http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-16.htmlThere have been some important developments on the UK inflation front recently. Firstly, the ONS has published a consultation document outlining proposed changes to the way mortgage interest payments are captured within the RPI. The changes, if implemented, could have important consequences for the volatility and profile of retail price inflation from early next year. Second, the Bank of England (BoE) recently published its latest Quarterly Inflation Report (QIR). The QIR outlines the MPC’sMon, 16 Nov 2009 11:07:31 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-16.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-09.htmlGlobal financial markets this week will focus on industrial production and trade data. Generally, the trend appears to be that industrial output in Europe is finally recovering after the severe bout of destocking earlier in the year and at the end of 2008. However the UK appears to be lagging at present. Trade data will show that deficits remain wide, but that there is some modest narrowing underway. UK financial market attention will be focused on the Quarterly Inflation Report, where we lookMon, 09 Nov 2009 12:13:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-09.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-02.htmlIt is clear from figures released for Q3 2009 that the Asian economies are leading the global economic recovery. This is despite the fact that last week, the US released data which showed that the economy expanded by an annualised 3.5% in Q3, ending the longest period of recession since the 1930s. Forecasts for 2010 (IMF data in table 1) show that the Asian economies will expand by 5.8% after a rise of 2.8% this year. In the context of the worst global downturn since the 1930s depression, thisMon, 02 Nov 2009 12:00:35 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-11-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-26.htmlThe Bank of England’s (BoE) latest monthly Trends in Lending report was published last week. The report provides a timely assessment of lending conditions in the UK, and provides an update on the BoE’s recently released Q3 Credit Conditions survey. Below, we examine the recent BoE surveys and assess the extent to which credit constraints have eased. With the UK FTSE-100 recently hitting a new twelve-month high and spreads in the interbank markets having dropped to their precrisis levels,Mon, 26 Oct 2009 11:01:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-26.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-19.htmlFor all of the furore about the dollar’s slide, it is easy to lose sight of the underlying forces at play. However, we should not be complacent, as these forces can still have destructive effects on global growth prospects. Global imbalances, represented broadly in the growing US current account deficit and rising surpluses in many other parts of the world, were one of the prime - for some, the only - reasons for the global crisis that is still unwinding. A necessary part of the adjustment toMon, 19 Oct 2009 11:04:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-19.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-13.htmlEach year, in the August Inflation Report, the Bank of England reviews the accuracy of the inflation forecasts made by the UK Monetary Policy Committee (MPC). The reports have become of increased interest, as there has been a suspicion that the policy committee has been unduly conservative about the inflation risks facing the UK economy. If true, this would suggest that over the past decade monetary policy may have been tighter than it should have been given the MPC’s strict inflation remit.Tue, 13 Oct 2009 05:36:23 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-05.htmlIt would be nice and easy to believe that the road to economic recovery is now clear and straightforward after the financial market crash of 2007-2009. Equity markets have had one of the best quarters ever, corporate and government bond yields have fallen sharply and spreads, in cash and corporate bonds, are narrower than at any time since the crisis gathered momentum in 2008. Economic growth has resumed in Q2 or Q3 of 2009 for most economies after a year of declines. Housing markets (US, UK,Mon, 05 Oct 2009 11:13:07 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-10-05.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-28.htmlJudging by the fevered headlines surrounding the fall in the UK’s exchange rate over the past couple of weeks, one might imagine that sterling was on the verge of a currency crisis. We argue that it is not. We examine the reasons for the recent decline in the UK currency and assess its prospects going forward. Our conclusion is that, far from being a cause for concern, the depreciation is not only desirable, but essential if the UK is to undergo a successful rebalancing away from domesticMon, 28 Sep 2009 11:17:03 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-28.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-21.htmlHow long will it take for UK gdp to return to its previous peak? In recent comments to the Treasury Select Committee on economic affairs, Mervyn King, the Governor of the Bank of England, said that “UK economic recovery would be slow and protracted” and added that “It is very important not to lose sight of the fact that growth rates do not tell the whole story. It is the levels that matter”. With increasing signs that the UK economy will return to growth in the current quarter after a deepMon, 21 Sep 2009 12:18:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-21.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-14.htmlOne of the key indicators of how well economies perform is productivity. Over the medium to long term, real income growth, and hence living standards, depend on how fast an economy can grow its output based on its labour and capital inputs. Those economies that perform well on this score tend to be those that are the most flexible and dynamic – i.e. those that have a high degree of skilled labour, undertake strong capital investment, employ a high proportion of their available workforce, andMon, 14 Sep 2009 13:25:56 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-14.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-07.htmlGlobal economic recovery gets underway A global increase in liquidity has been underway in an attempt to kick start economic recovery ever since the depth of the financial crisis was understood. It appears to be working. A range of countries have recorded a rise in economic growth in Q2, including Germany, France and Japan, see chart a. For many of them, this was the first rise in economic activity in over a year, after sharp consecutive quarterly declines. However, the US and the UK recordedMon, 07 Sep 2009 11:50:52 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-09-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-31.htmlOne of the positive by-products of the UK economic downturn over the past two years - and there have not been many - has been the improvement in the UK’s economic imbalances. It is hoped that these improvements, if sustained, will eventually leave the UK economy better placed to benefit from the next cyclical upturn. So what is meant by the UK’s imbalances; why have they improved; and what are the implications for the UK economy over the coming years? Opposite sides of the same coin There areMon, 31 Aug 2009 11:22:56 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-31.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-24.htmlUK consumer price inflation stubbornly high... In July, UK price inflation was well above financial market expectations, recording a 1.8% annual print, significantly higher than the consensus estimate of 1.5%. The ‘core’ rate, which excludes food, energy, tobacco & alcohol, rose to 1.8% from 1.6% in June, while both key measures of retail price inflation were also higher at -1.4% (RPI) and 1.2% (RPIX). Although the latest data contrast with the view from the Bank of England that inflationMon, 24 Aug 2009 11:33:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-17.htmlIt is clear that a remarkable economic recovery is underway in Asia, led by China and India, but is the same true of the developed economies? Recent economic figures for Germany and France have prompted many commentators to predict that recovery has started. But is this true or is it more a levelling off of activity? Moreover, not only have financial markets been expecting recovery, as shown by the strong rise in equities in recent months, but they have been looking for it to start in EuropeMon, 17 Aug 2009 10:49:15 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-10.htmlAfter last week’s European central bank announcements, attention turns to Wednesday’s US FOMC meeting. We expect an unchanged 0-0.25% federal funds target range and for the policy statement to reiterate that this is likely to continue for an extended period. The statement may also touch on the exit strategy from QE, although the question of timing is likely to remain open. The Bank of Japan also announces its policy decision, amid signs that economic conditions have stopped deteriorating.Mon, 10 Aug 2009 10:44:55 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-03.htmlFollowing the onset of the global credit crisis two years ago, it was generally believed that developing economies, particularly in Asia, would be better placed to weather the storm than some of the more advanced economies, such as the US and UK. It was reasoned that the export-orientated, savings-rich countries, with the support of China, faced little prospect of an external payments crisis and were one step removed from the bursting of the debt bubble created in western economies.Mon, 03 Aug 2009 11:30:30 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-08-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-27.htmlDespite unprecedented injections of liquidity, monetary growth is still slowing Since the global financial crisis erupted, central banks around the world have pumped billions into stabilising financial markets. To a large extent this has worked, in terms of currency volatility, money market interest rate spreads, equity and bond markets, there has been a marked improvement. Indeed, the evidence is that investment banks have been restored to health, if burgeoning profits in Q1 and Q2 for thoseMon, 27 Jul 2009 10:50:05 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-27.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-21.htmlAfter a run of monthly economic indicators suggesting that the worst of the economic downturn has past, and some stabilisation and improvement in financial markets (accompanied by big profit announcements by some investment banks for Q2), some commentators believe that recovery is all but assured. Unfortunately, the reality may be rather more complicated, as economic and market indicators are not showing recovery but a deceleration in the pace of economic contraction. One way of assessing thisTue, 21 Jul 2009 08:15:36 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-21.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-13.htmlThere is little doubt that 20 years of ever rising leverage is now over. The period of rising debt was characterised by an increase in the frequency, and intensity, of financial crisis, culminating in the worst collapse since the 1930s. Ever rising debt was not just a UK phenomenon but it, and the US, experienced the fastest growth in indebtedness during the last decade, see chart a, reflecting a widening gap between domestic savings and investment. So, critical to the resolution of the globalMon, 13 Jul 2009 13:01:40 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-13.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-06.htmlThe credit crisis and the onset of global recession have focused policymakers' attention on how to remedy the economic imbalances both within and across countries. Within the UK, the main focus has been on the imbalances in the household, financial and public sectors. But the non-financial corporate sector balance sheet also has a crucial role to play in the current downturn, and the prospects for this sector, perhaps more than any other, are likely to determine both the breadth and depth ofMon, 06 Jul 2009 12:12:38 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-07-06.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-30.htmlMany assumptions about economic and financial market performance have been shattered in the 2 years since the global credit market crisis started. Not least amongst these assumptions was the view that ‘lean production’ methods – including manufacturers keeping stocks to a minimum and producing on demand to customer specification – would reduce the impact of the stock or inventory cycle on economic growth. But this economic downturn has, as always, been led by investment cut backs and falls inTue, 30 Jun 2009 07:39:22 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-22.htmlRecent developments have raised concerns that the UK could be facing an upsurge in price inflation over the coming years. Since early March, oil prices have doubled; the economy has found a firmer footing; and broad measures of inflation expectations have shifted higher. The rise in some of the forward-looking inflation indicators has occurred as the Bank of England has embarked on an unprecedented loosening in UK monetary policy. Having cut interest rates to a record low, the Bank has turnedMon, 22 Jun 2009 11:19:21 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-22.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-16.htmlWhilst the focus in global financial markets is, rightly, on when the recession will end, and on speculating on whether the proliferating signs of economic recovery are sustainable or not, there is another less observable trend that has not been changed by the recession: this is the higher share of global economic output taken by the emerging markets. Chart a highlights this trend. We have calculated the share of world economic output accounted for by the top ten developed economies (rankedTue, 16 Jun 2009 12:24:27 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-16.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-08.htmlThe release of the Bank England’s Inflation Report in May showed that it expected the economic downturn to be steeper and to last longer than it projected in the February report. This view was echoed in the latest consensus forecasts for the UK, also released in May. The expectation in that report was for the UK economy to contract by 3.8% this year and to expand by just 0.3% in 2010, see table 1. But recent monthly economic dataflow, from PMI surveys to housing statistics, are showing thatMon, 08 Jun 2009 10:46:57 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-08.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-02.htmlThe Bank of England (BoE) and the European Central Bank (ECB) are expected to leave interest rates on hold at their monthly meetings on Thursday, and we expect neither of the two Banks to make changes to previously announced non-standard credit easing measures. In the US, we expect the rate of decline in employment to have slowed in May for a second successive month, but the unemployment rate is forecast to have risen above 9% to the highest level since September 1983. BoE MPC members haveTue, 02 Jun 2009 05:16:20 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-06-02.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-26.htmlWe are expecting a small upward revision to US Q1 GDP in the second estimate based on a slightly more positive contribution from net exports. However, the depth of GDP contraction will have remained historically steep, see chart 1. Also this week, we are looking for a second consecutive monthly rise in the key German IFO business survey. This mirrors other European surveys that show the region’s recession is easing, but output still contracting, see chart 2. In addition, a plethora of speechesTue, 26 May 2009 11:27:28 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-26.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-18.htmlUK data this week will highlight the growing impact of the recession on consumers, as increased uncertainty and rising unemployment change their saving and spending patterns. The first view of the expenditure components of Q1 2009 GDP are published on Friday, with another sharp fall expected in consumer spending, while changes to the methodology used by the ONS to calculate retail sales volumes pose a downside risk to figures for April due on Thursday. News on Tuesday that inflation edgedMon, 18 May 2009 11:40:52 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-18.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-12.htmlThere appears to be a growing view, most evident in equity markets, that the worst of the recession may be behind us. Behind this perception has been a run of better than expected economic data, in the UK and elsewhere. Unfortunately, the majority of the economic figures released are still consistent with declining output, just at a decelerating pace. But there is one aspect of the UK recession that is noticeable: the remarkable resilience so far of volume retail sales relative to what hasTue, 12 May 2009 07:48:42 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-12.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-05.htmlThe world economy is currently experiencing its steepest downturn since the 1940s, with global trade expected to contract by 10% this year, see chart a. Global economic output could fall by 2%, with growth in the advanced economies dropping by at least twice this rate, around 4- 5%. This is the first time that there has been a synchronised downturn amongst the major economies since the 1930s. It is interesting that the emerging markets are weathering the downturn much better than the advancedTue, 05 May 2009 13:26:06 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-05-05.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-28.htmlOverview UK Budget 2009 announcements were as grim as expected. Official borrowing will reach over 12% of the economy in the current financial year, or £175bn. It will fall only slightly in 2010/11 to £173bn, and to 11.9% of the economy if the official forecast of 1.25% growth for 2010 proves correct. If the official growth forecast is not met, however, the actual borrowing outcome in 2010/2011 may be as much or higher than this year. These figures must be seen against the backdrop of aTue, 28 Apr 2009 05:56:40 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-28.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-21.htmlBudget 2009 provides the highlight of a busy week in the UK, with the preliminary estimate of Q1 2009 GDP, the latest inflation and unemployment figures and the minutes of the April BoE MPC meeting also due. With the economic backdrop facing the UK much worse than anticipated by the Treasury at the time of the Pre- Budget Report in November, we expect sharp downgrades to GDP growth and public sector borrowing forecasts in Budget 2009 on Wednesday. Although the Chancellor is understandablyTue, 21 Apr 2009 06:57:54 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-21.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-15.htmlIt is a busy week for data in the US, which should provide some important clues about the pace of the overall economic contraction in the first quarter of 2009. First quarter corporate earnings releases will also be informative and are likely to influence equity markets this week. There will also be considerable interest in the latest inflation data, which may show annual US CPI inflation turned negative for the first time since 1955. A quiet week for data in the UK is headed by the RICS houseWed, 15 Apr 2009 06:40:54 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-15.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-07.htmlWith the G20 meeting and the ECB’s interest rate decision out the way, this week’s focus is on the BoE’s MPC meeting, on Thursday, and the minutes of the Fed’s 17/18 March meeting, published Wednesday. The G20 concluded with agreement to add another $1.1tn of cash to support the IMF in stabilising the world economy. But the ECB surprisingly delayed a full 0.5% interest cut, opting instead for a 0.25% reduction to 1.25% (another 0.25% cut is likely at the May meeting) and postponing buying ofTue, 07 Apr 2009 05:58:09 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-04-07.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-30.htmlNot only is the UK economy in recession but there are few signs that the situation is improving. Final estimates for Q4 2008 show that output fell by 1.6% in the quarter and was 2% lower than in the year before, the largest drop in output since 1980 Q2. In fact, economic data so far in Q1 2009 suggests that the downward momentum has gathered pace and that the fall in gdp in the current quarter is likely to be even larger than in Q4 2008. We look for gdp to contract by about 1¾% in the currentMon, 30 Mar 2009 12:47:02 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-30.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-24.htmlAn increasing number of central banks are directly expanding money supply… More and more central banks seem to be embarking on the process of injecting money directly into their economy through expansion of their balance sheets, or ‘quantitative easing’ in the modern jargon. Last month the Bank of England announced that it would buy £150bn of bonds, of which £100bn will be government securities. Last week, the Japanese central bank raised monthly purchases of government bonds to Y1.8tn and theTue, 24 Mar 2009 05:48:54 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-17.htmlAs the Bank of England embarks on a £150bn programme of buying securities from the private sector that will not be financed by an equivalent issue of government paper - so called quantitative easing – bond yields are falling around the world. This is perhaps partly because of a perception that others around the world may also join the UK central bank in purchasing government debt, although there is no convincing evidence yet to support such a view. Indeed, the most likely reason for what is aTue, 17 Mar 2009 06:01:52 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-17.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-10.htmlFor all of the focus there has been on the crisis in financial markets, the economic downturn has been led by the industrial sector. However, a substantial part of the reason for the decline in industrial output is a tightening of credit conditions – a direct result of the financial market crisis. But the key point is the downturn now underway is impacting countries which did not increase debt (leverage) excessively nor were involved directly in the credit markets that have now gone bad.Tue, 10 Mar 2009 07:47:37 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-10.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-03.htmlA busy week lies ahead for central bank events and economic data releases. Central banks in the UK, the euro zone, Canada and Australia are all forecast to cut interest rates this week in response to the weak economic backdrop and sharp falls in inflation. We expect the BoE and ECB to cut key rates by 0.50% to 0.50% and 1.50%, respectively. February surveys of manufacturing and services activity are due in the UK, the euro zone and the US and should offer some indication about the rate ofTue, 03 Mar 2009 06:08:11 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-03-03.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-02-24.htmlRevised estimates of GDP in the final quarter of 2008 for the US and UK are published this week, with both likely to lead to downward revisions to economic growth. The least uncertainty surrounds the US, which could show an annualised contraction of over 5% compared to a surprisingly ‘modest’ 3.8% decline in the preliminary estimate last month. In the UK, weaker than expected industrial output data suggest the economy contracted by 1.6% in Q4 2008 compared to 1.5% in the previous estimate. TheTue, 24 Feb 2009 06:05:31 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-02-24.htmlhttp://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-02-17.htmlThe transition from using interest rates as the sole monetary policy tool by the Bank of England to combat recession and the continuing dislocation in credit markets and to using other less conventional measures is now firmly underway. The final step will be for the Bank to directly boost money supply and it now has permission from the government, via the Treasury, to embark on a course to do just that. There have been some very clear signposts in the last few weeks and months, not least theTue, 17 Feb 2009 06:05:45 GMThttp://www.fxstreet.com/fundamental/analysis-reports/Sarah.Pedder@LLOYDSTSB.co.uk (Lloyds TSB Financial Markets)http://www.fxstreet.com/fundamental/analysis-reports/economics-weekly/2009-02-17.html