Second estimate of UK GDP shows trade deficit up and business investment downUpdated GDP figures released - coverage starts hereEconomists: Not much sign of rebalancing Business investment falls...Trade deficit widensThe key charts 12.50pm GMT *GREECE-TROIKA TALKS INTENSIVE, TO CONTINUE: EU'S COSTELLO 12.46pm GMT The negotiations between Greece’s government ministers and its international lenders in Paris have ended (at least for the moment), according to reports on the wires. And the two sides do not appear to have reached agreement over Greece’s fiscal plans for 2015. #Greece Govt & Troika conclude 2-day mtng at OECD offices in Paris. Acc to reports, differences remain ovr fiscal gap, pensions & labor law. 12.25pm GMT Readers often point out that the UK recovery has not yet reached many people, as real wages having been falling for most of the last four years.This chart, from investment bank Citi, shows clearly that labour’s “share of the pie” has now fallen to the lowest in 16 years.Workers' compensation as share of GDP lowest since 1998 in Q3 (56.9%) according to Michael Saunders of Citi: pic.twitter.com/UzvmmHj5CZ 12.16pm GMT It was only yesterday that Mark Carney told us the UK economy was "more balanced" A day later #GDP tells us balanced to services! #BoE 12.15pm GMT The number of people in work in the Irish Republic it at its highest since 2009, our Dublin correspondent Henry McDonald reports:Unemployment is still falling with the jobless rate currently down to 11.% of the workforce in Ireland, according to the Central Statistics Office in Dublin.The CSO said this is the eight successive quarter of a year where there has been an annual increase in employment. The number of long term unemployed in Ireland is also falling from 7.6% to 6.4% from the previous quarter, the CSO said.“The Irish Economy is growing strongly and most importantly jobs are being created. Budget 2015 was designed to strengthen and broaden this recovery to families across the country.” 11.51am GMT In other news... property inflation in Ireland has hit its highest level in eight years, with prices up 16.3% year-on-year in October.What cld go wrong? MT@RobinWigg: Irish prop price gains accelerate to fastest pace since 2006. http://t.co/fjTwuPdUfL pic.twitter.com/GViweSFAxO 11.39am GMT Here’s our news story on today’s UK growth data: 11.29am GMT The latest survey of UK retail spending, from the CBI, has found that 44% of shops reported that sales this month are higher than a year ago, while 17% say they fell. “It’s no secret that it has been a demanding year for the retail industry but shopkeepers haven’t been pulling their punches when it comes to getting shoppers through their doors – borne out with the lowest essential item inflation in five years and growing online sales.“This latest survey shows many have been winning some rounds in what has been one of the most challenging years for both the industry, and for customers. 11.11am GMT Our economics editor, Larry Elliott, has compared the second estimate of UK GDP to ‘peeling off an onion ring’.The domestic economy expanded by 0.9%, with trade knocking 0.2 points off the quarterly growth rate. Consumer spending rose by 0.8% in the third quarter, while government expenditure was up by 1.1%. Business investment fell by 0.7%.Ministers can point to the weakness of the eurozone to explain away the poor export performance. This, though, is a feeble excuse given the weakness of exports – despite the boost from a substantial depreciation of sterling – throughout this parliament. 10.55am GMT Lee Hopley, chief economist at manufacturers group EEF, has urged George Osborne to give exporters more assistance.“While business investment posted a bit of a dip, this isn’t yet cause for concern as surveys of intentions across the private sector seem to be holding. The drag from net trade is, however, providing a bigger challenge to rebalancing ambitions. Next week’s Autumn Statement needs to ensure that the business environment for companies planning to invest, recruit and get into new markets are a target for further action from the Chancellor.” 10.52am GMT There is little evidence in today’s GDP report that Britain’s economy is rebalancing, warns Mark Miller, UK analyst at the Economist Intelligence Unit.The expenditure components do not suggest a meaningful shift to more balanced economic activity, with private consumption growth accelerating modestly during the latest quarter and exports contracting at the same pace as in the second quarter.Amid current signs of weaker growth in the euro zone, it is far from clear this re-balancing will be achieved anytime soon.” 10.42am GMT Marc Ostwald of ADM Investor Services says:On the surface GDP looks OK, with growth unrevised at +0.7% quarter-on-quarter.... but the details are not good outside of the services sector’s growth of 0.8%, revised up from a preliminary reading of 0.7% 10.38am GMT Several economists are warning that UK growth is unbalanced.Jeremy Cook, of currency exchange company, World First, said: “Overall growth of 0.7% is still pretty strong, especially against yesterday’s German figure of a meagre 0.1% increase in output. Unfortunately it is the make-up of this growth that has given us some cause for concern. “Seeing consumer spending increase at 0.8% - the highest number in four years – is all well and good. Consumer spending makes up around 70% of the UK economy, so without it we would be in dire straits. 10.25am GMT These charts explain the situation in the UK economy today.1) The recovery from the global recession of 2008 continued in the third quarter of this year. GDP in the UK grew steadily during the 2000s until a financial market shock affected UK and global economic growth in 2008 and 2009. Economic growth resumed towards the end of 2009, but typically at a slower rate than the period prior to 2008. Quarterly growth in this period was also erratic, with several quarters between 2010 and 2012 recording flat or declining GDP. 10.12am GMT Britain was not the fastest growing member of the G7 in the last quarter alone. America’s economy expanded by almost 1% in the July-September period, according to data released yesterday. 10.06am GMT The UK Treasury has declared that The Plan is working (does any Treasury statement not say that these days?!):“Today’s figures show that the government’s long term economic plan is working, with the fastest annual growth in the G7 and all the main sectors of the economy growing. But the UK is not immune to weakness in the euro area and instability in global markets, so we face a critical moment for our economy. We need to carry on working through our economic plan that is securing a resilient economy and a better future.” 9.58am GMT You can see the full GDP report yourself, on the ONS website (right-click to open in a new tab). 9.46am GMT Newsnight economics editor Duncan Weldon agrees that the GDP report isn’t very encouraging, even though growth was confirmed at 0.7%.Detail of GDP stats not great for rebalancing. Exports & business investment weak, consumption strong. 9.45am GMT The ONS also reports that Britain’s trade balance deficit widened in the last quarter, from £8.9bn in Q2 2014 to £11.2bn in Q3And that’s because exports fell.Following a 0.4% decrease in Q2 2014, exports fell by 0.4% in the latest quarter, while imports increased by 1.4%. With exports contracting and imports increasing, the net trade balance worsened when compared to the previous quarter. 9.43am GMT And for all the talk of rebalancing the economy, consumer spending continues to help drive the recovery. The ONS says household final consumption expenditure rose by 0.8% in Q3 2014 and has increased for thirteen consecutive quarters. 9.41am GMT The ONS says that the drop in business investment was led by “the intellectual property products (IPP), and in particular the software component of this asset”. 9.40am GMT This isn’t great news either: Business investment in the UK fell by 0.7% in the third quarter of the year.That is the first drop in business investment since the second quarter of 2013, and follows 3.3% growth in Q2. 9.37am GMT The UK construction sector grew by 0.8%, in line with the first estimate of GDP. 9.37am GMT in the detail of that 2nd UK GDP estimate for Q3, UK services upwardly revised to 0.8% whilst ind prod revised from 0.5% to 0.2%. 9.36am GMT The UK recovery looks less balanced, according to the data just released. The ONS has revised up growth in the service sector in the last quarter to +0.8%, from +0.7% originally. 9.31am GMT Breaking: The UK economy grew by 0.7% in the third quarter of this year, the Office for National Statistics says.That’s in line with the initial estimate last month. 9.28am GMT Here comes the second estimate of UK GDP..... UK GDP coming up in 3 mins.... come on the UK! 9.20am GMT Heads up: European Central Bank vice-president Vitor Constancio has declared that the ECB could start a full-blown quantitative easing programme early next year.In a speech in London, Constancio slaps down suggestions that the ECB shouldn’t, or couldn’t, embark on sovereign QE (buying government bonds with new money).Constancio: Argument That QE Wouldn't Work 'not Well Founded'Constancio has upset the applecart 9.10am GMT In the financial markets.... the pound is flat this morning at $1.571 as traders wait for the second estimate of UK GDP to be released at 9.30am. European stock markets are up this morning. Traders say that yesterday’s strong US GDP figures, showing its economy growing by almost 4%, 9.00am GMT No respite for Thomas Cook; shares are still down around 20% as investors wonder exactly what’s behind Harriet Green’s exit.Green has given some intriguing interviews this year. In January she told Management Today that she won’t hang around when the time comes to leave the company:‘CEOs spend too long in the same job,’ she says. ‘You should do what you have to do, have maybe a couple of years hugging everyone and then move on. I think that adds up to six or seven years, not 16 or 17.’Recent “babble” that she might take a peerage and a government job is nonsense. “Anyone who knows me in the least would know that a tap on the shoulder to be Lady Whatever to solve the National Health Service is not me, not how I function. I don’t like any form of supervision, let alone government and voters.” 8.44am GMT Juncker began his appearance in the European Parliament by declaring that “Christmas has come early”, as he explained how his €315bn investment fund would work. He concluded by warning MEPs that ‘there can be no turning back”. The BBC website has a rolling report: 8.35am GMT Over in Brussels, European Commission president Jean-Claude Juncker is proudly unveiling his new multi-billion euro investment fund.Juncker, who must be relieved to be discussing growth rather than tax avoidance, says Europe needs a “kick-start”, and this is the way to do it.#Juncker: Every €1 put into the new fund can generate €15 in investment. €315bn not upper bound. If fund works, I think we should go beyond.We need political support for this investment plan, not a politicisation of the plan.Juncker on new #EU investment package: "I have a vision of a new school in Thessaloniki equipped with brand new computers". 8.19am GMT Here’s our news story on the shenanigans at Thomas Cook: 8.10am GMT More than £400m wiped from value of Thomas Cook as shares crash 20% on CEO Harriet Green's shock departure: http://t.co/nmZuecaj4b 8.09am GMT The sudden, unexpected nature of Harriet Green’s departure has clearly spooked investors:Thos Cook shares open up down 20%!!! Why was Harriet Green relieved of her duties with such indecent haste and unsatisfactory explanations? 8.06am GMT Shares in Thomas Cook have plunged by 20% at the start of trading, following the shock exit of CEO Harriet Green.Investors will be right to ask questions over how her departure will affect the turnaround plan, so expect much of the price reaction today to be in connection to this.The other issue is the turnaround plan – the warning that growth will be more moderate (i.e. slower) in the coming year is a sign that the easy bit has been done. 8.00am GMT Frank Meysman, chairman of Thomas Cook, is facing the press (by telephone) to explain the unexpected departure of CEO Harriet Green.He’s confirmed that Green will receive a six-month payoff, and also stated that the company needs a boss with a more detailed grasp of the industry (?!).Thomas Cook chairman says company needs different abilities now. Strategy in place and needs someone with more travel industry knowledge.Thomas Cook chairman says Harriet Green always knew "this job will end at some point in time".Thomas Cook chairman says board, including Green, unanimous that now was time for her to hand over. She'll get 6 months' notice plus shares.Thomas Cook chairman says he doesn't think Green has a new job "but she may surprise you on that one". "Maybe she will sleep a bit more." 7.49am GMT Big news in the City this morning – Harriet Green, the businesswoman who led the turnaround of holiday chain Thomas Cook, is leaving the company with immediate effect.Her remit was to transform the company, placing it on a sound financial footing with a solid operational team able to compete in the consumer travel market.I always said that I would move on to another company with fresh challenges once my work was complete. That time is now.Thomas Cook shares seen lower following FY results which indicate tougher trading for 2015 + resignation of CEO Harriet Green 7.39am GMT Good morning, and welcome to our rolling coverage of the economy, the financial markets, the eurozone and business.Coming up this morning... we get the second estimate of UK GDP this morning, at 9.30am. Continue reading...
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