UK gets reassuring news on deficit

Retail sales showed growth at a faster than expected pace to September, and a research poll released yesterday shows that UK retail sales can expect momentum to keep building as Christmas approaches.
 
Food, drink, clothing and grocery sales were the biggest surges, and expectations are that these industries will remaining positive for the foreseeable future.
 
Today (30 September) the UK’s gross domestic product figures were published. On the whole, data looks encouraging. There’s been a 0.8% (£2.3 billion) rise in second quarter household spending and a 0.5% growth in GDP per head.
 
Overall, the UK’s scarily wide current account deficit is starting to close but is still – in the words of one commentator – “pretty massive” at £16.8 billion. The UK’s economy is now 5.9% larger than it was before the global financial crash.
 
Keep the cork in the Champagne for a bit longer, though: The Office for National Statistics has made a slight downward tweak to the UK’s growth estimate, and now believes the economy expanded 2.9% (rather than by 3%).
 
Euro-a-go-go
 
Eurozone economic confidence was at a four-year high (since June 2011), according to data released on Tuesday (29 September). The much-relied-upon indicator reached 105.6 points for September against August’s 104.1. The good news stories for the Eurozone were Italy, France and Holland, where increases were largest.
 
Today’s story from Germany is less cheering: Unemployment figures revealed a surprise spike, with 2,000 more people registered as jobless this month when predictions were for a drop of 5,000.
 
The Eurozone has once again entered negative inflation, though this won’t scare the markets too much as this is primarily as the result of cheaper oil. Negative inflation is, however, likely to push the European Central Bank into expanding its quantitative easing programme.  
 
India cuts rates (again)
 
For the fourth time since January, the Reserve Bank of India has cut interest rates – this time to 6.75, and more than the drop to 7% which some were expecting. Growth has been a worry in India, and the RBI believes further cuts were necessary. Some say that that inflation levels in August at 3.6% (five-year lows) were a key factor in the latest decision.