At present businesses and economies in Manchester and the North West are having to react and adapt to a economic outlook which offers low growth and a higher level of inflation. One in which incomes are squeezed by higher food, energy and utility prices putting real incomes under pressure for the foreseeable future.
A government policy aimed at rebalancing the economy involving the march of the makers, rebuilding the workshop of the world is a novel trope. The desire to rebalance the economy and an external deficit which has been out of synch since The Treaty of Versailles and beyond, is misplaced.
A monetary policy, which undermines the exchange rate, leads to a depreciation of Sterling and generates price inflation compounds the problem, more QE will compound the problem. The private sector has to accept the challenge, of policy priorities misplaced.
The May figures are not that bad but we have to be realistic. There is no real march of the makers set to rebalance the economy. Manufacturing has recovered by just 7.7% from the low in August 2009. It is still down by 9% from the peak in February 2008. It is more of a regrouping than a march, a recovery of sorts but still a long way off the top. Like falling off a cliff and waking from a coma. There is still much to be done to get back to where we were.
The MPC are beginning to look like a bunch of economists huddled in a storm shelter in Kansas hoping the tornado will pass by. It really is time to face the storm. In 2008, oil prices were driven higher by speculative trading and large derivative positions. The subsequent fall, reflected the closing of short positions pushing oil underground to $40 a barrel. The trend is for higher and higher prices as the high growth nations and China in particular places great demands on finite resources. Gapology is dead and monetary policy needs to reflect that. The increase in output prices to almost 6% with a trend output gap of the same dimension should be adequate evidence.
It is estimated that already over 20% of China’s reserves are in the Euro. China has built the longest bridge in the world, not the Qingdao bridge, [pictured] but the financial bridge from Beijing to Berlin. China needs a strong Euro to delay the day when the renmimbi will rule. Hence the offer from Chinese premier Wen Jiabao to buy Euro bonds and landmarks in Greece. Parthenon not the Pound. The strength of the Euro is a challenge to holiday makers, but it is the weakness of the dollar which is the challenge to policy makers. It is the strength of the Asian economies and China specifically that pose the real policy dilemma for the UK. A sterling recovery may take longer than we think.
An extract from China – Return of the Middle Kingdom – The impact of China on the world economy. John Ashcroft 2011.
How big is the Greater Manchester twitter population? A better site for purpose is http://followerwonk.com. A search for Manchester produces a return of over 60,000 twitter users (60,609). This compares well with Liverpool (28,978), Glasgow, (27,808), Leeds (23,457), Bristol (22,636) and Edinburgh (19,241). Manchester is clearly the Twitter capital outside of London. [London has 369,033 users].
GM Tweetmap Manchester airport remains in top slot with nineteen thousand followers but Mancunians obviously love a gossip and @McrGossip is in second place with over fourteen thousand followers. Visit Manchester, Manchester Biz and the Cornerhouse push into the top five. Most prolific twitterers are Inside the M60, Manchester Chimp and the MEN business magazine closely followed by Manchester Airport and espionage Manchester.
As a chief exec of a large organisation, the one message from the front line we used to dread was “Things going well send more money.” The dot.com boom has been and gone but the “burn rate” is back. The value is in the database of 100 million plus subscribers which should be achieved this year. The issue is the sustainability of the model once the cost of acquisition or transaction is trimmed. The average subscriber revenue in 2010 was $14.10 and in the first quarter of 2011 was $7.75. The acquisition and marketing cost per subscriber was $8.64 in 2010 and $4.83 in the first three months of 2011.
My Apple crashed last week. Yes there is something wrong,” says the genius, “no, we don’t know what it is” he asserts. The solution to reset the machine to year zero and wipe all existing apps, folders and documents from memory. It’s a bit like suffering from amnesia and being offered a lobotomy. It hurts and requires substantial recovery.
Five hundred people attended the sell out pro.manchester Annual Dinner on Wednesday John Culshaw was the guest speaker and entertained members and guests for over forty minutes.It was great fun to be the MC for the evening, JC even did an impersonation of me, which everyone in the room thought was highly amusing. Chris Barry and Michael Taylor seemed to think this was one of his best impressions and twittered to that effect. “Highlight was John Culshaw doing more than a passable impersonation of John Ashcroft” said Chris Barry, “his jkaonline was the
best said Michael Taylor”. Didn’t quite see it myself but did laugh!
Mervyn King completes his second term of office in June 2013. Will inflation be on track by the end of the second term? It could be a close run thing?