UK Incomes Fall by 3.5% in Real Terms
According to Annual Survey of Hours and Earnings from the Office for National Statistics, it is revealed that driven by a shift to part-time work as a result of high unemployment and low economic growth, households across the UK are facing pay cuts of more than 3.5% in real terms as salary increases fail to keep pace with inflation.
Official figures by ONS showed that the median salary for a full-time worker in the coutry rose by 1.4% in 2011 to £26,244, against a headline CPI inflation rate of 5% or higher. Overall earnings growth was even lower, with the average UK salary increasing by only 0.5% on 2010 levels with part-time workers included.
Eurozone Debt Crisis Live
British factory gate inflation has gradually slowed to the lowest annual rate ever since May. This become a rare piece of good news welcomed by the Bank of England, which is expecting consumer price inflation.
According to figures from the ONS, it is shown tha the producer output prices rose by 5.7% in October compared to the level in 2010. The figure is much less than originally expected. Meanwhile, the cost of raw materials climbed by an annual rate of 14.1%, which become the lowest rate in nearly a year. The slowdown should eventually feed through to consumer prices.
EU Reaches Deal on Greek Bonds
This morning, European leaders reached a deal with Greek debtholders at a summit of eurozone leaders that would see private investors take a 50% cut in the face value of their bonds. It is believed that this cut will reduce Greek debt levels to 120% of GDP by the end of the decade.
The agreement includes a new €130bn bail-out of Greece by the EU and the IMF.
Deutsche Bank Bolstered by ‘Classic Banking’
The quarterly profit of Germany’s biggest bank–Deutsche Bank just reported a €777m net income for the third quarter. This figure has beaten the market expectations after the bank offset a decline in trading revenues with a strong result in operation in its “classic banking” sector.
WTO Talks at the Crossroads
According to the Director-General of the WTO—Pascal Lamy, it is said that this year represent the “window of opportunity” for the Doha round of global trade talks. However, so far, it seems quite unlikely for the Doha round to reach a concrete resolution anytime soon.
Crisis Fear over UK Economy
As governor of BoE warned earlier this week, Britain might be facing the most serious financial crisis ever.
It is widely belived that the policymakers had learnt enough lessons from the Great Depression. It is expected that the bad days are over and won’t be seen again.
However, there is little double whether the governor’s statement really make sense, as it is quite ironical that his announcement followed a string of what passes for relatively optimistic reports from purchasing managers showing expansion in new orders.
Eurozone Crisis Freezes Dealmaking
In the past few weeks, due to the deepening in the Europe’s sovereign debt crisis, the market for private equity deals has been dried up with some transactions collapsing or being delayed.
According to private equity dealmakers, it is said that the market has deteriorated rapidly as banks are giving out less debt on much more expensive terms, while the price expectations of the sellers have refused to turn downwards.
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