There’s a flurry of banking news this morning too.
Royal Bank of Scotland, which is majority-owned by the UK taxpayer, has posted its first quarterly profit since 2015. It made £259m in the three months to March, beating forecasts.
Barclays has announced plans to hire 2,000 extra staff over the next few years, as part of a new push into technology. Can Fintech help to replace City jobs lost due to Brexit?
And not to be outdone, the government has cut its stake in Lloyds Banking Group to just 0.89% – more than eight years after taxpayers bailing it out.
UK house price growth hits four-year low
We’ve just learned that the slowdown in Britain’s housing market is gathering pace — another sign that the economy may be losing momentum.
Nationwide has reported that prices FELL in April for the second month running (on a seasonally adjusted basis). And on an annual basis, prices only rose by 2.6% – the slowest rate of increase since June 2013.
Robert Gardner, Nationwide’s Chief Economist, says it may be due to rising inflation, which is driving down real incomes.
Also, prices may simply have risen too high, Gardner adds:
“There may also be more fundamental reasons for the slowdown. House price growth has been outstripping earnings growth for a sustained period of time, steadily eroding affordability on a number of metrics. For example, the typical house price is currently 6.1 times average earnings, well above the long run average of 4.3 times earnings, and close to the all-time high of 6.4 times recorded in 2007.
France’s economy was dragged back by disappointing trade figures (because exports fell while imports rose).
This breakdown of the GDP figures shows how net trade (commerce exterieur) was negative for growth.
Foreign trade weighs on growth
Exports decreased in the first quarter of 2017 (-0.7% after + 1.4%), particularly in transport equipment. At the same time, imports accelerated (+ 1.5% after + 0.8%). In particular, purchases of refined petroleum products are rebounding and those of other industrial products are growing more vigorously. Overall, foreign trade weighed on growth, at -0.7 point, after a contribution of +0.2 point the previous quarter.
Bert Colijn, senior colleague at ING Bank, says the French growth figures are a disappointment:
Fred Ducrozet of Swiss bank Pictet agrees, but is encouraged that French businesses are investing more in new equipment and buildings.
French GDP disappoints with 0.3% growth
Breaking: France’s economy grew slower than expected in the first three months of this year.
French GDP expanded by just 0.3%, missing the 0.4% which economists had predicted.
It’s not all bad news, though – INSEE, the stats body, has revised growth in the last quarter of 2016 up to 0.5%, from 0.4%.
French consumers dragged growth back; household spending slowed to just 0.1%.
Business investment jumped, though, to +0.9% from 0.6% — an encouraging sign.
But…exports fell sharply (-0.7% from + 1.4%) while imports accelerated (+ 1.5% from +0.8%).
The agenda: A bonanza of growth figures
We’re about to get a deluge of economic data that will show how some of the world’s largest economies have performed in 2017.
Growth figures from Britain, America, France and Spain are all being released over the next seven hours. And for different reasons, they should all be fascinating.
Britain’s GDP report will be pored over for signs that Brexit is hurting the economy. Economists expect growth to have slowed in January-March to around 0.4% to 0.5%, down from 0.7% in October-December 2016.
France’s figures will highlight the scale of the challenge facing either Emmanuel Macron or Marine Le Pen.
Spain’s data will show whether the eurozone’s battered periphery is still recovering….
And America’s growth figures are the first school report since Donald Trump became US president. And the bad news is that economists predict a slowdown, as consumers cut back.
Here’s the timings:
- France: Just released
- Spain: 8am BST
- UK: 9.30am BST
- United States: 1.30pm BST
It’s also going to be a busy morning in the banking sector, with Barclays and Royal Bank of Scotland reporting results…