UK: Deloitte Monday Briefing: Some Good News

Last Updated: 11 February 2013
Article by Ian Stewart

Most Read Contributor in UK, August 2017

The Monday Briefing, written by Ian Stewart, Deloitte's Chief Economist in the UK, gives a personal view on topical financial and economic issues.

  • Much media comment about the general state of the country and the economy tends to be negative. In recent weeks we have noticed a series of new data releases that show that some things are going right. So, as an antidote to the view that everything is getting worse, here are twelve items of good news for the UK.
    1. Drug abuse is declining. The proportion of 16-59 year olds who had taken drugs in the year 2011/12 in England and Wales fell to 8.9%, the lowest level since records began in 1996. There have been suggestions that this is part of a long-term trend of drug use simply falling out of fashion.
    2. Roads are becoming safer. The number of people killed on Britain's roads has dropped by 45 percent in the last 10 years. This is a continuation of a downtrend that has been underway since the late 1960s. The peak year for road deaths was 1941 when 9169 people died on Britain's roads. In 2011, 1901 people died on the roads. This trend has coincided with a reduction in the proportion of cars breaking the speed limit over the last decade, with a fall of more than a quarter in the number of drivers breaking the 30mph limit between 2001 and 2011.
    3. Job satisfaction has risen. A study by the Workplace Employment Relations Study showed that job satisfaction among UK employees rose between 2004 and 2011, despite growing pressure on pay, a perception of diminishing job security and employees saying that they have to work harder. The report found that high levels of job satisfaction reflected a great sense of autonomy and control, better training and a heightened sense of achievement at work.
    4. The chance of being murdered in England and Wales has fallen to the lowest level since 1978. 549 homicides, including murder, infanticide and manslaughter, were committed in the year to September 2012, around half the level 10 years earlier.
    5. The level of vandalism has fallen by 38% since the start of the Global Financial Crisis in 2007. Some argue that the decline in graffiti and vandalism reflects the prevalence of smartphones that provide an alternative outlet for teenage energies. Falling crime rates do not reflect a shift to an older population. On the contrary, the population of those aged 15 - the peak age of offending – has been rising.
    6. Teenage pregnancies have fallen. In 2010 the pregnancy rate among under-18s fell at the fastest rate since the mid '70s taking the pregnancy rate to the lowest level since 1969.
    7. The UK has moved up the global competitiveness league table. In the World Economic Forum's 2012/13 competitiveness ranking the UK rated 8th out of 142 countries. This is rise of two places in a year and puts the UK just behind the US and ahead of a number of countries, including Hong Kong, Canada, Norway and Denmark that are considered to be highly competitive. Switzerland comes top in the WEF ranking.
    8. The divorce rate is declining. Between 2009 and 2011 the divorce rate in England and Wales fell to the lowest level in 34 years.
    9. Smoking is continuing to decline. In 2010 21% of the adult population smoked, the lowest rate since records began in 1948.
    10. Men and women born today can expect to live significantly longer than those in previous generations. Over the last 50 years (1960-2010) the average life span increased by around 10 years for males and 8 years for females. Data show that mortalities from one of the country's biggest killers – heart attacks – have halved since 2002. Remarkably, the Office for National Statistics (ONS) have projected that one-third of babies born in the UK in 2012 can expect to survive their 100th birthday, with 455,000 centenarians forecast by 2060.
    11. A significant shift in the attitudes of young people to drink and drugs appears to be underway. In a survey of 6500 children in England aged 11 to 15, the proportion that admitted to having taken drugs fell from 29% in 2011 to 17% in 2011. Regular smokers of at least one cigarette a week halved from one in ten to one in twenty. The number who said they had drunk alcohol in the past week was down from 26% to 12%.
    12. The economy may be weak but employment has confounded economists' forecasts and risen to record levels. Job creation in the private sector has more than offset job losses in the public sector. Data from the ONS shows that in the three months to October 2012 the number of people in employment rose to 29.6 million, the highest on record.

MARKETS & NEWS

UK's FTSE 100 ended the week down 1.3%.

Here are some recent news stories that caught our eye as reflecting key economic themes:

KEY THEMES

  • China reported a stronger-than-expected 25% annual rise in exports in January and a 28.8% rise in imports – China
  • Germany recorded a €188bn trade surplus for 2012; it's highest in over 60 years, due to weaker-than-expected imports and strong exports – Germany
  • UK retail sales grew by 1.9% annually in January, the fastest pace of growth for 13 months, according to data from the British Retail Consortium and KPMG Retail Sales Monitor – UK retail
  • Eurozone business activity rose to a 10-month high in January, according to Purchasing Managers' data from Markit – Eurozone
  • The European Central Bank (ECB) saw its balance sheet fall to €2.77tn in the week ending Feb 1st, its lowest level since February 2012, as euro area banks began to repay emergency loans – eurozone banking
  • Lord Turner, the outgoing chairman of Financial Services Authority, defended the policy of quantitative easing, claiming that it "absolutely, definitively [does] not" cause inflation – QE
  • The Irish government completed a deal to restructure €64bn of banking debt with the European Central bank (ECB), reducing the burden of debt on Irish taxpayers by increasing debt maturity and reducing rates of interest on the debt – Ireland
  • ECB president Mario Draghi claimed that "the economic weakness in the euro area is expected to prevail in the early part of 2013" before improving later in the year – eurozone crisis
  • Ratings agency announced a 66% rise in year-on-year profits for Q4 2012, with revenues rising 33% due to rising debt issues – ratings agencies
  • The US government began civil legal proceedings against ratings agency Standard & Poor's over mortgage-bond ratings, the first federal action against a credit ratings agency over alleged illegal behaviour linked to the financial crisis – ratings agencies
  • The price of a barrel of Brent crude oil rose to over $118, its highest level since May 2012, driven by strong Chinese demand, lower Opec supplies and worries about instability in North Africa – oil
  • Housing in London's 10 most expensive boroughs are now worth as much as the property markets of Wales, Scotland and Northern Ireland combined, according to property consultants Savills – housing
  • The New York Times announced a 13% quarter-on-quarter increase in online subscribers in Q4 2012, with subscriptions beating advertising revenues for the first time in the newspapers history – digital revolution
  • The US Postal Service announced plans to end Saturday delivery of first-class mail by August 2013, in an effort to save around $2bn a year in costs – austerity America
  • The International Monetary Fund (IMF) announced a censure of Argentina for failing to supply accurate economic data, the first time such action has been taken against an IMF member – data validity
  • The Royal Canadian Mint withdrew the Canadian penny from circulation, advising shop owners to round out prices to the nearest nickel for cash transactions, because production costs have exceeded its monetary value – inflation
  • Dijon, the capital city of Burgundy, has sold off half of its famed municipal wine cellar for €151,620 to help fund a shortfall in local social spending, including a bottle of 1999 Vosne-Romanée Cros Parantoux for a knock-down price of €4,800 to a Chinese buyer – in the red

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