pro manchester CEO

Sunday Times and Croissants - CEO's update 4th September

There is something special about Sunday morning, the Sunday Times, hot croissants with honey and butter, excellent. This week-end Mary and I,  are in London, no need to trek out for the paper or food. Room service, how convenient, must speak to concierge at the Edge.

Headlines, from the Sunday Times, Gordon Brown believed the financial crisis would be over in six months, the Governor, the lender of last resort, did not really want to bail out the banks (moral hazard) and Fred Goodwin brought panettone to the Chancellor as a quid pro quo for the bail out. Now there is a deal maker.

Yes it is  Alistair Darling making the headlines with his new book, Back from the Brink, 1000 days at Number 11. He describes the Governor as stubborn and exasperating,  Gordon Brown as brutal and volcanic, management as chaotic and crisis ridden. Hardly reassuring and a lot to be said for a thirty year rule (cabinet papers) applying to political biographies.

Economic new this week a bit thin on the ground. Opinion polls and surveys are gloomy about household sentiment and manufacturing output. David Smith picks up the point with some cautionary words on trends in polls.

Back to the day job, on Tuesday, Mark Halliwell from Gateley called in to talk about the business angels projects and the work of CENBAR the centre for business angels research. Mark is an old friend and it is always good to see him.

Later in the afternoon a meeting with RBS to finalise the details of sponsorship for SME club. A tough two hour session with Rob Pailin and Mark Andrews, emerged bruised but fingers intact.

Wednesday, final draft of my discussion paper - Understanding the Balance of Payments - Forty Years of UK Trade 1970 - 2010, hoping to get this out later in the month. It is as exciting as the title
suggests, another riveting read, might go for the Darling book after all.

Thursday a meeting with the New Economy discussing options for a research paper into early stage VC finance. Jonathan Diggines in the room together with Mike Emmerich, great fun. Do not mention intervention but someone did.

Friday a meeting with the e-team to discuss the SME club launch followed by a visit to the dentist. The SME club launch is ten days away and we had another great session to move this forward. Some excellent video clips captured from the team. Final session looms. My thanks to all.

Later today, off to see the boys, girlfriend, partner and my new grandson. It will be a great day. The sun is shining. Dinner in Canary Wharf the plan.

Hope all is well with all,
More news next week, JKA

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Sunday Times and Croissants - CEO's update 21st August

There is something special about Sunday Morning, The Sunday Times, hot croissants, with honey and butter, excellent. Headlines from the front page, government ministers are to adopt problem families! What all of them? Another great idea from the Big Society. Putting the problematic with the dysfunctional could create all sorts of social mayhem. Good luck with that.

David Smith on the other hand explains why we are all so glum. It is the old misery index, the sum of inflation and unemployment ratios. Inflation CPI basis hit 4.4% and the unemployment rate hit 8%. Hence a misery index of over 12 compared to most of the years 2000 when the index was between 6 and 8. Are we all glum? Not me because I had two days off last week and played tennis.

It certainly was a big week for economic news. Inflation - up, unemployment - up, retail sales flat and borrowing figures disappointing. Further news from the MPC minutes, all of the doves are now back in the coop with noone voting for a rate increase. Things have taken a turn for the worse.

The unemployment figures are particularly bad. The claimant count is rising and signalling a return to recession. The July figure is almost as high as August 2008 and the start of the awful recession. There is a high (co-incident) correlation between the GDP stats and claimant count. A rise of around 100,000 in the third quarter, suggests negative growth in the second half of the year.  

The PSNBR figures confirm borrowing will fall this year but to around 130 billion pounds compared to the 125 billion OBR target. VAT the great success as revenues increase substantially whilst other hauls are stagnant. Ed Balls may call for a rate cut but it is the only facet of the fiscal hike that is working.

The Chancellor, confronted by the bad news of a recovery off track said, well what can we expect given the trends in the world economy. Excellent. Grab a fiddle and play those Roman tunes. The old songs are the best.

Back to the day job, we welcome two strong additions to the pro.manchester team. Emma as the new finance and admin manager has already begun to tighten up procedures. Gina as the new marketing
manager has a great task ahead. The day of the SME club launch nears, in fact it is D minus 23.

On Thursday, a quick meeting with Dr Brian Sloan, great economist and head of business and economic policy at the GM Chamber of Commerce. Another session with Clive Memmott CEO of the CoC and as I was leaving, I bumped into trio of CEOs including Angie Robinson, Tim Newns and Richard Guy. Another great day in the CEO spotter's diary. Four in the afternoon, result.

More time off for me next week, it is August and the sun drenched tumbleweed drifts around Spinningfields. Where has everyone gone? Will you ever come back again properly asks Rachel? All too soon, all too soon.

Hope all is well with all, More news next week,
John

John Ashcroft CEO pro.manchester.
Director Marketing Manchester, Visiting professor MMU Business School. Business Leadership Council. Council GM Chamber of Commerce.
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UK Economics : Is the march of the makers, a case of lions led by donkeys?

"Lions led by donkeys" is a phrase used to describe the British Infantry of the First World War and to condemn the generals who commanded them. The contention is that brave soldiers (lions) were sent to their deaths by incompetent and indifferent leaders (donkeys).

"The English Generals are wanting in strategy. We should have no chance if they possessed as much science as their officers and men had of courage and bravery. They are lions led by donkeys." According to the German Command Headquarters.

Strategy in business and in war is key. Which battles at which time, with what resource. SWOT profiling, constant benchmarking is key to success. Understanding this makes it more difficult to understand the present coalition strategy in expecting so much of the manufacturing sector and denying the contribution of the business, financial and professional services sector, especially banking,  to the British Economy

The march of the makers, rebuilding the workshop of the world to finance the big society is  a battlefield folly. The march is faltering, the trade deficit continues to expand. The analysis of forty years of UK trade amply demonstrates the UK needs a strong service sector to finance the trade in goods deficit.

According to a recent paper by Yiping Huang and Bijun Wang, 2011 China’s manufacturing sector accounts for 41% of output compared to just 12% in the UK. With a world average of 13% China’s relative share is 3.2 compared to the UK’s 0.9. That’s tough competition.

China’s revealed comparative advantage for manufactures is 1.13 compared to the UK’s 0.79. A larger competitor, tough competition, with a significantly higher competitive advantage will provide a difficult challenge.

In financial services, the reverse is true, China’s revealed competitive advantage is 0.03, compared to the UK’s 3.01. The world average is just 0.5. The UK is the strongest player in the world of exports in financial services with the highest revealed comparative advantage. So why not promote and support the sector instead of suggesting an evil imbalance exists within the economy?

Why place so much hope in an ill equipped manufacturing sector in trend decline long before Gandhi promoted homespun? The renaissance just will not happen. Play to your strengths may sound facile in terms of strategy but it should be something even donkeys can grasp.

Notes
The revealed comparative advantage was first proposed by Balassa (1965).The comparative advantage of a country's industry could be revealed by the ratio of the share of an export sector's exports in total exports to that share  for the world. Balasa, Bela 1965 Trade Liberalisation and revealed comparative advantage" Manchester School of Economic and Social Studies Bulletin Vol 33 No 2 pp 99 - 117

Yiping Huang, Bijun Wang Chinese Outward Investment: Is there a China Model. China & World Economy Volume 19 No 4 Jul - Aug 2011

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.

China's Foreign Direct Investment : which way does the Renminbi river flow?

Which way does the Renminbi river flow, is it east or west?  An analysis from US based heritage.org into China’s global foreign direct investment between 2005 and 2008 provides interesting reading.  

We have long argued China’s FDI is determined by three issues, access to markets (ATM), access to technology (ATT) and access to resource (ATR). By far and way the greatest determinant is access to resource.

Consider that Australia is the largest single country destination for China’s direct investment according to heritage.org using data from a report first by Scissors [2011]*. Investment is valued at $34 billion and 15% of the total, according to the data.

This investment could be motivated by the market of some 23 million people (ATM) , or possible access to technology (ATT) represented by boomerang flight dynamics perhaps. Far more likely is access Australia’s thriving resources sector particularly minerals and petroleum. Australian coal, liquefied natural gas, iron ore, copper, diamonds, zinc and many other minerals provide the essential incentives for the FDI direction. In 2006–07, over 80 per cent of Australian output was exported, accounting for approximately 49 per cent of total goods and services exports.

Nigeria, Iran, Brazil, Kazakhstan, Canada, Indonesia, Algeria and Venezuela all rank above Britain in the foreign investment rankings. China invests almost twice as much in Nigeria as it does in the UK mainland. Unless copper deposits in Cornwall or zinc in the lakes are discovered, the UK will remain outside of the top ten destinations for Chinese investment.

China is the second largest economy in the world growing at 9% per annum. With a population of 1.3 billion it struggles into the world top 100 in GDP per capita parameter. With $3.2 trillion of reserves, it has the financial resource to lock up the finite resource of world commodities and continues to do so at a vast rate. Almosty eight per cent of investment is into the food, energy and metals sectors.

The challenge for the growing China economy is to secure resource. It is acquiring and developing the technology. It already has the market, the export growth model abandoned post 2008 in favour of domestic expansion. Europe and the West may yet pay for the occupation of Peking. The price is lower growth and higher inflation as demand for resources grows in the East at the expense of the West.

So which way does the Renminbi river flow. The renminbi flows East, West, North and South but the resources flow back just one way. JKA 2011

Scissors Derek, 2011 China's Investment overseas in 2010 Heritage Foundation.

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.

Inflation above target, the governor writes another letter, we have the real version!

Dear Chancellor, The office for national statistics has published data showing that CPI inflation was 4.4% in July. As it is three months since I last wrote an open letter to you, and CPI inflation remains more than one percentage point above the target, I am writing a further open letter to you on behalf of the MPC. Please add this to the other eight letters I have already written.

The letter explains why inflation has moved away from target and why we intend to do nothing about it. Really it is not our fault, you put up VAT, oil prices have increased beyond reason and the Chinese have stopped shipping all those really cheap products that deflated the goods inflation in the past. [Chart 2]. Yes, that an the depreciation of sterling by 25%.

If all of the items that have pushed inflation above or below target are stripped out, the MPC would be able to claim the 2% target rate is being achieved on a month on month basis. RPI and RPIX inflation rates have hit 5% but CPI-DGI ie domestically generated inflation is showing no signs of an increase and our preferred measure CPI-MK, (named after myself) confirms the return to target has already been achieved.

As set out in the August Inflation Report, it is likely that CPI inflation will rise to around 5% in the coming months, boosted by increases in utility prices and reflecting the continuing effects of temporary factors, best described as anything above the 2% target rate.

Inflation should fall back through 2012 assuming you don’t put VAT up again and other prices begin to fall sometime soon.

Of course, there are those who would point out that CPI service sector inflation has averaged 3.6% for the last sixteen years and the 2% target rate has only been achieved by an extremely flattering 1% rate of goods inflation. This of itself a function of a relatively high sterling exchange rate, an undervalued Renminbi and cheap products from the Asian block. Such facts are unhelpful in our model understanding of the way the world really works.

I am copying this letter to the Chairman of the Treasury Select Committee. Signed the Governor.

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.

UK unemployment data : Is the UK heading back into recession?

This week has been a horrible weak for economic news, retail sales are flat, inflation CPI basis has risen to 4.4% and the minutes of the MPC meeting in August reveal the doves are back in the coop with no one voting for an increase in base rates.

Worse still the unemployment figures were revealed on Wednesday. The claimant count increased by 37,000 to a level of 1.564 million. This is the largest monthly rise since April 2009 and matches the level of August 2008, the beginning of the dreadful recession.

Last month the claimant count increased by 31,000 but unemployment LFS basis actually fell allowing some to dismiss the alarm signal as noise, “recording different things at different times”.

The latest release allows for no confusion in the message. Unemployment LFS basis in the three months to June increased to 2.494 million from the 2.455 million in the three months to March.

Employment in the three months to June increased by 220,000 but at a much slower rate than earlier in the year.

The claimant count gives cause for greater alarm. The unemployment measure provides a valuable signal as a coincident indicator to trends in GDP. As the chart demonstrates, inverting the claimant count and lagging by one quarter provides a high correlation and signal of trend.

If the claimant count increases at a similar rate over the third quarter, the message is clear, growth is off track, the recovery is slipping away and the UK is heading back into recession.

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.

Sunday Times and Croissants - CEO's update 14th August

There is something special about Sunday Morning, The Sunday Times, hot croissants, with honey and butter, excellent. The headlines from today’s Sunday Times suggest the PM is to make life hell for gangs. Great - but is this really the way to deal with the Metropolitan police?

According to a recent paper from the Centre for Economic Policy Research, periods of austerity and budget cuts go hand in hand with social instability and violence. Thatcher knew this. One of the first acts of the Conservative administration was to increase the resources and pay of senior officers in the police force and the army. Ominous but at least there appeared to be a plan.

Cameron’s policy to cut back amongst the met is contra cyclical at a time of augmented social disorder. Bringing in a super cop from the US merely adds insult to redundancy. The use of casual statistics is misleading. To discover that less than a third of the police are on the front line at any one time, is to discover the metrics of a three shift system. We are also told we export more to Ireland than we do to China. So what? We didn’t go to war (twice) with Ireland for the right to export narcotics. This is no time to bash the met or the makers.

This week the ONS delivered more bad news for manufacturing and the trade sector. The march of the makers, rebuilding the workshop of the world, rebalancing the economy had a further set back as manufacturing and export growth slows. The external deficit was worse than anticipated in the Quarterly Economics Review. Keynes would say, when the facts change, I change my opinion. The Bank of England takes a different line. Mystified as to why the trade deficit has not reacted to Sterling’s depreciation, for the old lady, when the facts change, it is time to challenge the facts. Both export numbers and the GDP data, must be wrong, they appear not to fit the model. A great box in the inflation report explains.

Yes it’s the inflation report again. I love the one hour web cast of the Governor and the Bank of England team as they hold a press conference before the top economics journalists. The Governor appears like a disgruntled grandfather, dealing with irritating juvenile questions from young family members across the Sunday dinner table. It can be quite amusing, top names tremble as the Governor demonstrates disdain. Inflation will hit 5%, rates may stay on hold for as much as two years, the letter to the Chancellor explaining the overshoot will be sent by e-mail auto responder and the MPC is to meet quarterly. Excellent.

Back to the day job, Monday and a meeting with Nigel Collier from SkyLab about the e team. Tuesday and a brand meeting to discuss alternate names for the SME club, my thanks to Lee Herbert from Blue Monkey and Simon Calderbank (Studio North) for their help and persistence.

Tuesday evening and news of the disturbances in Manchester filters through. We watch the helicopter hover over the city and read the Twitter feeds. Structured criminality behind a feral facade, the evident explanation of events in the centre. Zero tolerance the only response. Respect to all in the front line and the clean up. Inadequate condolences to all those affected by the violence.

The Manchester spirit demonstrated by one of our directors, SKIP, (Steve K, the big name in IP), nothing would menace his pilgrimage to the Mark Addy for the Tuesday night gastro pub evening.

Wednesday morning, a finance committee meeting followed by a meeting with Chris Froggatt at Ford Campbell. Great corporate finance company with a focussed business plan. Thursday a meeting with the Steering Group at Shoosmiths. It’s alway good to present to so many seniors in any of the member companies.
 
Friday and a day off to meet up with the grandchildren. Lots of photos up on Facebook. Strange to be called a grandfather but really stunned when my youngest son is referred to as Dad. Spooky.

Hope all is well with all, more news next week,
John
John Ashcroft CEO pro.manchester.
Follow on Twitter @jkaonline, or join me on LinkedIn and Google+ @John Ashcroft.

* CEPR Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009 Jacopo Ponticelli , Hans-Joachim Voth

Sunday Times and Croissants - CEO's update 7th August

There is something special about Sunday Morning, The Sunday Times, hot croissants, with honey and butter, excellent. Last Sunday I received a letter from America. Well, it was an e-mail from Angie Robinson in DC, a sort of Washington Post and Waffles. The latter a reference to breakfast, not to the literary style of the new CEO of Manchester Central of course.

Why, Angie asked, had I made no mention of the US debt crisis, with the nation perched on the edge of financial disaster, Angie and Drew, from Marketing Manchester, were on the spot enjoying the tea party. I had ignored the major issue. Why so? The answer, as an avid fan of West Wing, I had seen it all before. Sooner or later, Ged Bartlett marches on Capitol hill and the republicans retreat. West Wing season 5 - Shutdown. And so it proved by midweek, the crisis was over. The deadline was met. The debt ceiling had been raised yet again. Life goes on. I sort of knew it would.

Back in the UK, my deadline for the Economics Quarterly loomed. In purdah for virtually three days, the 44 page document finally went to the printers on Wednesday. Released next week, the title is of a recovery off track and a headline GDP growth rate slashed to just over 1%. The march of the makers rebuilding the workshop of the world just another Big Society trope.

Since then both the Office for Budget responsibility and the Bank of England have hinted of a downgrade to their own forecasts [both Robert Chote and Charlie Bean will be with us in the early Autumn]. Paul Krugman blogged on Osborne delusions finding solace in fantasy. The wolf is at the door and Mr Osborne thinks it is the confidence fairy. He said it not me.

Another e-mail on Sunday, this one from David Smith who took great exception to my reference that he had bought the official ONS line on Q2 growth hook line and sinker. David thought the reference was
silly. This from an economist still waiting for depreciation and the J curve to improve the balance of payments. Excellent. I apologised of course, blaming the croissants.

Thursday, the markets crashed as fears of a double dip recession, US debt and prospects for the Southern states of Europe returned to top of mind. You know things are bad when Robert Peston appears on Newsnight. The day job, an end is nigh, sandwich board in Threadneedle street, cast aside for the evening.

Markets crashed, S & P down graded the US debt below that of Guernsey and the Isle of Man. Vince Cable and the Chancellor crowed about safe havens as ten year gilts fell below 3%. Safe haven maybe but capital flows are not reflected in an undervalued currency and the exit of US funds from the UK banking sector.

What will happen in Euroland? Sooner or later the Germans will have to put more into the European Financial Stability Facility, back a Euro bond programme and invest in some olive bonds from Italy and Spain. The message to markets has to be substantial. Markets love to nibble and will wage war on the weakest in sequence. Yields have risen to over 6% in Italy and Spain. What is it about 7% that is so terminal?

Enough of world affairs,Thursday and a meeting with Clive Memmott CEO of the GM Chamber of Commerce. Friday and a brain storming session to discuss the name for SME club. Six weeks to launch, no name and no web site is something of a challenge. A great piece in the FT last week about e-commerce quoting Zynga and others. The key message this is interactive e. The old formula get it right then go is replaced by the more dynamic, go then get it right. I copied the article to Rachel and the team to offer some reassurance and relief.

Good session with the brain storm, they all liked the use of the word real. Ian Brodie later put the boot in to that. Lunchtime and a meeting with David Sharrock and Adam Jupp from MEN to discuss progress on SME club. This followed by a meeting with Fudge, cool creatives from Bolton and latest recruits to the e-team.

Saturday and the rugby season opens. Hurray. Always good to see England beat the Welsh but who on earth decided to play the team in an All Black Strip. Over eighty thousand supporters, the majority in
white strip almost sang somewhere over the rainbow, instead of swing low in the confusion. For the world cup the RFU should go further and prepare an England haka, a sort of cross between Morris dancing and march of the Icenae.

The diary is thinning out so every chance to get forty years of UK trade written up as a discussion paper. Will meet up with the kids this week, Helen is back from Ireland and Pete is up with the latest Ashcroft derivative.

Hope all is well with all, more news next week,
John
John Ashcroft CEO pro.manchester.

Sunday Times and Croissants - CEO's update 31st July

There is something special about Sunday Morning, The Sunday Times, hot croissants, with honey and butter rather special. I do like croissants but not as much as Steve Hilton, special adviser to the Prime Minister apparently. Hilton loves cycling and croissants and thinks nothing of cycling for 20 km just to collect fresh croissants when on holiday in France.

Hilton is one of those blue sky thinkers, who should be denied time on his own. Apparently Hilton thought up the “Big Society”. Described by Rachel, his wife as the BS, his latest ideas include abolishing maternity leave and job centres to stimulate productivity. Excellent.

I suspect the Steve Hilton’s brain is full up as described by Jonathan Leake, the Science editor of the Sunday Times on page one, I am beginning to think mine is. Not sure I am at the cognitive peak of human evolution as described in the article. Each to their own peak and not for me to say.

It’s the end of July and Manchester becomes something of a ghost town as August approaches. For those of us remaining, it’s a chance to catch up on projects. I am about three behind at present, China, impact on the world economy, and forty years of UK trade deficits are in my head. I am like a pregnant elephant ready to release after a prolonged gestation period. I guess my brain is full as Leake suggests

Talking of China, the tragic Wenzhou rail crash led the critics to suggest this is a clear demonstration of too much growth too quickly in an unsustainable scrabble for expansion. Is this really so or is the accident no more evidence of a growth plan off the rails, than the Potters Bar rail crash, a representation of capitalist decadence and the end of Western hegemony.

Much mirth in the office on Monday as a call came in from BBC Five Live asking me to speak on Radio Beeb on Tuesday about the GDP figures. It will have to be a very enticing offer they cautioned. I was quite keen until I realised Five Live was a morning slot and for me a contradiction in terms.

On Tuesday, the eagerly awaited GDP figure for the second quarter. Growth year on year just 0.8%. Growth is just too low at this stage in the recovery. The march of the makers, rebuilding the workshop of the world, has been crippled by reality.

Joe Grice Chief Economist of the ONS is beginning to sound like a sales director missing targets and clinging to any excuse of failure to get results. The second quarter figure had been hit April’s warm weather, the extra bank holiday and the Japanese Tsunami. Joe has previously said, in the final quarter of 2010, there was too much snow and in the first quarter 2011 not enough snow. Thank heavens it didn’t snow on the day of the Royal Wedding. More BS logic but David Smith bought in!

Good meetings during the week, with Sue Woodward from the Sharp project and David Edmundson-Bird from MMU and the Manchester Digital agency. Dave is joining the e-team management group a great asset, as would be anyone with the name of a character from Sesame Street.

Thursday a presentation to the RBS Marketing team re sponsorship of SME club and in the afternoon a meeting with UKTI anxious to understand where Manchester is (on the financial and professional services map). Time Newns in his new role as Chief Executive of MIDAS led the party. RBS Global banking services did most of the talking.

Friday and I find myself on a panel with Jim O’Neill from Goldman Sachs and John Early Chairman of the Business Leadership Council. Jim is chairing the economics advisory panel to the LEP and also a committee reviewing progress of the Manchester recovery plan.

A great debate ensued amongst a select group of Manchester key players. The group included Nick Johnson, who adds momentum to the idea of dress down Fridays. 

Jim later agreed to present at the Manchester Business conference our news style show hosted by Kirsty Wary and Gavin Esler in March. If you don’t get to Davos get to the Point. It is going to be a great event.

The diary thins out in August so every chance to visit the grandchildren soon. Just have to get the Economics Review off to the printers before I do!

Hope all is well with all, more news next week,
John
John Ashcroft CEO pro.manchester.
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UK GDP - if the recovery is on track, I am on the wrong train!

On track delivering the growth plan to rebalance the economy. I have just been watching the Faisal Islam interview with the Chancellor of the Exchequer and everything is OK. The economy is rebalancing, the supply side is improving, the Chancellor is not for turning because there is no alternative. The borrowing figures are on track and growth in the British Economy is welcome.

If this recovery is on track, then I am on the wrong train. Growth in the second quarter was just 0.8% year on year compared to 2.5% in the third quarter of 2010. The economy is slowing and it is difficult to see the impetus to growth in the second half of the year. Slow growth is already impacting on government borrowing and the targets for the year will be dificult to achieve.

The UK economy has grown by just 0.2 per cent (quarter on quarter), with the Japanese tsunami, Royal Wedding, and April bank holidays all having an impact, according to the ONS.

“The latest gross domestic product figures for the second quarter of 2011 suggest the economy has grown by just 0.2 per cent following an increase of 0.5 per cent in the first quarter of 2011. The April bank holidays, the royal wedding, and the effects of the Japanese tsunami, all had an impact on the growth rate. These estimates are broad brush and illustrative. There can be no certainty as to the impact of the special events and there may be other factors at play," the ONS said.

The ONS is beginning to sound like a beleaguered sales team under pressure to hit targets. Too hot, too cold, too wet, too dry, Christmas too early, Easter too late. Missed sales targets that’s our fate, the old mantra.

According to the ONS in Q4 there was too much snow, in January not enough snow, April was too warm and the bank holidays and the Royal Wedding hit the growth figures in the second quarter. Heaven knows what would have happened to GDP if it had snowed on the day of the Royal Wedding.

The march of the makers, rebuilding the workshop of the world, is beginning to slow with manufacturing growth up by 2.3% compared to a high of nearly 5% last year. Service sector growth was just 1.2%. We are no longer a nation of shopkeepers, we will become a nation of online traders. This recovery is not on track, it is slowing badly. The economy is not rebalancing, it’s slowing down.

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The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University.