Great Britain

Great Britain and the Brexit

The back and forth in the Brexit process has caused great uncertainty in the UK in recent months. On the other hand, the British economy still achieved decent growth in the past quarter. With a plus of 0.3% compared to the previous quarter, the country not only avoided a recession sovereignly. GDP growth in the third quarter also slightly exceeded the quarterly result of the EMU and that of Germany probably even exceeded it quite significantly. And this despite the fact that the previous year’s growth rate of 1.0% was recently as low as it has not been for almost a decade: despite the threat of Brexit, the United Kingdom is far from being the worst performer among the G7 countries. A closer look, however, reveals the slowdown that the Brexit uncertainty has meanwhile left behind. In August and September, the economy shrank across almost all sectors. The relatively good…

Brexit – a didactic play for game theory

The course of the Brexit and the question of whether it should take place with or without a contract have long since abandoned rational considerations. In fact, it is only a matter of convictions and the will to assert one’s own convictions. Prime Minister Boris Johnson’s latest move is no exception. With the forced pause imposed on Parliament, Johnson is certainly reaching his constitutional limits, perhaps a little beyond them. In terms of negotiating tactics, however, it is a good move. His threat to the EU to actually implement a no-deal brexit has thus gained a great deal of credibility. This has reduced the British Parliament’s room for manoeuvre and its ability to thwart Prime Minister Johnson’s plans. For Johnson, the pressure to reach an agreement with the EU has actually increased in recent days. For example, government analyses gave clear warnings of impending shortages of food and medical supplies…

Why is Industry 4.0 so important for Germany?

Industry 4.0 refers to the entry into the fourth stage of the Industrial Revolution. This stage enables greater production flexibility by networking the entire value-added chain. Digitization, which has in the last decade crept into our everyday lives relatively swiftly, is to be comprehensively used in commerce in Germany and sharpen industry’s long-term competitive edge. By international comparison, German industry is certainly competitive at present. The companies have for some time bid farewell to cheap mass production, where Germany is no longer competitive, and relocated manufacturing to more cost-effective emerging markets. Among other things, Agenda 2010 and the consensus on modest wage increases agreed by the parties at the collective bargaining table in the Noughties kept unit wage costs stable in Germany at least until the end of the financial market crisis, while they rose appreciably in other Western industrialized nations and in China. Most recently, unit wage costs have…

Brexit worries for the UK economy are becoming increasingly obvious

Bad news from the UK industry: manufacturing output in April suffered its greatest fall of the last five years – a figure of minus 1.4 percent on the previous month was recorded. This is already the third consecutive fall. The decline was not quite as disastrous for the total industry, as oil production increased significantly. The export figures were also weak. Exports fell by almost six percent compared with the previous month and are now down more than seven percent on April 2017. The UK figures now take their place among the series of weak industrial and export data currently being reported from many EU countries for the start of the second quarter. Although exports throughout the whole of Europe are faltering, this setback is particularly harsh for the UK. Thanks to the robust international demand that was also fuelled by the weak pound, the impact of the forthcoming Brexit…

Slight acceleration in Q3, but UK economy still running “with handbrake on”

Although the United Kingdom may have reported a slight acceleration in economic growth for the third quarter just ended, at just 0.4 percent, the UK’s quarter-on-quarter GDP growth remains average at best. Indeed, in the first and second quarters of the year, Britain’s economic growth rate was the lowest of the world’s seven largest industrialized nations. Annual growth now stands at just 1.5 percent. In other words, UK growth has more than halved within two-and-a-half years – primarily, although not exclusively, due to the country’s impending exit from the EU. The drivers of the slowdown in the quarter just ended were the same as in the first half of the year: The services sector, the most important growth engine of recent years, is again only exhibiting moderate growth. In particular, consumer-related services such as retailing and gastronomy once again revealed their weakness. Consumer spending is therefore likely to have remained…