UK Housing Equity Withdrawal (HEW) - 2012 Q3

on , from bankofengland.co.uk

In seasonally adjusted terms, the Bank’s measure of housing equity withdrawal (HEW) in 2012 Q3 was -£8.0bn (Table A). HEW as a percentage of post-tax income was -2.9% in 2012 Q3, compared to -3.5% for 2012 Q2. The negative figure indicates a continued injection of housing equity by households overall, with the net flow of lending secured on dwellings remaining weaker than their investment in housing. The flow of secured lending remained positive (Table A). The decline in HEW – and move to injections of housing equity - since the start of the financial crisis (Chart 1) has not been associated with ... (Read the full story)

EU exit will not shelter UK from the economic storm

on , from guardian.co.uk

You have got to hand it to the Conservative party's right wing and their camp followers in Ukip. They may own properties in France, Spain or Italy; the excessive free-market policies they enthusiastically espoused under Margaret Thatcher may have contributed to a situation where about half of "our" exports are produced by foreign-owned companies in the UK, but my goodness, don't they just hate Europe! As if the conjuncture of a world financial crisis and a eurozone on life support is not enough, it looks as though the big issue which is going to dominate British politics in 2013 is not how ... (Read the full story)

Global Economy - New year, old demons

on , from reuters.com

Out with the old, in with the new has a fine New Year's ring to it. Unfortunately, the saying does not apply to the global economy: the uncertainty over U.S. fiscal policy that dominated the last weeks of 2012 is far from going away. That uncertainty, which is causing businesses to draw in their horns, is likely to be reflected in two important December indicators this week - the Institute for Supply Management's manufacturing survey on Wednesday and the jobs report on Friday. The ISM index probably rose to 50.2 from 49.5 in November, still well below the second-quarter average of 52.7, while the ... (Read the full story)

Negative rates on deposits would force Eurozone core banks to repay their LTRO funding

on , from soberlook.com

There is concern among some Eurozone banks that the ECB may push the deposit rates on excess reserves into negative territory next year. In fact the 12-month EUR OIS rate (the so-called EONIA swap rate), which is the market expectation of where the overnight rates will be next year, briefly dipped below zero recently. If that were to happen, banks would in effect be penalized for holding excess reserves at the ECB. Such action would force those who are able (more likely the core banks) to pay down their borrowings from the ECB (otherwise they are paying 1% for the LTRO funding and then paying again for ... (Read the full story)

U.K. Risk of Triple-Dip Recession Recedes

on , from bloomberg.com

U.K. executives’ confidence for 2013 improved this month, indicating the risk of a triple-dip recession has receded, according to Lloyds Bank. An index of business sentiment rose to 40 from 35 in November, the unit of Lloyds Banking Group Plc said in a report in London today. A gauge measuring the outlook for the economy increased to 20 from 17, which Lloyds said is consistent with “broadly flat underlying growth” at the end of this year. Britain’s economy emerged from a recession in the third quarter, helped by a boost from the London Olympic Games. While the Bank of England has said gross ... (Read the full story)