Now that the United Kingdom managed to avert a double-dip recession, the region”s sights are fixed firmly on the future. But what lies ahead for the country’s exchange traded fund (ETF) depends on how the region copes with lingering issues.
What’s good:
- According to the Organization for Economic Cooperation and Development (OECD), the U.K. economy will outperform its G7 rivals in the second quarter of this year, expanding at an annual rate of 3.1%, writes Medha Sood for TopNews. The British Chamber of Commerce has also stated that the economy has evaded a double-dip recession and is still on a path to recovery.
- Research group Markit Economics and the Chartered Institute of Purchasing Supply said the services Purchasing Managers Index receded to 56.5 in March from 58.4 in February, reports Ilona Billington for The Wall Street Journal. Any reading above 50 indicates an expansion and readings below 50 indicates a contraction.
- Service-sector growth in the first months of the year remains relatively unchanged year-over-year, but a number of jobs is being added in the sector. The data, however, won’t alter the current first quarter GDP forecasts.
The general election on May 6 will be an uphill battle for incumbent Labor Party leader British Prime Minister Gordon Brown against a favorable contender, Conservative Party leader David Cameron, comments Sheldon Filger for The Huffington Post. The big issue for this election will be the economy and the currently unsustainable government deficit of 13% of GDP. Brown used the last budget to go Robin Hood on taxes, lowering them for the poor and raising them for the rich in an attempt to lure votes from those most hurt in the recession.
For more information on the United Kingdom, visit our United Kingdom category.
- iShares MSCI United Kingdom (NYSEArca: EWU): 21.9% is financials; 20.5% is energy; and 14.9% is consumer staples.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.