FT Alphaville


Pounded pound

That’s from Deutsche’s Alan Ruskin and it ain’t pretty. Said Ruskin:

A quick scan pretty much shows the UK underperforming relative to most countries on almost every category, and even the few better performing categories are either because strong imports are ambiguous (could signal better domestic demand, but also increased import penetration and a deteriorating trade balance), while the narrow basic balance improvement was only because 2007 was so poor.   That the UK wins both the weakest growth, and highest cumulative inflation story, with a deterioration in the C/A, and the worst productivity numbers, merely affirms why the Moody’s ratings downgrade was not a surprise.    Japan stands-out next for its weak performance, notably its manufacturing output and related export performance.  At the other end of the spectrum, Switzerland looks relatively strong (particularly in relation to the EUR area) as does Australia.  Of course past performance, comes with all the caveats about not necessarily being a predictor of future performance, especially if it reflects increased imbalances.   For example Canada on the surface looks OK, but this fails to capture housing related concerns (see chart from IMF below), while the US data is in mid-pack, but fails to take into account the deleveraging that has already taken place, outside the important public sector.

And we haven’t even mentioned the BoE.