Author Archives: Edward Hugh

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

London Update

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Just following on from David, there is in fact a lot of blog activity. Tim Worstall is live blogging. John – shot from both sides – had to walk to work, Alex, the Yorskshire ranter can see things from his office window, Perfect.co.uk is also following things closely etc, etc.

As I said in comments, there seem to have been six bombs, five in tube stations and one on a bus. The Police are saying that incidents were reported at the Aldgate station near the Liverpool Street railway terminal, Edgware Road and King’s Cross in north London, Old Street in the financial district, Tavistock Square, and the bus in Russell Square in central London, near the British Museum.

Blair has said he is going down to London in the afternoon, but that the Gleneagles meeting will continue. The atmosphere will obviously be one of solidarity. This is aimed at the UK, but it is also a symbolic message to the entire G8.

There is no serious speculation yet about who this might be. This piece by Reuter’s security correspondant Mark Trevelyan is a reasonable rundown on the things which immediately appear to stand out.

Financial markets have, understandably, taken it badly, although I don’t imagine this will prove to be long lasting.

The UK authorities are understandably being very careful about handling information about casualties. They don’t want panic, and they don’t want useless speculation.

They also want to be able to inform as many next of kin as possible before releasing data, which I think is admirable.

The total number of dead, mercifully, may not be very large. There are though a considerable number of very seriously wounded.

Updated 13:00 UK time

Neil Mackintosh at the Guardian Blog reports that:

“A packed House of Commons is hearing a statement from Charles Clarke, the Home Secretary. He expresses sympathy to friends and family of those who had died, and says four explosions are confirmed. One on a tube train between Aldgate and Liverpool Street, one on a bus, one in the tube at King?s Cross. Tube.

The underground will remain closed for today at least. There are no buses operating in central London, with decision to reopen to be made later today. People are strongly advised not to travel into central London, with many mainline train companies cancelling services or terminating before the capital.”

Updated 13:30 UK Time
The number of actual explosions seems to have been confirmed at 4. This does not mean there were no more devices which did not go off.

Britain’s Home Secretary Charles Clarke said there were three explosions in the subway and one on a bus. “We do not know who or what organizations are responsible for these terrible criminal acts,” Clarke said.

A summary of the impact of the explosions can be found here.

More Evidence Of UK Slowdown

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The UK National Institute of Economic and Social Research suggest in a report published today that the U.K. economy may have grown at the slowest pace in almost four years in the second quarter.

Growth was probably 0.3 percent in three months through June, compared with 0.4 percent in the first quarter, the London-based institute, whose clients include the U.K. Treasury and the Bank of England, said in an e-mailed statement. That’s the slowest pace since the third quarter of 2001, according to government figures.

U.K. economic growth in the first quarter lagged expansion in the euro area for the first time in more than four years as manufacturing production shrank and consumer spending stalled, the government said on June 30. NIESR said the Bank of England, which meets today, should lower its benchmark interest rate from 4.75 percent, the highest in the Group of Seven Industrialized Nations.

The BoE which meets today is not expected to lower rates – although this move is not entirely excluded. Most likely a reduction will be in the offing soon.

The European Superstate?

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You most probably have noticed that prominent blogad we have at the top of the sidebar, promoting a book by Glyn Morgan: The idea of a European Superstate. Well the US-based Chronicle of Higher Education have a review of the book, and, whatsmore, tomorrow, Thursday 7th July at 1 pm Eastern time (8pm CET and 7pm in the UK) the author will be available for a live online debate about the issues raised in the book. So whether you agree, or disagree with him, venez nombreux!

And just to warm things up a bit, after reading the Chronicle of Higher Education article my own view is that it will prove a lot easier to get a ‘one size fits all’ foreign policy than it ever will be to get a common monetary one. (Glyn Morgan is quoted as saying “The nightmare scenario is that the euro fails”).

Eurozone Outlook

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There is a pretty mixed bag of numbers coming in at the moment. The German economy shows some signs of a recovery of activity (here), as is the French one (here). It is important to understand however that trend growth in Germany is now extremely low, and the economy is very export dependent. The underlying performance of the Frech economy is essentially much better. However, the sick man of Europe continues (and will continue) to be Italy (here)

Levels of business activity in the Italian services economy continued to fall in June. However, rising from 47.3 in May to 48.9, the seasonally adjusted NTC Research/ADACI Business Activity Index indicated that the rate of contraction had eased and was only marginal.

A month-on-month decline in new business to Italian service providers was recorded for the third successive month. Furthermore, the rate of decline quickened again and was the sharpest in the survey history. Panel companies reported that demand for their services had continued to suffer as a depressed domestic economy led to subdued client spending.

Service providers reported that diminishing levels of new business had freed up capacity, leading to the sharpest reduction in backlogs of outstanding work in the seven-and-a-half years that data have been collected.

Employment levels in the Italian service sector fell for the fourth straight month in June. The rate of job shedding was again only marginal, although slightly sharper than in May.
Source NTCResearch

The ‘Eastern’ Alliance

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An alliance of Russia, China and central Asian nations called today for the U.S. and coalition members in Afghanistan to set a date for withdrawing from member states.

he Shanghai Cooperation Organization, at a summit in the Kazakh capital, said in a declaration that a withdrawal date should be set in light of what it said was a decline of active fighting in Afghanistan.

“We support and will support the international coalition which is carrying out an anti-terror campaign in Afghanistan, and we have taken note of the progress made in the effort to stabilize the situation,” the declaration said.

“As the active military phase in the anti-terror operation in Afghanistan is nearing completion, the SCO would like the coalition’s members to decide on the deadline for the use of the temporary infrastructure and for their military contingents’ presence in those countries,” the declaration continues.

Now what was it Brad Setser was saying about why the Unocal bid was important?

The EU’s Latest Export

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Mala leche (nothing to do with the CAP) we would probably call it here in Spain, bad blood (again not connected with mad cows) might be the English expression. We’re all off to Singapore apparently, and the fair ground side-show seems to be up and running. On this one I’m impartial, I’m being very pc and rooting for Madrid. Results known tomorrow.

“I think the Paris stadium is a wonderful stadium. I really like going there to watch rugby but unfortunately rugby is not part of the Olympics”

“I think that to deserve victory you have to respect the Olympic spirit and demonstrate fair play…..One good thing about the Stade de France is that it exists”

“The only thing they have done for European agriculture is ‘mad cow (disease)…”You can’t trust people who have such lousy cooking” labelling British cooking the worst in Europe apart from that of Finland. (No, this wasn’t Berlusconi :)).

Paris is the bookies’ favourite at 4-9 right now.

Under Wraps

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The EU Observer reports on the labours of the Commission in producing a report on social models and sustainability, and the efforts they are making to try and de-politicise it. It seems our ageing societies and their implications will form the cornerstone of the report. This, at least, will mark a step forward. The October summit already bears all the hallmarks of being potentially much more interesting than the last one.

“The request for the report predates the [Franco-British] argument. This is the general awareness in the commission”, one of the study’s contributors told EUobserver. “Nothing new was stimulated by this disagreement. Whether you are on one side or another, everybody wants a viable social system”.

The source added that while the US has already done a lot of research on the problems linked with an ageing population for example, the EU situation is made more difficult by the fact that “we have 25 different systems” to take into account.

The report will be put together by a wide pool of officials from various units covering financial affairs, enterprise, employment and internal markets, as well as commission president Jose Manuel Barroso’s inhouse team of economic experts, the Bureau of European Policy Advisors (BEPA).“

British Retail Sales Continue to Decline

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The latest survey by the British Retail Consortium suggests that retail sales declined in the UK for the third month in a row in June. This is definitely one to watch carefully.

Sales in stores open at least a year fell 0.5 percent compared with June 2004, the London-based lobby group said today. The drop followed a 2.4 percent slide in May and a 4.7 percent drop in April. Same-store sales declined 2.4 percent in the three months through June from a year earlier.

Iraq: British Withdrawal Imminent?

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Two pieces of news on the Iraq front today. The British MOD are reported to be preparing “significant withdrawal of British troops from Iraq over the next 18 months”. In an entirely different context, Ibrahim Youssef al-Shammari has announced that he will act as spokesman for two insurgent groups: the Islamic Army in Iraq and the Army of the Mujahideen.