The UK housing market has presented a confusing picture over the past 2 years. Unlike Spain, Ireland, or the USA, the lax lending conditions of the Boom years did not seem to lead to major price falls. In fact, along with Australia (benefiting from China’s commodity boom), UK prices even appeared to recover. This was […]
Tag Archives | Bank of England
The Bank of England has become the first major central bank to endorse the argument that we are moving towards a ‘New Normal’. In an important speech this week, its Governor Mervyn King, set out the argument that we can look forward to: “a SOBER decade – a decade of Savings, Orderly Budgets, and Equitable […]
Anyone running a chemical company knows that the benefits of certain key decisions can take years to develop. Many companies had to support their nascent pharma businesses for 20 years, before steady profits began to flow. Whilst major complexes can easily take 10 years from inception to completion. Yet in recent years, investors have become […]
The blog has been revisiting the Bank of England’s 2008 analysis of the likely impact of the financial Crisis. This reviewed 33 banking crises between 1977-2002 and found that: • The average length of each crisis was 4.3 years • The median loss of GDP was 7.1% • Major crises (such as today’s) caused GDP […]
INEOS CEO Jim Ratcliffe has told the Sunday Times that the UK government “refused financial help” last year, when sales collapsed. He revealed that: • The company had approached the UK government for help with liquidity, including deferral of VAT (sales tax) payments, but “got absolutely nowhere“. • Ratcliffe had even found it “quite difficult […]
“Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.” Bank of England Governor, Mervyn King, proposing that banks should be split up. He argues that high-risk trading activities should be split off from low-risk utility […]
When the G-20 met last April, it issued a Communiqué containing just 688 words. Its Pittsburgh meeting over the weekend produced a Leader’s Statement containing 9292 words. “More” does generally not mean “better” when it comes to writing action plans. Instead, the document simply seems to be a catch-all of comments from the 20 leaders. […]
Coincidentally, both the US Federal Reserve and the Bank of England yesterday signalled the probable end of the ‘the recession’ yesterday. But as the blog noted last month, statistics don’t tell the whole story. The issue is that economists usually define recession as simply being 2 or more quarters of negative growth. Automatically, therefore, any […]
Destocking is currently a key issue for the chemical industry. The above chart, from Andrew Sentance of the Bank of England, provides some useful clues as to where we are in the cycle. It shows current performance (the green line) versus the history of stock levels in the recessions of the early 1980′s (blue) and […]
Prof David Blanchflower, of the Bank of England, is not optimistic that the current recession will end soon. He notes that “few macro-economists actually spotted the greatest financial crisis in a hundred years”. And in the chart above, showing OECD forecasts for the UK economy during the last recession, he demonstrates that forecasters kept predicting […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.