UK Service Sector Grew in December
The service sector in the United Kingdom increased its activity during the month of December. Analysts recorded that the fastest rate of growth was during the last month of the year compared to the figures in July and is shown in the most recent purchasing managers’ index or PMI. The PMI for the month of December was at 54.0, a slight increase from 52.1 recorded in November. Any figure that is above 50 shows increase in the sector’s growth. There was clearly growth in the service sector and analysts attribute it to new orders from Germany, China, and the eastern European region. However, confidence about the performance of the service sector in 2012 is still abound due to the expectations that people have formed due to the figures in September that showed its lowest rate of growth in 2.5 years.
Tax Changes to Affect Families with Children
Families in the UK that have three or more children will feel the effects of the changes in tax and benefits that are set to reduce the deficit, according to a report revealed by the Family and Parenting Institute. The organization says that the average income of families with children will decrease by 4.2 percent between 2010 and 2016 with an average equivalent of £1,250 annually. The household income per year will decrease by 0.9 percent or £215 annually. According to the UK government, they are putting up the right measures and “practical steps” in order to assist in this loss such as decreasing fuel duty and income tax. The report published by the Family and Parenting Institute included calculations made by the Institute for Fiscal Studies. It included predictions in the decline of income for the years that were mentioned and are attributed to the tax and benefit changes, as well as declining incomes.
World Stock Markets Close a Difficult 2011
The UK FTSE 100 was down by 5.6 percent in the past year. France and Germany experienced a decline in stocks by 18 percent and 15 percent respectively. Countries in the eurozone have increasing fears in the coming year due to the economic slowdown in the past year. The euro was almost near to its 15 month low compared to the dollar as 2011 ended and markets are preparing to usher in 2012. The eurozone economic crisis affected not only the major countries within the region but also the rest of the world. The United Kingdom government has accepted the fact that it may take a while before the whole region will be able to regain its former economic vigor and be as dynamic as before, including its own economy. The UK FTSE 100 index may be lower this year as it declined from 5,899.94 to 5,572.28. This is a big contrast to the previous years wherein there was a 9 percent increase in the economy back in 2010 and an increase in the value of stocks by 22 percent in 2009.
Economists Warn Return of Recession to Europe
Most of the top economists that were surveyed by the BBC have a firm belief that recession will again hit Europe by the year 2012. Twenty percent of them said that the European Union will cease to carry on with its 17 members as recession creeps in while the majority of them said that there can be a EU break up at 30 percent to 40 percent. According to the BBC survey, there are also more economists who feel that the UK interest will still be at 0.5 percent for the whole year of 2012.
