After the release of manufacturing data in the euro zone and U.K. earlier this week, today eyes are on services, the largest sector in most European economies, to appraise the performance of the expected growth forecasts in the second quarter.
In the euro zone manufacturing sector's expansion slowed down as it came in at 55.8 in May from 57.6 in April, while German manufacturing inched up to 58.4 in May from 58.3.
PMI services for May final reading is expected to remain at 56.0 and 53.7 in the euro area and Germany respectively. Also, PMI composite for the euro zone is predicted to linger at 56.2.
Following the remarkable improvement in these leading sectors, after contracting during the recession, the pace of progress stared to ease amid the debt woes and rising unemployment in the euro area.
Trichet said previously that recovery will be gradual is estimated to be sluggish this year, where the economy will weigh upon sales overseas to boost growth, taking advantage of the euro's depreciation against the dollar.
EU officials introduced $1 trillion bailout package to highly indebted countries, more specifically Portugal, Spain, and Italy. In addition, Greece announced yesterday that it is planning to sell stakes in public-owned assets to trim the massive sovereign debt that reached 13.6% of GDP last year. As a result of the debt crisis in the euro area, economic confidence plummeted in May to 98.4 from 100.6, and German business confidence plunged in April.
On the other hand, unemployment in the euro zone inclined to 10.1% in April from 10.0%, the highest in 12 years, led by Spain with 20%. Despite the better-than estimated earnings announced in the first quarter, many companies are still lying off workers to cut costs.
The latest ECB anticipations are referring that the economy will grow 0.8% in 2010, ensuring that the economy will expand at a “moderate” pace and recovery will remain “uneven.”
Moving to the U.K., manufacturing climbed to 58.4 in May, to remain at the highest level in more than 15 years. Recent data has showed that the economy is showing progress; construction surged to 58.5 from 58.2, while today services is estimated to resume expansion to 55.7 in May from 55.3.
However, some analysts expect David Cameron's 6.2 billion pounds spending-cut plan will hurt household's income. Thus, the BoE is keeping interest rate low at 0.50% and leaving APF unchanged at 200 billion pounds to spur recovery.
In addition, the economy is benefiting from the pound's depreciation as it fell to low of 1.4229 in May against the dollar from the month's opening at 1.5334 which is expected to give a lift to exports.
OECD mentioned that the most difficult exam to global economies in the coming period is going to be cutting deficit without hurting growth especially as recovery is still fragile and needs further support from governments and central banks.
Source
Monday, June 28, 2010
Tuesday, June 15, 2010
UK construction sector expands further as mortgage approvals beat estimates
Today the attention is on the UK data which showed that the construction sector beat estimates which hinted the housing sector is improving further as mortgage approvals mark the highest in four months as the weather is heating up in Britain.
PMI construction, which represents nearly 6% of GDP in May climbed to 58.5 from 58.2, surpassing the projected 58.0. The construction sector resumed its expansion which hints that the housing sector is reviving.
It is not just the construction sector that has been showing enhancement, but the manufacturing sector yesterday we witnessed continue to expand while surpassing market expectations.
More news from today, mortgage approvals in April inclined to 49.9 thousand from the revised prior reading of 49.0 from 48.9 thousand which beat the estimated 49.5 thousand.
As the weather is improving and ending the harshest weather since 1979 alongside the transaction cost taxes on houses ending for first-time buyers, helped increase demand on houses, which at the end supported the housing sector.
Hometrack Ltd. which are property researchers, said that the new plan by Prime Minister David Cameron to cut spending by 6.2 billion pounds will hurt household's income and negatively affect housing activity.
For more news today, net consumer credit dor April fell 0.1 billion pounds from the revised previous 0.1 from 0.3 billion pounds while net lending secured on dwellings rose to 0.5 billion pounds from the revised prior of 0.2 from 0.3 billion pounds.
As the BoE continues to leave interest rates low at 0.50%, banks are holding back lending as a way to restructure their balance sheets after the worst financial crisis since the Great Depression had weighed on the strength of the nation heavily.
Officials are not worried about the housing sector as much as they are worried about the debt crisis in the nation, as they have the highest budget deficit since WWII, which is why officials are working around the clock to contain the debt before it threatens the economic recovery even further.
Source
PMI construction, which represents nearly 6% of GDP in May climbed to 58.5 from 58.2, surpassing the projected 58.0. The construction sector resumed its expansion which hints that the housing sector is reviving.
It is not just the construction sector that has been showing enhancement, but the manufacturing sector yesterday we witnessed continue to expand while surpassing market expectations.
More news from today, mortgage approvals in April inclined to 49.9 thousand from the revised prior reading of 49.0 from 48.9 thousand which beat the estimated 49.5 thousand.
As the weather is improving and ending the harshest weather since 1979 alongside the transaction cost taxes on houses ending for first-time buyers, helped increase demand on houses, which at the end supported the housing sector.
Hometrack Ltd. which are property researchers, said that the new plan by Prime Minister David Cameron to cut spending by 6.2 billion pounds will hurt household's income and negatively affect housing activity.
For more news today, net consumer credit dor April fell 0.1 billion pounds from the revised previous 0.1 from 0.3 billion pounds while net lending secured on dwellings rose to 0.5 billion pounds from the revised prior of 0.2 from 0.3 billion pounds.
As the BoE continues to leave interest rates low at 0.50%, banks are holding back lending as a way to restructure their balance sheets after the worst financial crisis since the Great Depression had weighed on the strength of the nation heavily.
Officials are not worried about the housing sector as much as they are worried about the debt crisis in the nation, as they have the highest budget deficit since WWII, which is why officials are working around the clock to contain the debt before it threatens the economic recovery even further.
Source
Sunday, February 28, 2010
U.K. House Prices Surged for the Eighth Month in December amid Signs of Recovery.
The British economy, after contracting for six consecutive quarters on the back of the global recession that hit the economy last year, is now showing signs of recovery which provide evidence that the economy will mostly emerge from the downturn in the last quarter of the current year.
Interestingly, the housing market that suffered tremendously after the bubble burst has shown remarkable improvement as the economy began to recover from the worst recession since WWII. In November, U.K. house prices rose for a seventh month to 0.5% on the month and 2.7% on the year. Also, mortgage approvals climbed to 19-month high in October.
Today, Nationwide House Prices seasonally adjusted for December in the United Kingdom came in at 0.4%, lower than the previous 0.5%, yet higher than forecasts of 0.3%. On the year, the non-seasonally-adjusted reading jumped to 5.9%, above both preceding and expectations of 2.7% and 5.6% respectively.
Perhaps the main determinant of the recovery for the housing market is consumer spending and credit conditions. Household started to purchase houses again after confidence was restored on the vivid signs of recovery, especially in the third quarter when the economy eased the pace of contraction to 0.2% from 0.6% in the second quarter.
Although many households lost their income or part of it in the massive terminations wave that followed the start of the downfall, but unemployment slowed down in October to 7.9% from 7.8%, marking the slowest pace since 2008.
On the other hand, bank's credit conditions ameliorated thanks to the financial assistance by the BoE and bailouts by the government. Mervyn King and his economic team slashed the interest rate to 0.5% and introduced 200 billion pounds to purchase gilts.
However, some banks are still unable to meet the lending requirements set by the BoE. For instance, Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, the two bailed out banks by the government, are still below the lending rate set by the government.
The housing market may face difficulties in the new year as the government's budget deficit is swelling and the BoE may withdraw stimulus and hike interest rate, thereby discouraging mortgage lending. Some analysts are warning of drawback as housing prices are relying on temporary factors.
Kate Barker, Bank of England policy maker, mentioned in December that the lift up in U.K. house prices is unexpected and she anticipated the recovery may pause in 2010.
Today is the last day in 2009 that was a hectic year full of turbulences, but it seems from the data released from October to December that the fourth quarter may signal expansion.
With regard to growth outlook, the latest forecasts from the Confederation of British Industry refer that growth in 2010 will be 1.2% and 2.5% in 2011. Hence, recovery is expected to be sluggish and volatility is predicted since there might be a change in the monetary and fiscal measures.
Source
Interestingly, the housing market that suffered tremendously after the bubble burst has shown remarkable improvement as the economy began to recover from the worst recession since WWII. In November, U.K. house prices rose for a seventh month to 0.5% on the month and 2.7% on the year. Also, mortgage approvals climbed to 19-month high in October.
Today, Nationwide House Prices seasonally adjusted for December in the United Kingdom came in at 0.4%, lower than the previous 0.5%, yet higher than forecasts of 0.3%. On the year, the non-seasonally-adjusted reading jumped to 5.9%, above both preceding and expectations of 2.7% and 5.6% respectively.
Perhaps the main determinant of the recovery for the housing market is consumer spending and credit conditions. Household started to purchase houses again after confidence was restored on the vivid signs of recovery, especially in the third quarter when the economy eased the pace of contraction to 0.2% from 0.6% in the second quarter.
Although many households lost their income or part of it in the massive terminations wave that followed the start of the downfall, but unemployment slowed down in October to 7.9% from 7.8%, marking the slowest pace since 2008.
On the other hand, bank's credit conditions ameliorated thanks to the financial assistance by the BoE and bailouts by the government. Mervyn King and his economic team slashed the interest rate to 0.5% and introduced 200 billion pounds to purchase gilts.
However, some banks are still unable to meet the lending requirements set by the BoE. For instance, Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, the two bailed out banks by the government, are still below the lending rate set by the government.
The housing market may face difficulties in the new year as the government's budget deficit is swelling and the BoE may withdraw stimulus and hike interest rate, thereby discouraging mortgage lending. Some analysts are warning of drawback as housing prices are relying on temporary factors.
Kate Barker, Bank of England policy maker, mentioned in December that the lift up in U.K. house prices is unexpected and she anticipated the recovery may pause in 2010.
Today is the last day in 2009 that was a hectic year full of turbulences, but it seems from the data released from October to December that the fourth quarter may signal expansion.
With regard to growth outlook, the latest forecasts from the Confederation of British Industry refer that growth in 2010 will be 1.2% and 2.5% in 2011. Hence, recovery is expected to be sluggish and volatility is predicted since there might be a change in the monetary and fiscal measures.
Source
Monday, February 15, 2010
UK economy contracts by 0.2pc in third quarter as recession drags on
The UK's loss of output since the slump began last year now stands at 6pc - the biggest decline since records began in 1955 and surpassing the 6pc drop in output recorded between the second quarter of 1979 and the first quarter of 1981.
The 0.2pc fall is less than the 0.4pc first estimated, which was itself revised upwards by the Office for National Statistics to 0.3pc in November.
Philip Shaw of Investec told Reuters: "The headline figure is disappointing. We had hoped for a slightly punchier number and we still find it hard to believe fully that the economy was contracting in the third quarter."
The key points were the biggest quarterly rise in construction output since the third quarter of 2003, and a household saving ratio - the share of income put aside by families - of 8.6pc, which is the highest since first quarter of 1998.
Jonathan Loynes of Captial Economics said: "The sharp rise in the household saving ratio to 8.6pc might suggest that the process of household deleveraging is further advanced than previously thought."
Sterling fell briefly to a session low against the dollar of $1.6024 after the figures came out, while the FTSE 100 edged higher to trade up 40 points at 5333.
The ONS said service sector output fell by 0.2pc in the period, mainly due to continued weakness among financial services firms such as banks and insurers.
Output from production industries fell by 0.9pc on the quarter - with a 0.2pc decline for manufacturers - although there were some bright spots such as a 0.7pc output rise from hotels and catering.
Source
The 0.2pc fall is less than the 0.4pc first estimated, which was itself revised upwards by the Office for National Statistics to 0.3pc in November.
Philip Shaw of Investec told Reuters: "The headline figure is disappointing. We had hoped for a slightly punchier number and we still find it hard to believe fully that the economy was contracting in the third quarter."
The key points were the biggest quarterly rise in construction output since the third quarter of 2003, and a household saving ratio - the share of income put aside by families - of 8.6pc, which is the highest since first quarter of 1998.
Jonathan Loynes of Captial Economics said: "The sharp rise in the household saving ratio to 8.6pc might suggest that the process of household deleveraging is further advanced than previously thought."
Sterling fell briefly to a session low against the dollar of $1.6024 after the figures came out, while the FTSE 100 edged higher to trade up 40 points at 5333.
The ONS said service sector output fell by 0.2pc in the period, mainly due to continued weakness among financial services firms such as banks and insurers.
Output from production industries fell by 0.9pc on the quarter - with a 0.2pc decline for manufacturers - although there were some bright spots such as a 0.7pc output rise from hotels and catering.
Source
Thursday, January 28, 2010
UK recovery under way, but Govt needs to tackle causes of recession
The UK was the last of the G20 economies to emerge from recession, but its recovery now appears to be under way.
While still heavily indebted, households have seen their cashflows retrench aggressively, such that the savings ratio has risen from minus 1 per cent at the start of the recession to 9 per cent on the latest data.
History suggests that after such a big move upwards, the near-term imperative to save even more, especially given that the pace of job losses has slowed and confidence risen, is likely to diminish - leading to faster spending growth.
This is one reason, among many others, why the economy has probably begun to grow again.
However, British policy makers have yet to seriously begin to ensure that such a crisis is not repeated.
Sitting at the heart of the crisis, in Britain and globally, was an unprecedented build-up in financial and household indebtedness. Total UK debt to GDP rose from 173 per cent at the start of Labour's term in power to around 270 per cent today. Household savings rates, meanwhile, fell from 10 per cent to under zero - the product of financial liberalisation and too-loose monetary policy.
Labour, under then Chancellor and now Prime Minister Gordon Brown, borrowed year in, year out - since 2000 - and built up Britain's worst peacetime fiscal deficit when other countries were running surpluses.
This credit bubble saw over-inflated house prices, rising income inequality and a 30 per cent drop in the UK's purchasing power from the sharp fall of the pound. Over and above that, Britain has monetised its entire fiscal deficit from 2009. That is, it has created new money at the Bank of England which has, indirectly, been lent or given to the Government.
If history is any guide, there is a high risk that we will see a re-run, in some form, of the inflation issues that plagued the country in the 1970s.
With that backdrop, therefore, several policy suggestions make sense.
First, reduce ease of access to credit. Increase minimum monthly credit-card payments - or phase out the cards altogether. Increase, and legislate on, the minimum deposit required to buy a house.
Second, seriously consider moving away from the current international dollar-based monetary system, where the creation of credit and money has been increasingly liberalised and we have had more than 140 financial crises in the world economy.
And third, shrink the size of government, dramatically - the larger the government share of GDP, the slower the trend of economic growth.
Finally, address the systemic threat to the UK economy from the UK's banking system. With governments clearly backstopping too-large-to-fail banks, moral hazard - and ultimately income inequality - are enhanced.
Source
While still heavily indebted, households have seen their cashflows retrench aggressively, such that the savings ratio has risen from minus 1 per cent at the start of the recession to 9 per cent on the latest data.
History suggests that after such a big move upwards, the near-term imperative to save even more, especially given that the pace of job losses has slowed and confidence risen, is likely to diminish - leading to faster spending growth.
This is one reason, among many others, why the economy has probably begun to grow again.
However, British policy makers have yet to seriously begin to ensure that such a crisis is not repeated.
Sitting at the heart of the crisis, in Britain and globally, was an unprecedented build-up in financial and household indebtedness. Total UK debt to GDP rose from 173 per cent at the start of Labour's term in power to around 270 per cent today. Household savings rates, meanwhile, fell from 10 per cent to under zero - the product of financial liberalisation and too-loose monetary policy.
Labour, under then Chancellor and now Prime Minister Gordon Brown, borrowed year in, year out - since 2000 - and built up Britain's worst peacetime fiscal deficit when other countries were running surpluses.
This credit bubble saw over-inflated house prices, rising income inequality and a 30 per cent drop in the UK's purchasing power from the sharp fall of the pound. Over and above that, Britain has monetised its entire fiscal deficit from 2009. That is, it has created new money at the Bank of England which has, indirectly, been lent or given to the Government.
If history is any guide, there is a high risk that we will see a re-run, in some form, of the inflation issues that plagued the country in the 1970s.
With that backdrop, therefore, several policy suggestions make sense.
First, reduce ease of access to credit. Increase minimum monthly credit-card payments - or phase out the cards altogether. Increase, and legislate on, the minimum deposit required to buy a house.
Second, seriously consider moving away from the current international dollar-based monetary system, where the creation of credit and money has been increasingly liberalised and we have had more than 140 financial crises in the world economy.
And third, shrink the size of government, dramatically - the larger the government share of GDP, the slower the trend of economic growth.
Finally, address the systemic threat to the UK economy from the UK's banking system. With governments clearly backstopping too-large-to-fail banks, moral hazard - and ultimately income inequality - are enhanced.
Source
Monday, December 28, 2009
UK has lowest quality of life in Europe
A new report has revealed UK citizens have the lowest quality of life in the whole of Europe, due to long working hours, lower holiday entitlement, and high living costs – even though they enjoy the highest net household income, an average £35,730, which is more than £10,000 higher than the European average.
According to the uSwitch.com European Quality of Life survey, people in the UK have a lower life expectancy than those in France, Germany, Spain, Sweden and the Netherlands.
This could be attributed to the fact that the UK has the lowest spend on healthcare and education. In addition, UK citizens have to pay more than the European average for fuel, food, alcohol and cigarettes.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “There is more to good living than money and this report shows why so many Brits are giving up on the UK and heading to France and Spain. We earn substantially more than our European neighbours, but this level of income is needed just to keep a roof over our heads, food on the table and our homes warm.”
The Spanish enjoy the most hours of sunshine, the lowest alcohol prices and the highest number of days’ holiday – a huge 41 days, compared to an average of 28 in the UK. However, France topped the league, spending the most on healthcare and enjoying the longest life expectancy.
More depressing still, next year’s Quality of Life survey is expected to show the full impact of the recession – the UK is still experiencing the effects of the downturn in the economy, while France has emerged from its recession. Because of this, quality of life is likely to drop even further, as public spending is reined in and the number of jobless is expected to climb to three million.
“For too long the focus in the UK has been on standard of living rather than quality of life. As a result we have lost all sense of balance between wealth and well-being. The recession could prove to be a turning point, forcing us to re-evaluate our way of life, get back to basics and to the things that really count,” concluded Robinson.
Source
According to the uSwitch.com European Quality of Life survey, people in the UK have a lower life expectancy than those in France, Germany, Spain, Sweden and the Netherlands.
This could be attributed to the fact that the UK has the lowest spend on healthcare and education. In addition, UK citizens have to pay more than the European average for fuel, food, alcohol and cigarettes.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: “There is more to good living than money and this report shows why so many Brits are giving up on the UK and heading to France and Spain. We earn substantially more than our European neighbours, but this level of income is needed just to keep a roof over our heads, food on the table and our homes warm.”
The Spanish enjoy the most hours of sunshine, the lowest alcohol prices and the highest number of days’ holiday – a huge 41 days, compared to an average of 28 in the UK. However, France topped the league, spending the most on healthcare and enjoying the longest life expectancy.
More depressing still, next year’s Quality of Life survey is expected to show the full impact of the recession – the UK is still experiencing the effects of the downturn in the economy, while France has emerged from its recession. Because of this, quality of life is likely to drop even further, as public spending is reined in and the number of jobless is expected to climb to three million.
“For too long the focus in the UK has been on standard of living rather than quality of life. As a result we have lost all sense of balance between wealth and well-being. The recession could prove to be a turning point, forcing us to re-evaluate our way of life, get back to basics and to the things that really count,” concluded Robinson.
Source
Tuesday, December 15, 2009
UK ENJOYS HIGHEST NET INCOME IN EUROPE BUT LIFE QUALITY IS POOREST
While the UK enjoys the highest net household income in Europe, quality of life is the poorest, proving that there is more to good living than money. Long working hours, lower holiday entitlement and a high cost of living all contribute to a poor quality of life in the UK - and it's not much better for the Irish either:
•Best quality of life can be found in France and Spain. The worst can be found in the UK and Ireland
•Depressing: UK workers can expect to work 3 years longer and die 2 years younger than their French counterparts
•Cost of living: consumers in the UK are paying above the European average for fuel, food, alcohol and cigarettes
•Health and education: the UK's spend on healthcare and education is below the European average. Only Ireland and Poland spend less on healthcare, but Ireland has more doctors and hospital beds and Poland has more beds than the UK
•Longer life: Germany, Spain, France, Italy, the Netherlands and Sweden all enjoy longer life expectancy than the UK
•Retirement age in the UK has dropped, but it is still the 4th highest in Europe
•UK enjoys highest net household income, but workers in the UK get lowest holiday entitlement in Europe.
The latest uSwitch.com European Quality of life Index reveals that people in the UK are still getting a raw deal compared with their European neighbours. Despite the fact that the UK enjoys the highest net household income in Europe - GBP35,730 a year, which is more than GBP10,000 a year above the European average - this does not translate into a good life. Instead, people in the UK can expect to work longer, die younger and enjoy lower standards of healthcare and education.
The uSwitch.com study examined 17 factors in order to understand where the UK sits in relation to nine other major European countries. Variables such as net income, taxes and the cost of essential goods, such as fuel, food and energy bills, were examined along with lifestyle factors, such as hours of sunshine, holiday entitlement, working hours and life expectancy to provide a complete picture of the quality of life experienced in each country.
The findings show that people in the UK and Ireland have the poorest quality of life, while the French and Spanish enjoy the highest. The UK gets the lowest number of days holiday per year, pays the highest prices for diesel and food and spends below the European average (as a percentage of GDP) on health and education. It also has the 4th lowest life expectancy in Europe and workers retire later than most of their European counterparts.
France, which topped the league, enjoys one of the lowest retirement ages, has the longest life expectancy in Europeand spends the most on healthcare Its workers also benefit from 34 days holiday a year - compared with only 28 in the UK - and it comes only behind Spain and Italy for hours of sunshine.
Spain, which topped the league last year, enjoys the most sunshine - but it has more to smile about than just that. The Spanish can expect to live a year longer than people in the UK, enjoy the highest number of days holiday in Europe (41 days a year) and pay the lowest fuel prices. And as if that's not enough to celebrate, they are paying the lowest prices for alcohol too.
This year's index does not reveal the full impact of the recession - this can be expected to show next year. However, France officially went into recession in May 2009 and has already emerged again (August 2009). This quick turnaround could see it maintaining a high quality of life despite the economic difficulties facing most European nations. Spain entered recession in February 2009 with no official announcement as to when it is likely to exit. Poland is the only country in the study not to have gone into recession and it is widely expected to avoid it throughout 2009.
Out of the two countries experiencing the lowest quality of life, Ireland went into recession first in September 2008 while the UK officially went into recession in January 2009. Both are yet to exit and the impact on the UK is expected to be severe and long lasting. Unemployment has already hit a 14 year high at 2.47 million workers or 7.9% of the workforce - the highest rate since 1995. Even with the UK due to start recovery shortly, the jobless toll is still expected to rise with the British Chambers of Commerce predicting numbers exceeding 3 million next year.
Importantly, as politicians start to plot a way out of the financial mire, quality of life in the UK could suffer even more. This is because public spending is likely to be reined in so that the amount spent in the UK on education and health could fall. The Labour Government has already indicated GBP2 billion of cuts to come on education but it has so far rejected advice from management consultants to cut the NHS workforce by 10% over the next 5 years. The UK is already spending below the European average (as a percentage of GDP) on both health and education.
Wealth
The study shows that the UK has the highest net household income in Europe. At GBP35,730 it is GBP10,325 higher than the European average and more than double that of Spain, which has the lowest net household income at GBP16,789. However, people living in the UK also have to contend with a high cost of living - the average household energy bill alone adds up to an eye watering GBP1,239 a year while the average household now pays GBP1,175 a year in council tax. Even travel is expensive with a 30 mile journey into London on a train setting commuters back over GBP3,000 a year.
In fact, consumers in the UK are paying above average for most of the essentials:
•Fuel: at GBP1.08 a litre, the UK is the second most expensive country in Europe for unleaded petrol. However, diesel is more expensive in the UK than anywhere else in Europe - GBP1.13 a litre, which is 19p or 20% above the European average (GBP0.94). Spain has the lowest price for diesel at only GBP0.81 a litre.
•Food: again, the UK is paying more than all its neighbours. The same basket of goods that costs GBP134.48 in the UK costs GBP124 on average in Europe and only GBP118.76 in France, which enjoys the lowest food prices.
•Cigarettes and alcohol: not essentials, but nevertheless only Ireland and Sweden pays more for a round of drinks than the UK and only the Irish pay more for cigarettes than smokers in the UK.
•Best quality of life can be found in France and Spain. The worst can be found in the UK and Ireland
•Depressing: UK workers can expect to work 3 years longer and die 2 years younger than their French counterparts
•Cost of living: consumers in the UK are paying above the European average for fuel, food, alcohol and cigarettes
•Health and education: the UK's spend on healthcare and education is below the European average. Only Ireland and Poland spend less on healthcare, but Ireland has more doctors and hospital beds and Poland has more beds than the UK
•Longer life: Germany, Spain, France, Italy, the Netherlands and Sweden all enjoy longer life expectancy than the UK
•Retirement age in the UK has dropped, but it is still the 4th highest in Europe
•UK enjoys highest net household income, but workers in the UK get lowest holiday entitlement in Europe.
The latest uSwitch.com European Quality of life Index reveals that people in the UK are still getting a raw deal compared with their European neighbours. Despite the fact that the UK enjoys the highest net household income in Europe - GBP35,730 a year, which is more than GBP10,000 a year above the European average - this does not translate into a good life. Instead, people in the UK can expect to work longer, die younger and enjoy lower standards of healthcare and education.
The uSwitch.com study examined 17 factors in order to understand where the UK sits in relation to nine other major European countries. Variables such as net income, taxes and the cost of essential goods, such as fuel, food and energy bills, were examined along with lifestyle factors, such as hours of sunshine, holiday entitlement, working hours and life expectancy to provide a complete picture of the quality of life experienced in each country.
The findings show that people in the UK and Ireland have the poorest quality of life, while the French and Spanish enjoy the highest. The UK gets the lowest number of days holiday per year, pays the highest prices for diesel and food and spends below the European average (as a percentage of GDP) on health and education. It also has the 4th lowest life expectancy in Europe and workers retire later than most of their European counterparts.
France, which topped the league, enjoys one of the lowest retirement ages, has the longest life expectancy in Europeand spends the most on healthcare Its workers also benefit from 34 days holiday a year - compared with only 28 in the UK - and it comes only behind Spain and Italy for hours of sunshine.
Spain, which topped the league last year, enjoys the most sunshine - but it has more to smile about than just that. The Spanish can expect to live a year longer than people in the UK, enjoy the highest number of days holiday in Europe (41 days a year) and pay the lowest fuel prices. And as if that's not enough to celebrate, they are paying the lowest prices for alcohol too.
This year's index does not reveal the full impact of the recession - this can be expected to show next year. However, France officially went into recession in May 2009 and has already emerged again (August 2009). This quick turnaround could see it maintaining a high quality of life despite the economic difficulties facing most European nations. Spain entered recession in February 2009 with no official announcement as to when it is likely to exit. Poland is the only country in the study not to have gone into recession and it is widely expected to avoid it throughout 2009.
Out of the two countries experiencing the lowest quality of life, Ireland went into recession first in September 2008 while the UK officially went into recession in January 2009. Both are yet to exit and the impact on the UK is expected to be severe and long lasting. Unemployment has already hit a 14 year high at 2.47 million workers or 7.9% of the workforce - the highest rate since 1995. Even with the UK due to start recovery shortly, the jobless toll is still expected to rise with the British Chambers of Commerce predicting numbers exceeding 3 million next year.
Importantly, as politicians start to plot a way out of the financial mire, quality of life in the UK could suffer even more. This is because public spending is likely to be reined in so that the amount spent in the UK on education and health could fall. The Labour Government has already indicated GBP2 billion of cuts to come on education but it has so far rejected advice from management consultants to cut the NHS workforce by 10% over the next 5 years. The UK is already spending below the European average (as a percentage of GDP) on both health and education.
Wealth
The study shows that the UK has the highest net household income in Europe. At GBP35,730 it is GBP10,325 higher than the European average and more than double that of Spain, which has the lowest net household income at GBP16,789. However, people living in the UK also have to contend with a high cost of living - the average household energy bill alone adds up to an eye watering GBP1,239 a year while the average household now pays GBP1,175 a year in council tax. Even travel is expensive with a 30 mile journey into London on a train setting commuters back over GBP3,000 a year.
In fact, consumers in the UK are paying above average for most of the essentials:
•Fuel: at GBP1.08 a litre, the UK is the second most expensive country in Europe for unleaded petrol. However, diesel is more expensive in the UK than anywhere else in Europe - GBP1.13 a litre, which is 19p or 20% above the European average (GBP0.94). Spain has the lowest price for diesel at only GBP0.81 a litre.
•Food: again, the UK is paying more than all its neighbours. The same basket of goods that costs GBP134.48 in the UK costs GBP124 on average in Europe and only GBP118.76 in France, which enjoys the lowest food prices.
•Cigarettes and alcohol: not essentials, but nevertheless only Ireland and Sweden pays more for a round of drinks than the UK and only the Irish pay more for cigarettes than smokers in the UK.
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