Europe Should Be More Decisive On Monetary Union

The IMF have said that Europe's policy makers should to be more decisive in pursuing monetary union. The response to the immediate crisis was bold they said and proved the euro area has the capability to act together when required. They suggest that the operation of European Financial Stability Facility is imperative and should be secured as quickly as possible. They say crisis management is no substitute to the corrective policy actions and fundamental reforms are necessary to reinforce the EMU foundations. In the euro area fiscal responses should be adapted to the individual circumstances of each country. Fiscal sustainability is an important aim that all countries not only European countries have to take into account.

CLA Response To Uplands Report

The uplands report 'High Ground High Potential' by the CRC requires more depth according to the CLA. The survival of the uplands economy will require more specific policy and ground work if it is to be ensured. The CLA also question the necessity of a national strategy for the uplands and the appointment of a lead individual.

High Street Hopes For World Cup Recovery

Retail sales again fell slowly in June according to the Distributive Trades Survey for June from the CBI. The results are still better than expected and an improvement on May. The decline was led by a sharp fall in footwear and then leather and hardware, china and DIY. It is hoped that the World Cup will have a beneficial effect in the July survey.

Wide Range In EU27 per capita GDP PPS

The latest preliminary estimates for per capita GDP in Purchasing Power Standards (PPS) terms from Eurostat for the EU27 varied from 41% in Bulgaria to 268% in Luxembourg of the EU27 average (100).

Environmental Protection Expenditure 1.8% GDP

Data regarding Environmental Protection Expenditure (EPE) from Eurostat shows the efforts being made to combat the pollution that is the result of the production and consumption of goods and services. EPE is the total investment and expenditure for industry, the public services and specialised producers. The data refer to 2006.

The EPE for the EU25 in 2006 was 1.8% of GDP. Industry spent about 50bn euros in 2006, about 0.4% of GDP, in protecting against environmental pressures. The public sector's share was 0.5% and specialised producers 0.9% of GDP.

In terms of gross fixed capital formation (GFCF) in the EU27, investments in environmental protection were fairly steady at around 1.4% for specialised producers between 2001-6, 0.6% for the public sector and 0.5% in industry, from 0.7%.

Total per capita EPE was highest in Austria in 2005 and the Netherlands in 2001 with around 800 euros per year per person. Italy spend around 600 euros per year per person in 2005. The least was spent by Latvia in 2005 with 36 euros.

Budget 2010

The main budget announcements from the five-year plan set out by Chancellor of the Exchequer George Osborne yesterday set out actions to reduce the budget deficit, to introduce a 'fairer' tax system, encourage enterprise and support long-term growth in the economy. The Coalition Government's three core values of responsibility, freedom and fairness are the basis for the Budget intentions to help rebalance the economy and provide conditions for sustainable growth.

In order to reduce the deficit the Chancellor has set a fiscal mandate to achieve a current balance by the end of the five-year period 2015-16; a target for debt to ensure sustainable public finances; spending reductions of £31.9bn/year by 2014-15 and tax increases of £8.2bn; £29.8bn of savings from current expenditure and £2.2bn from gross public investment; increase in VAT to 20%; indurance Premium Tax to 6%; a two year pay freeze on public sector pay (except those on less than £21,000pa who will get an additional £250).

Conditions for enterprise and sustainable growth were also set out to make UK more competitive by reducing regulation and providing tax breaks. Corporation tax rates will be reduced from 28% to 24%; the small profits rate will be reduced from 21% to 20%; NICs holiday for new businesses in certain areas; an increase in the Enterprise Finance Guarantee and a new Enterprise Capital Fund; a Regional Growth Fund in 2011-12 and 2012-13 for increases in business employment and growth.

The deficit reduction burden will be shared, the Budget says, by refocusing the tax and benefit framework and 'protecting the most vulnerable in society'. The Government want to encourage people to take personal responsibility, work hard and save responsibly. The personal allowance for under 65s will be increased by £1,000 to £7475 in 2011-12 taking 880,000 out of income tax; capital gains tax increase from 18% to 28% for higher rates and an extension of the 10% rate for entrepreneurial activites from first £2m to first £5m of qualifying gains made over a lifetime; a council tax freeze; a levy on banks balance sheets from January 2011. The basic State Pension will be uprated by a triple guarantee of earnings or 2.5% whichever is highest, from April 2011; reduction in tax credits for those with household income over £40,000 from £50,000; reducing annual allowance of pension tax relief; indexing benefits to the CPI instead of the RPI to reflect more fairly benefits claimants experiences.

The Government added that the Budget measures will pay for the past and plan for the future. They represent a first step in the transformation of the economy, rebalancing growth and lead to sustainable, private sector led growth.

Demand For Manufactured Goods Slightly Weaker

The latest Industrial Trends report from the CBI says that overall demand for UK manufactured goods weakened slightly in June. Order books are still close to their long-term average. Export orders are however also weaker compared with last month but almost normal. Output is still expected to be increased during the next three months. Prices are expected to rise but more slowly than the last three months. Consumer goods are not exopected to rise and no change is expected in capital goods. Stocks are more than adequate to meet demand for the third month in a row, but below the survey's long-run average.

New Directions Suggested For Upland Communities

Current support for hill farming is inadequate to sustain the wealth of natural and cultural assets of the English uplands according to the findings of the inquiry into the future of the English uplands by the Commission for Rural Communities (CRC). The CRC suggests new funding mechanisms are required to reward farmers for managing national assets in harmony with a developing business sector. The CRC say the suggested reforms could be part of the Common Agricultural Policy from 2013. They say there is a need to strike a balance between the needs of the environment and maximising the economic potential of the uplands. Thriving communities are an essential part of sustaining natural resources, they say, supporting farmers is not enough.

The report calls an integrated approach to realising the potential of the diverse natural resources of the uplands. It says too many well-intentioned intentions have had negative consequences for communities, farmers and land owners. It also the appointment of someone accountable to ministers to lead the implementation of the new strategy.

Other recommendations include a long-term land managemnt policy to mitigate carbon loss, completion of an audit of opportunities for renewable energy to stimulate new enterprise and opportunities for value addition, taking proper account of upland communities when developing and delivering the Goverment's 'Big Society' programme replacing voluntary and community efforts with committed and reliable measures, development of Next Generation Access in upland areas and guidance on affordable homes.

The uplands are home to over 2 million people with an above average proportion of over 40s, 25% of all woodland and 70% of drinking water comes from the uplands, 75% of the uplands are designated National Park or Area of Outstanding Natural Beauty (AONB), 53% of England's Sites of Special Scientific Interest (SSSI) are in the uplands and 82% of common land. The 40 million visitors to the upland National Parks spend £1.78bn there every year.

Current Deficit Down By £1.6bn

The latest public sector finance statistics from the ONS show that the current budget deficit in May 2010 was £14.1bn, £1.6bn down on £15.7bn in 2009. Reconciled with net investment of £1.9bn net borrowing (PSNB) was £16bn, £1.4bn down on £17.4bn in 2009. PSNB excluding financial interventions was £28.7bn in Q4 2009. Public sector net debt (PSND) was £903bn which is equivalent to 62.2% of GDP. PSND excluding financial interventions at the end of March was £771.5bn from the £616.9bn a year earlier. Public sector net cash requirement £12bn, £7.2bn down on £19.1bn.

A sectoral breakdown of the figures shows that central government accounted for £20.2bn and local government -£3.4bn giving a general government figure of £16.8bn. Public corporations accounted for -£0.8 giving the PSNB figure of £16bn.

Accessibility Of Key Services

The Department for Transport has released statistics covering the core accessibility indicators for 2009. The measures show the accessibility of 8 key services to the population that uses them. The 8 key indicators are food stores, primary and secondary schools, further education, GPs and hospitals, town centres and employment centres. They give estimations of the proportion of the population that can access them within reasonable time limits by public transport/walking, cycle and car. The indicators take three forms: destination, travel time and origin.

The key findings are given at national and regional level. At the national level, on destination indicators which look at the proportion of the local population with access to the services, the highest proportion of the population able to access key services by public transport/walking in a reasonable time was 83% for employment centres and the lowest was for hospitals at 34%. Cars give highest level of overall access to all services at 76% and cycle the lowest at 50%, public transport/walking gave 57% but also gave the widest variation from 34% for hospitals to 83% for employment centres.

There are variations in accessibility to services in urban and rural areas. The greatest variations were for hospitals and town centres with a 16% difference between urban and rural areas. The least was for primary schools with only a 3% difference. In urban areas 60% of the population could easily access the 8 key services by public transport or walking but in rural areas it was only 48%.

In terms of travel time indicators the average time to travel to all key services was 5 minutes by car, 15 minutes by public transport/walking and 17 minutes by cycle. The average minimum time to travel to the nearest service by public transport/walking was lowest for primary schools and food stores at 9 minutes and highest for hospitals at an average of 30 minutes. By cycling the average time was lowest for primary schools at 5 minutes and highest for hospitals at 52 minutes. By car the average minumum time for all services was 5 minutes.

The survey also loooked at the choice of key services available to local populations. These are called the origin indicators. Thirty per cent of local communities (LSOA level) had access to more than one hospital by public transport or walking and 25% had access to more than one town centre. Over 90% had access by public transport or walking to employment centres of over 5,000 jobs within reasonable time.

At the regional level, there was little difference in access to services between Government Office regions with the exception of London. Overall access to the 8 key services by all modes was greatest in London with 64% for public transport/walking, 59% cycling and 77% by car and the East of England was lowest by public transport/walking with 54% and by cycling with 46%. Access by car was similar in all regions at 75-78%. The lowest average minimum travel time by public transport/walking was in London at 10 minutes and highest in the South West at 21 minutes and 15 minutes nationally. Cycling lowest travel time was in London at 6 minutes and highest in the East of England at 26 minutes and 17 minutes nationally. By car the average minumum travel time was 6-7 minutes in all regions. The greatest level of choice of services was in London the lowest in the South West, East of England and the East Midlands.

Retail Sales Increase Again

The latest retail sales indicators from the ONS say that the value of retail sales in May 2010 was up by 4.4% on May 2009 and volume of retail sales in May 2010 increased by 2.2% on May 2009.

Looking at the value of retail sales in more detail, predominantly food stores were 1.4% up on last year and predominantly non-food stores 5.4% up on last year, especially non-specialised stores 8.5%. Textile, clothing and footwear increased by 6.6%, household goods by 2.7% and 'other stores' by 4.5%. In non-store retailing the increase was 12.2% and fuel went up 9.2%.

Volumes in greater detail show that food stores were 0.5% lower in volume, non-food stores were up 5.4% within which non-specialised increased 9.4%, textile, clothing and footwear increased 7.1%, household goods 2.7% and 'other stores' 3.6%. Non-store retailing increased 11.8% but fuel volumes were 9.6% lower

Estimated sales prices were 2.3% higher than last year. The value of Internet retail sales in May 2010 was £409m. It equates to 7.9% of total retail sales totalling an estimated £24.8bn. The average weekly value of sales was estimated at £6.2bn.

The retailer group that experienced the most growth based on number of employees was the group with between 40-69 employees which grew by 21.1%. Retailers with 0-9 employees grew on average by 5.4% and retailers with over 100 employees grew by 4.9%. In contrast, the group with 70-99 employees experienced a decrease of 35.1%.

2.1% Rise In Euro Labour Costs

Euro area hourly labour costs rose by 2.1% in the year to Q1 2010. In the EU27 the rise was 2.2%. Wages and salaries per hour grew by 2% and the non-wage component by 2.1%. In the EU27 wages and salaries rose by 2.3% and the non-wage component by 1.9%. Statistics from Eurostat Labour Cost Index (LCI) euroindicators.

In the euro area, labour costs per hour in industry increase was 1.8%, in construction 2.1% and in services 2.2% in the year to Q1 2010. In the EU27 labour costs per hour grew by 1.8% in industry, 1.4% in construction and 2.5% in services.

The highest annual increases were in Bulgaria (10.5%) and Romania (7.4%). The highest decreases were in Lithuania (-11%), Latvia (-7.2%), Estonia (5.5%) and the Czech Republic (-3.1%).

EU Inflation Unchanged At 2%

EU annual inflation was unchanged at 2% in May 2010. The previous year it was 0.8%. Monthly inflation in May was 0.2%. Annual inflation in the euro area was 1.6% in May. This time last year it was 0.0%. Monthly inflation was 0.1% in May 2010.

The lowest annual inflation rates in the EU in May were in Latvia (-2.4%) and Ireland (-1.9%). The highest rates of inflation were in Greece (5.3%), Hungary (4.9%) and Romania (3.6%). Inflation fell in 10 member states and rose in 12. It was stable in the other 5. Over the year the picture is much the same with the highest rates in Ireland (-2.5%), Latvia (-1.2%) and Portugal (-0.5%) and the lowest in Hungary (5.1%), Romania (4.7%) and Poland (3.6%).

The main contributions to the changes came from recreation and culture and alcohol and tobacco (0.4%) with the highest monthly rates and food and communications (both -0.2%) and education (0.0%) the lowest.

Fall In Public Sector Employment

The number of people in public sector employment fell by 7,000 to 6.09m in the first quarter of 2010. The number employed in central government remained the same but in local government the numbers fell by 4,000 and in public corporations by 3,000. The Civil Service lost 3,000 workers and its share of public secor employment stands at 529,000.

Analysing the figures according to Standard Industrial Classification (SIC) industries the largest increase was the 4,000 (1.1%) increase in the National Health Service. Other health and social work increased by 4,000 (1%), education 3,000 (0.2%) and construction 1,000 (2%).

London is the region with the largest number of public sector emplyees with 782,000, then the North West with 696,000 and the South East 694,000 and Scotland 610,000. There were increases in publc sector emplyment of 4.3% or 19,000 in the East of England, 3% or 23,000 in London, the South West with 5,000 or 1% and East Midlands with 0.8% or 3,000 but decreases in the South East of 7,000 or 1%, a 0.6% fall in Yorkshire and the Humber of 3,000 and the West Midlands of 1,000 or 0.2%.

At the national level, the number of public sector workers in England increased by 0.8% or 37,000 and N.Ireland by 0.4% or 1,000. Scotland saw a decrease in employee numbers of 13,000 while Wales was unchanged.

The most significant losses in the Civil Service in Q1 2010 compared with Q4 2009 were in the Justice ministry, HM Revenue and Customs and Work and Pensions. Defra's losses were small in comparison.

Note Of Caution On Fall In TB Incidence

The provisional estimates of new TB incidence in cattle for March 2010 are 10% lower than they were in March 2009 according to Defra. The increase in the number of herds tested over the same period means that there was a provisional overall decrease in the TB incidence rate. There was also a fall in the provisional average confirmed incidence rate from 4% to 3.8% for the same period.

There were a total of 9,497 tests on herds. There were 3,909 restricted herds and tests on 8,083 unrestricted herds 515 of which were new herd indicents. The number of cattle tested for TB totalled 859,117 of which 3,027 reactors and 78 contacts had to be slaughtered totalling 3,105 cattle.

Long-term Unemployment At Record Levels

The employment rate according to the latest ststistics from the ONS is 72.1% equivalent to 28.86m employed people. Full-time worker numbers were down 56,000 over the quarter, but part-time work increased 61,000. 1.08m people were working part-time because they couldn't find a job (highest since 1992).

The unemployment rate was up 0.1% over the quarter to 7.9% leaving 2.47m people unemployed up 23,000 The were 1.48m on Jobseeker's Alowance. The long-term unemployed increased by 85,000 to reach 772,000, the highest figure since April 1997. The number of people unemployed for up to six months fell by 42,000 to 1.17m.

There were 30.75m workforce jobs in December 2009, down 533,000 on a year earlier. There were 5.2 unemployed people for every vacancy. The number of vacancies for May 2010 was 492,000 an increase of 7,000. All industry sector showed some form of movement over the quarter. In all 173,000 employees were made redundant, down 137,00 on last year in 3 months to April, that is 7/1000 employees.

The inactivity rate went up to 21.5%, an increase of 29,000 to 8.19m, a record high. Working age inactive people, including students and the long-term sick, increased by 58,000 to 2.07m. Total hours worked per week were 907.3m in three months to April. Average weekly hours 31.5, unchanged.

The annual growth rate for pay was 4.2% for three months to April from 4.3% in March. Annual regular pay growth was 1.9% for three months to April from 2% in March. Regular pay rose by 1.9%. Average weekly earnings including bonuses was £455/week in April 2010, a rise of 4.2% over the three months. Average weekly wage excluding bonuses was £428. In the private sector including bonuses was £450 up 4.5%, excluding bonuses £419. In the public sector including bonuses £463, up 4.2% over the year, excluding bonuses £458 up 3.7%.

Output per worker was 1.4% lower than in Q4 2009 on the year. Unit wage costs were up 2.4%. 5 stoppages cost 2000 working days lost in April. Over year to April 98 stoppages cost 713,000 lost working days.

House Prices Up 10.1% On Last Year

The House Price Index (HPI) from the Department for Communities and Local Government (DCLG) for April 2010 went up by 10.1% between April 2009 and April 2010 and 0.4% on March. The average house price was £207,516 in April 2010 and the all dwellings index was 174.4.

Annual average house prices in England went up 10.9%, in Scotland 2.2% and in Wales 11.3% but N.Ireland house prices fell by 8.9%. First time buyers paid 12.2% more than a year ago. Average prices for former owner/occupiers were 9.3% higher. New properties were 7.6% more than last year and pre-owned houses were up 10.3%.

House prices rose in all regions of the UK except Yorkshire and Humber where prices fell 0.5%. East Midlands saw the biggest increase with a rise in prices of 2.7%. Over the year to April all regions have seen an increase in house prices. The largest increases were in London where there were price rises of 16.8%.

The average price for a house in England in April was £214,863, in Scotland £162,392, in Wales £151,079 and in N.Ireland £163,201. The English region with the highest average house price was London. The North East was the lowest with £139,595. The regions with an average house price above the national average were the East of England, London, the South East and the South West.

Euro Area Trade Surplus Down On Year

The euro area had a trade surplus of 1.8bn euros with the rest of the world in April 2010 compared with a 2.6bn euro surplus in April 2009. Exports fell by 2.4% in April 2010 against March 2010 and imports fell by 3.5%. The first estimates for the EU27 report a 10.2bn euro trade deficit on an annual basis. On a monthly basis there was a deficit of 7.2bn euros. Imports fell by 2.8% and exports by 2.4%.

The figures for January to March 2010 show that the EU27 deficit for energy rose by 66.6bn euros but the surplus for manufactured goods rose by 35.9bn euros. EU27 exports to all of its major trading partners grew in January-March 2010 especially to China (+48%), Brazil (+43%) and Turkey (+41%). The biggest increase in imports was to Russia with 35%.

The EU27 trade surplus with the US increased by 14.2bn euros. The trade deficit with China decreased from 37bn euros to 34.6bn euros but increased with Russia from 10.5bn euros to 18.2bn euros. The largest total trade deficit was the UK with 24.9bn euros.

Employment Stable In Euro Area

Employment in the euro area was stable in the first quarter (Q1) of 2010. During the same period in the EU27 the number of people employed decreased by 0.2% or 455,000 people.

Employment fell by 1% in the euro area in manufacturing and by 1.2% in the EU27 and in construction by 1.5% and 2.3% respectively. In financial services and business activities employment increased by 0.5% in the euro area and 0.3% in the EU27. Employment in agriculture rose by 0.2% in the euro area and 0.3% in the EU27.

Inflation Up 3.7%

The CPI for May rose by less than in April but it is still far higher than the Government target of 2%. It rose by 3.7% in April. The index was 114.4. The RPI at 223.6 rose by 5.1% down from 3.7% last month. The RPIX (RPI excluding mortgage interest payments) rose to 222.8 or by 5.1%, down from 5.4% the previous month.

The main contributory sectors to the change in the CPI were food and non-alcoholic beverages chiefly meat and in particular pork and fruit particularly grapes. Vegetables also had a small downward effect. Transport also had a downward effect as did the purchase of new cars and road passenger transport. Alcoholic beverages and tobacco, recreation and culture both had large downward effects. Books had a small upward effect. Housing and household services provided the only large upward contribution.

The RPI experienced a large downward contribution from food, fruit particularly grapes and mayonnaise and meat. Motoring expenditure and the purchase of motor vehicles made downward effects. The price of alcohol rose but by less than a year ago. Small downward contributions came from leisure services in particular foreign holidays, tobacco prices rising by less than a year ago and from household services again prices rising by less than a year ago. A small upward contribution was made by household goods where there were price rises. Furniture, in particular, kitchen base units provided the upward effect partially offset by a downward effect from furnishings.

Production In Europe Increased In April

Indicators from Eurostat tell us that in April 2010 industrial production in the euro area was up by 0.8% and by 0.5% in the EU27 compared with March 2010. Other monthly comparisons include the production of capital goods which increased by 1.1% in the euro area and 0.7% in the EU27. Durable consumer goods fell by 0.1% in the euro area but increased by 0.4% in the EU27. Non-durables fell by 1.2% and 1.6%. Intermediate goods grew by 2.2% and 2.7% respectively but energy fell by 0.9% and 0.2%. Industrial production rose in 12 and fell in 9 of the countries for which data is available. The highest increases were in Lithuania with 6%, Estonia 2.4% and Denmark with 2.2%. Ireland registered the biggest decrease with 10.9%, Portugal's production fell by 4.4% and Greece by 3.4%.

Annual comparisons suggest that in April 2010 compared with April 2009 industrial production increased by 9.5% in the euro area and 7.8% in the EU27. Intermediate goods made the biggest contribution with growth of 16% in the euro area and 14.1% in the EU27. Capital goods increased by 8.9% in the euro area and 7.9% in the EU27. Energy production rose by 6.9% and 5% respectively. Production of non-durable consumer goods went up by 3% in the euro area and 1.1% in the EU27 and of durables by 1.4% and 4.1% respectively. On a national level industrial production rose in 18 of the member states for which data is available. The highest increases were in Estonia (18.3%), the Netherlands (14.7%) and Germany (13.9%). The only states in which industrial production fell were Greece (-6.4%), Ireland (-2.8%) and Bulgaria (-2.6%).

Slower Rate Of Expansion May Continue

The OECD Composite Leading Indicators for April suggest that there is a slowing down of expansion in most OECD countries. The OECD area CLI increased by 0.4 to in April 2010, following from the 0.5 in March. The increase has slowed now for the nine consecutive months.

The growth cycle outlook suggests that potential peaks have appeared in Brazil and in China, France and Italy. The Major Five Asian economies (China, India, Indonesia, Japan and Korea) also display signs of a potential peak. The continuity is also there in Japan, US and Germany and is expected to be maintained though at a slower pace. Brazil's recent peaks were in October 2004 and May 2008 the most recent trough was in April 2009. The most recent trough in China was in February 2009 and their most recent peak was in December 2007.

Global Peace Index 2010

The world is less peaceful than last year is the sad news from the Institute for Economics and Peace Global Peace Index (GPI) 2010. The GPI monitors domestic and international conflict, safety and security in society and militarisation in 149 countries. It recorded increases in several indicators including the likelihood of demonstrations and perceptions of criminality. Some indicators seemed to link with the recent global economic downturn.

It is the fourth edition of the GPI and it has increased to rank 149 independent states. An international panel selected 23 qualitative and quantitative indicators to make up the index. The experts included academics, business people, philanthropists and leading international pacifists. The country most at peace was New Zealand followed by Iceland and Japan in third. Iraq was the most war torn country followed by Somalia and Afghanistan.

The GPI results were correlated with several economic and societal indicators to contribute an understanding of what factors help to create and sustain peace in the world. The GPI is collated and calculated by the Economist Intelligence Unit who co-operated in writing the report.

Growth Could be Faster

IMF say that the recovery is taking place more quickly than expected but it is uneven. With the right co-ordination it could be faster and more even with growth of 2.5% or 30 million jobs globally.

Threats include fiscal debts in some countries, possible asset 'bubbles' in emerging economies and the danger that consolidation in some parts of the world could have effects on others.

World leaders will discuss policy options at the coming world leaders summit in Canada. Ministers have already agreed on a number of reforms following the global crisis - greater transparency, stronger capital and liquidity standards, fair and substantial contribution, supervision of hedge funds and credit rating agencies and a single set of global accounting standards.

Ageing In The European Union

Ageing in the context of EU statistics is the increase over time of the percentage share of the over 65 age group in the total population of a given area. It is increasing in the EU because of two factors. The first is that the number of people over 65 is growing and the second is because the number of children in age group 0-14 year is getting smaller. This is a general picture though and there are considerable variations in the types of area and NUTS3 areas.

The release from Eurostat tells us that rural areas are losing their young people faster than urban areas. It presents the populaton changes in 1158 NUTS3 areas of 26 member states (not UK) between 2001-2006. It takes the level of rurality of NUTS3 into account for three age groups - 0-14, 15-64, 65 and over. The changes mean variations in the population's composition.

The total population of EU27 has increased by 1.9% or 8,217,047 people with an increase of 9,708,045 people in the EU15 offset by a decrease in the new member states of 1,490,998 people or -1.4%. The 0-14 age group has decreased by 4.4%, the 15-64 age group increased by 1.9% and the over 65s by 8.9% or 5,961,157 people. A contrast can be seen between the 'old' and 'new' member states. In the new member states the 0-14 age group shrank by 14% and the over 65s increased by 5.3%. The over 65s in the EU15 increeased by 9.8%.

The types of area (TOA) analysis also show remarkable results. Ageing continues at a more pronounced rate in predominantly urban areas (46%), except in Spain and remained the same in Ireland and Sweden. Only 16.5% of the increase can be attributed to rural areas in EU27 where 21.4% of the population live. The combined effect of the two factors influencing population change mean that Germany, Greece and Latvia show a rapidly ageing population while France, Spain, Portugal and Italy, where over 20% of the population in rural areas is over 65, show smaller and even negative growth. In Bulgaria there has been a 5% population loss overall with a 10% loss in predominantly rural areas. It is also significant that in there areas the percentage of children fell by up to 17%. Also in Bulgaria where the number of over 65s fell by 4% they were not replaced by numbers from the working population.

The highest population gains at NUTS3 level were in Spain and Ireland with Guadalajara in Spain, an intermediate area, gaining 24.5% in population. At the other extreme Bulgaria and Germany decreased the most in population. The population of Kardzhali in Bulgaria, a predominantly rural area, decreased by 21%. The German areas were exclusively in the former East Germany. Barnim in Germany, an intermediate area, saw the highest increase in people aged 65 and over with an increase of 33.3% with Neubrandenburg on 33.2% and Potsdam on 32.9%. Vratsa, a predominantly rural area in Bulgaria, saw an decrease of 15.9% in the same age group. The highest increase in the over 65 age group was in Germany and the growth was not limited to the east but covered large areas of the west as well.

There were contrasts between east and west Germany and between north and south Italy. Only Berlin in eastern Germany grew in population size. Areas of northern Italy grew while the population of the south of Italy decreased.

No Change In Income Inequality

Statistics covering the years 2008/9 suggest that income inequality remained stable during that time. The focus of the analysis published by the ONS is on the effect taxes and benefits have on disposable income. For the years covered by the study income for the top quintile (top fifth) was £73,800 on average compared with £5,000 for the bottom quintile. The top fifth received 15 times more than the bottom fifth. It is slightly down on the analysis of the years 2007/8 when it was 16 times more. When the effects of taxes and benefits are taken into consideration it is a slightly different picture. The ratio between the top and bottom is 4:1 with average final incomes of £53,900 compared with £13,600. However, the redistribution of income affects households in different ways. The effects of taxes and benefits include benefits in kind, cash benefits, direct taxes and indirect taxes which may or may not affect people individually with some 'doing better' than others such as houses with children and retired households and the cash benefits and benefits in kind like health and education.

The inequality of income can be measured by the Gini Coefficient which expresses, as a percentage, the extent of inequality where higher values indicate higher inequality. In 2008/9 the Gini Coefficient for UK was 34% for all UK households. Over the past few decades the Gini Coefficient has increased a lot from 28% in 1983 to 34 in 2008/9. It has remained almost unchanged since 2005/6. In retired households it has fallen slightly from 27 to 26%. Changes in inequality can be related to changes in the overall economy with the Gini Coefficient rising and falling during periods of growth and recession and households at the top benefiting more from growth in incomes and investments while others tend to remain stable.

Woodland Area In UK In March

The Forestry Commission has released the latest publication giving statistics of woodland area, certified woodland area and figures relating to areas of new planting and restocking. The area of woodland in the UK at March 2010 is estimated to be 2.85 million hectares or 12% of the total land area of the UK. In England it is 9%, in Wales, 14% in Scotland 17% and in N.Ireland 6%. The Forestry Commission, or Forest Service in N.Ireland, owns or manages 0.81 million hectares.

Total certified woodland amounts to 1.29 million hectares and includes all the Forestry Commission/Forestry Service land. About 45% of all British woodland is certified. In 2009-10, broadleaved species made up most of the new planting area of 5,400 hectares (90%). Over half (51%) of the new planting was in Scotland, 43% was in England, 4% in N.Ireland and 2% in Wales. Conifers made up 76% of the 15,100 hectares of restocked woodland. Most (53%) of the restocking was on FC/FS land with 63% of all stocking taking place in Scotland, 18% in England, 14% in Wales and 5% in N.Ireland.

Certified woodland is assessed regularly against an agreed standard called the UK Woodland Assurance Scheme. Timber from certified woodland is marketed with a label showing it to be certified only if the timber follows a Chain of Custody from forest to retail outlet that is also certified. All certified woodland in 2010 is also under the Forest Stewardship Council (FSC) scheme and some is certified under the Programme for the Endorsement of Forest Certification (PEFC) scheme.

A National Forest Inventory Woodland Map will be published on 29 July 2010. The figures in the first release will be subject to revision as further results become available.

Shop Price Inflation Down To 1.8%

Shop price inflation fell to 1.8% in May from 2% in April according to the Shop Price Index (SPI) from the British Retail Consortium (BRC). Food inflation rose to 2.2% from 2% but non-food inflation fell to 1.6% from 2% in April.

A BRC spokesman said that the fall in the SPI happened despite big rises in some costs. Clothes and electricals are cheaper than last year but the rises in the price of oil are putting pressure on transport costs. Prices are being held down as customers still lack the confidence to spend. Tinned and packet food were the main causes in the rises in food inflation as falls in commodity prices, for products like coffee and wheat, still in the system are being awaited.

Deficit In Trade In April Up £0.1bn

The UK still has a deficit on trade in goods and services. In April the deficit was £3.3bn compared with £3.2bn in March. The deficit on trade in goods was £7.3bn but services still reported a surplus of £4bn compared with £4.1bn in March. Total exports of services fell by £0.1bn to £13.4bn and imports of services fell to £9.4bn.

Comparing April with March 2010 the main contributors to the difference were an increase of £171m from the export of cars, £130m from the export of chemicals and £125m from the export of consumer goods. There were decreases of £194m in intermediate goods and £201m in the export of aircraft. Sectors that made a significant difference on the import side were ships with an increase in value of £225m and £249m from the import of oil. Offsetting these were a decrease in the import semi-manufactured goods (other than chemicals) to the value of £392m and a decrease to the value of £159m from the import of consumer goods (other than cars).

The deficit on trade in goods with the EU increased slightly in April by £0.1bn to £3.3bn . Over the three months to April the deficit was £1.2bn smaller at £9.4bn. EU exports increased by £1.3bn to £34.4bn and EU imports by £0.1bn to £43.9bn.

As export prices fell by 0.2% and import prices increased by 0.2% in April compared with March, there was a decrease in the terms of trade. If oil is excluded, export prices fell by 1% and import prices fell by 0.2%. Over the quarter, there was a decrease in the terms of trade as export prices increased by 3.3% and import prices increased by 3.6%. Expoprt prices increased by 2.5% and import prices by 2.8% if the oil price effect is excluded. The balance of trade in oil in April was a deficit of £0.4bn. Oil exports were £2.7bn and imports £3.1bn. Over the quarter the balance of trade in oil was in deficit by £0.7bn. There was an increase in value of £0.6bn in exports to £7.9bn and an increase of £0.7bn in imports to £8.6bn.

Sales Monitor 3% More Than Last Year

UK retail sales were 3% up on May last year according to the BRC Retail Sales Monitor. Sales were also up 0.8% on a like-for-like basis. Over the quarter food was up 3.3% on the total basis and 1% like-for-like and non-food 3.5% and 1.3% respectively. All categories indicators for the quarter were 1.2% like-for-like and 3.4% in total.

In the non-food sector, the sunny weather helped outdoor, DIY and leisure as well as footwear and clothing. Consumer uncertainty about job and income prospects meant many items struggled even with discounts and promotions. Internet, mail order and telephone sales were 21.9% higher than a year ago after 15.9% in April. Food sales were improving after April.

The Director General of BRC said the World Cup has helped to increase the sales of televisions and that should continue as it gets closer and football merchandise sales should increase. Despite the uncertainty consumer confidence has gone up since last year.

Retail Volumes Fall By 1.2% In Europe

The volume of retail trade in both the euro area and the EU27 decreased by 1.2% in April 2010 compared with March 2010. The retail sales index for April 2010 compared with April 2009 was 1.5% in the euro area and 1.6% in the EU27.

The food sector in the euro area fell by 1.1% and 1.4% in the EU27 over the month to April 2010 and the non-food sector by 1.1% and 1.2% respectively. Total retail trade fell in 14 countries and rose in 5 given the data available. The biggest falls were in Poland -8.7%, Denmark -8.6%, Slovakia -3.6% and Spain -2.1%. The highest risers were Belgium with 1.8% and Germany with 1%.

Over the last year from April 2009 to April 2010 the food sector fell by 1.8% in the euro area and 2.7% in the EU27 and non-food fell by 1.1% in the euro area but rose slightly by 0.1% in the EU27. Given the national data available, among the member states, the index fell in 15 countries and rose in 4. Bulgaria and Lithuania both fell 11.7%, Denmark -8.3% and Latvia fell 7.7%. Malta's index rose by 8.7% and Belgium's by 0.7%. Statistics from Eurostat.

Industrial Prices Increase Across Europe

The euro area industrial producer price index rose by 0.9% in April 2010 compared with March. The EU27 rose by 1%. Prices increased by 0.6% in the euro area and by 0.8% in the EU27. Over the year to April 2010 industrial producer prices in the euro area went up by 2.8% and by 3.7% in he EU27.

Looking at the monthly statistics in sectors, total industry excluding energy increased by 0.5% in the euro area and 0.6% in the EU27. Energy prices rose by 1.9% and 1.7% respectively. Durables increased by 1% and 2%, non-durables by 0.1% and 0.2% respectively. Capital goods stayed to same in the euro area but increased by 0.2% in the EU27 and intermediate goods increased by 1.3% in both groups. Annual results show that total excluding energy increased by 1% and 1.1%. Energy prices rose by 7.7% and 10.2% respectively. Durables gained by 0.4% in the euro area and 0.7% in the EU27 and non-durables declined by 0.4% and 0.1% respectively. Capital goods fell by 0.1% in the euro area but rose by 0.1% in the EU27. Intermediate goods increased by 2.7% in the euro area and 2.6% in the EU27.

The were only two states in which decreases were seen, namely Latvia and Slovakia, both decreasing by 4.5%. Increases were recorded in all other states including Greece 9.1%, UK 8.5% and Malta on 16.7%.

Lowest Spend On M&A Since 1987

British companies spent £0.2bn on 10 acquisitions abroad in the first quarter of 2010 according to the ONS, £1bn less than the last quarter of 2009. It is the lowest value since records began in 1987. Expenditure on UK companies by UK companies was £1bn, £1.4bn less than Q4 2009. There were a total of 52 acquisitions. Foreign companies spent £14.3bn on 41 acquisitions in the UK during the quarter.

The 10 overseas acquisitions by British companies are included as they have values over £1m. The ONS used to use a threshold of £0.1m until recently and therefore there will be a discontinuity in the statistics. The 4 disposals of companies abroad by UK companies totalled £2.3bn and included the disposal of Rio Tinto Plc of Alcan Packaging Businesses for -£1.2bn and Rio Tinto Plc of Alcan Packaging Food American Division for -£0.8bn. Xstrata Plc disposed of El Morro SCM for -£3bn. The largest transaction in the UK by foreign companies was the acquisition of Cadbury Plc by Kraft Foods Inc of the US. One significant transaction in the UK by a British company was the acquisition of Standard Life Bank Plc by Barclays Plc for £0.2bn.

Perspectives On The Coalition's Programme

The Conservative/Liberal Democrat coalition recently set out it's programme for government in the Queen's Speech during the State Opening of Parliament. There were a number of responses to the Queen's Speech from industry.

The CBI agreed with the Coalition putting deficit reduction and securing economic growth at the heart of it's programme. The CBI called the speech ambitious and far reaching and said the Government has a sense of responsibility. They welcomed the NICs measures because the economy should be encouraged to create jobs, they were encouraged by the tax and benefits proposals and the reforms affecting the responsibilities of the Bank of England. The creation of an Office for Budget Resposibility (OBR) was welcomed as something the like of which they have been calling for some time to add some transparency and credibility. On planning they say that a new major renewal of infrastructure is needed but that the Government had some innovative ideas that may help local authorities accept new developments. They welcomed the Government's commitment to the climate change agenda and that emissions reductions targets could be reached if consumers and business improve energy efficiency. They support the Goverment's plan to increase and improve the diversity of education providers to help with failing schools and to give young people the knowledge and skills they need to be successful and they also support the idea of creating a single welfare-to-work programme tailoring to unique needs. The CBI believes the Government should give more scope in innovation and efficiency to the re-engineering of the health service and other public services without affecting the quality of services and that private sector providers deliver high-quality services within the NHS.

The FSB welcomes the plan to safeguard jobs, support the economy, simplify the tax system and the reversal of the NICs plan. It also welcomes the plan to support high-speed broadband Internet connections as more than half of small businesses rely on the Internet for up to 50% of their business. It would help, in particular, small firms in rural areas. The FSB will be looking into the proposals to introduce more flexible working. It also welcomes the proposals for a universal postal system.

The NFU saw the speech as a 'cuts' agenda containing numerous Bills aimed at facilitating the £6bn of cuts necessary to cut the budget deficit and restore economic growth. They noted a lack of Bills relating to agriculture and the food industry and the fact that Defra was not given any primary legislation to pilot for the next 18 months. The NFU were interested in proposals to reduce the number of quangos and whether they will affect Defra in any way. Also of interest were the green energy proposals for energy efficiency in homes and businesses. The proposed Decentralisation and Localism Bill is central to the drive to devolve greater powers to councils and local communities over planning. Regional Development Agencies may be replaced with Local Economic Partnerships if the propoals are successful. NICs proposals for employees may still go ahead even if the plans for employers and reversed. The NFU were also interested in the proposed commitment to hold a referendum if there are any more EU Treaty measures that directly affect UK sovereignty. Non-primary legislation of interest included the high-speed Internet connections proposals as it will include consideration of increasing availablity of broadband in rural areas. The NFU also noted the absence of proposals for flood provision and sharing the cost and responsibility for animal health.

The CLA welcomed the proposed Energy Bill saying it is a chance to improve energy efficiency. They warned that the proposed Decentralisation and Localism Bill could create more red tape around gaining planning permission. The CLA insists that rural businesses should not be left behind in the roll-out of high-speed broadband connections.

The TUC said that the Speech contained some important issues they could welcome like restoring the state pension link with earnings, cracking down on high-risk activities in the City and an the plans for green energy. They saw possible positive changes in extending flexible working rights to all employees and action to close the pay gap. However, plans to end initiatives to get young people into work, the abolishing of key public bodies and the resulting public sector job losses could only worsen the economic situation. They also emphasised that the focus on reducing the deficit is a mistake. The focus should have been on restoring growth and reducing unemployment.

The Cabinet Office has also announced that there will be an emergency Budget on 22 June that will set out a comprehensive and credible plan to eliminate the deficit over the course of the Parliament. The independent Office for Budget Responsibility has been created for best practice in fiscal transparency.