Welcome to the web site of Economic Research
Eco Focus is an aperiodic publication providing up-to-the-minute analysis of a current topic.
In his general policy statement, the Prime Minister presented the main outlines of his economic programme. He confirmed and emphasised the priority given to reducing production costs for businesses. New support measures for businesses will be added to the CICE competitiveness and employment tax credit and the Responsibility Pact, including tax reductions. The purchasing power of low-income households is also to receive support. Reductions in payroll taxes have been announced.
The ECB defeated our (out-of-consensus) forecast of a rate cut today, choosing not to react to the latest drop in inflation. At the same time, the tone of the press conference was very dovish, with the Governing Council "unanimous in its commitment to using also unconventional instruments in order to cope with risks of too prolonged period of low inflation", including via negative rates, liquidity measures or QE.
Historically, domestic demand, especially household consumption, tends to lead recoveries in the UK. Net trade tends to be a muted contributor, making a major contribution only after exchange rate depreciations. The recent recovery does not escape key historical patterns. It has been driven to a major extent by consumer spending while net trade has been weak. Dwellings investment accounted for around one-tenth of growth last year – higher than its share in the level of output.
The recovery is under way in Spain, even if fundamentals remain fragile. GDP is expected to progress by 0.9% in 2014, boasted by a strong carryover effect from end 2013. Survey data has been encouraging since the beginning of the year. The drag from fiscal adjustment and bank sector restructuring will be much less pronounced in 2014.
Weekly, monthly, quarterly, aperiodic... all the economic information at your own pace!