As expected, the export channel doesn’t look to be able to save Europe this time around. That leaves only domestic demand and net public sector spending via ‘borrowing to spend’ to do the trick, which doesn’t look all that promising either.

U.K. Factory Index Falls More Than Forecast on Export Slump

By Scott Hamilton

May 1 (Bloomberg) — A U.K. factory index fell more than economists forecast in April and U.S. manufacturing probably slowed as the world economy stayed reliant on China to drive economic growth.

The gauge of British factory output dropped to 50.5 from 51.9 in March, London-based Markit Economics said today. The median forecast of 27 economists in a Bloomberg News survey was for a decline to 51.5. The Institute for Supply Management’s U.S. index probably eased to 53 last month from 53.4, according to the median of 77 forecasts. A Chinese purchasing managers’ index rose to 53.3 from 53.1. A level above 50 indicates growth.

5 Responses

  1. The UK’s net public sector spending doesn’t happen via ‘borrowing to spend’ does it?
    They are not in the ez. They are monetarily sovereign. They are like US , Japan etc. currency issuer.

      1. @WARREN MOSLER, Even if ‘self-constrained’ do they have any problem selling bonds? And, does it not look promising from the point of view of effectiveness or likelihood?

        In another area of interest to me … UK needs a new generation of nuclear power plants and is tying itself in knots trying to get the ‘private sector’ to finance them. I can’t think of a better investment (cheap electricity of 100 years) … the government should just build the f***ing thing. Now it looks like the Russian or Chinese governments may do it for them (not exactly ‘private’) … incredible.

      2. the UK has no problem selling it’s securities and I wouldn’t expect it to.
        when you’er out of paradigm all sorts of sub optimal things happen…

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