Member Article

IMF lowers UK’s economic growth forecast

The euro had a weak start this morning after the week-end; fell to a new three and a half year low against the sterling to 78.55 pence, sending up the sterling index to its highest since May 16.

Shares in G4S (formerlyGroup 4 Securicor) (LSE: GFS)slumped by 10% on Monday after the company said that it could not provide enough security guards for the Olympics and admitted it could lose up to £50 million on the £284 million contract in order to “fill the gaps”. The British multinational security service company failed to provide 10,500 security guards for the Games, forcing ministers to assign an extra 3,500 Armed Forces personnel offered by the army.

The British government announced today a £9.4 billion railway investment in England and Wales. The project will take 6 years (from 2014-1019) and will include over 4 billion of new schemes. Prime Minister David Cameron called it the “biggest modernisation of our railways since the Victorian era”.

Concerning the U.S, as weak job data made consumers more cautious, Retail sales data declined by 0.5% in June from May (0.3% more than analysts expected). Also the IMF (International Monetary Fund) expects less from the world economy, cutting its forecast for global GDP growth in 2012 from 3.6% to 3.5% and its forecast for 2013 from 4.1% to 3.9%. With regards to the UK, the IMF previously predicted the UK economy would grow by 2.3% in 2012, whereas today it says the economy would only manage a growth of 0.2% this calendar year and 1.4% in 2013 (down from the prediction of 2% three month ago).

Stock Markets changed just slightly today and closed almost flat with the FTSE 100 up 0.01% (at 5.662), the CAC 40 down 0.03% (at 3,179) and the German DAX as the highest performer, closed at 6566, up 8.62 points (0.13%).

This was posted in Bdaily's Members' News section by James .