talk of Greek euro exit: PM

ATHENS (Reuters) - Talk of Greece exiting the euro will end after critical votes in parliament this week on new austerity measures and the 2013 budget, Greek Prime Minister Antonis Samaras said on Sunday.



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Heads We Win, Tails You Lose: Hedge Funds Love Greek Bonds


Heads We Win, Tails You Lose: Hedge Funds Love Greek Bonds
Seeking Alpha
At the time, Greece had recently completed a debt restructuring which saw private creditors take a 75% haircut on the Greek bonds, helping Athens to reduce its debt load by 100 billion euros. Among those who suffered in the PSI was the president of New ...


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Reform votes to end talk of Greek euro exit-PM


Reform votes to end talk of Greek euro exit-PM
Chicago Tribune
ATHENS (Reuters) - Talk of Greece exiting the euro will end after critical votes in parliament this week on new austerity measures and the 2013 budget, Greek Prime Minister Antonis Samaras said on Sunday. On Monday, Samaras's coalition government will ...

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Battered by euro crisis, Greek society in free-fall


Battered by euro crisis, Greek society in free-fall
Cherry Hill Courier Post
FILE In this Thursday, Sept. 27, 2012 file photo, Anastasia Mouzakiti, right, a paraplegic from the northern city of Thessaloniki, who came to Athens with her husband, left, who is also handicapped, to demonstrate, depart from a protest, outside the ...

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New Greek's Pizzeria finally gets opening date


New Greek's Pizzeria finally gets opening date
Muncie Star Press
Mink said neighboring businesses have been getting a lot of questions from their customers about when Greek's will open, and he said he's been hearing questions himself, particularly when he's been working at the Greek's in the Village, which has seen ...


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