Tuesday, February 28, 2017

UK to boost funding for AI and robotics research

The UK government is set to announce funding for artificial intelligence (AI) and robotics research as part of the government’s strategy to help UK businesses maximize investment and trade opportunities.

Culture Secretary Karen Bradley is expected to make the funding announcement on Wednesday as part of the British government’s digital strategy.

The research, which will be carried out by top British universities, will have a fund of £17.3 million. The grant will come from UK’s Engineering and Physical Sciences Research Council.

The funding support came after recent research revealed the potential long-term impact the AI and robotics field could have on UK’s economy. Accenture, last year, published a report projecting that AI could contribute up to £654 billion to the British economy by 2035.

BenevolentAI CEO Jerome Pesenti, who previously served as chief data scientist at IBM and Computer Scientist Dame Wendy Hall, who is currently a professor at University of Southampton, have been commissioned to review the status of UK’s artificial intelligence sector. The review aims to pinpoint areas of opportunity for UK’s growing AI research industry.

In a statement, Professor Dame Wendy said she was looking forward to exploring collaboration opportunities for the government and the AI sector. She notes that British scientists, researchers and entrepreneurs have been at the forefront of AI research and development.

Demand for British expertise in the artificial intelligence field has skyrocketed in recent years.

In 2014, search giant Google acquired DeepMind, a London start-up that invented a neural network that is capable of that mimicking the short-term memory of the human brain, for $400 million. In 2015, Apple paid $250 million to acquire UK-based start-up, VocalIQ, which specializes in machine learning that enables computers to understand natural human language. Microsoft likewise shelled out $250 million to buy SwiftKey, the London-based developer of a software keyboard with advanced predictive abilities.

A spokesperson for the UK’s Department for International Trade said the government is looking to help UK businesses make the most of trade and investment opportunities through targeted support and business matching.

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Wednesday, February 22, 2017

UK On Track To Borrow Less Than Projected

UK on track to borrow less than projected

The UK government is on track to borrow less than was earlier projected for this financial year, the Office for Budget Responsibility (OBR) said following the publication of the joint statistical bulletin on public finances by the Treasury and Office for National Statistics.

According to the latest data from the Office for National Statistics (ONS), the British government borrowed a total of £49.3 billion between April 2016 and January 2017, the lowest since 2008.

The financial year-to-date borrowing is 22 percent lower compared to figures from the same period in 2015-2016.

The OBR noted that if the government continues to keep borrowing low, the total loaned amount for the year ending March 2017 would be £56 billion, which is £12 billion less than the OBR projected in November. The OBR projected the government’s borrowing to reach £68.2 billion.

The OBR’s mandate is to examine and report on the sustainability of UK’s public finances. As such, it regularly issues analyses on data published by the ONS.

Meanwhile, UK’s finances recorded a £9.4 billion surplus in January, £300 million more than the same period last year.

The month of January typically results in surplus for public finances because it is the time of the year when a large portion of outstanding income taxes are paid. January tax collections have likewise been boosted by corporation tax receipts, but the ONS recently made changes to account for corporation tax payments made throughout the year. This month’s numbers are the first to reflect this change.

For its part, a spokesperson for the Treasury said that it remains committed to returning the public finances to balance, adding that the Treasury is building on their progress over the last six years in bringing down the deficit from 10 percent to 4 percent of the GDP.

Lower government borrowing this year is good news to UK finance minister Philip Hammond as it gives the chancellor some extra wiggle room in the budget, particularly for government priorities like the National Health Service and social care. Hammond is slated to present the budget on March 8th.

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Tuesday, February 14, 2017

UK Inflation Hits 30-Month High

Consumer prices in the United Kingdom (UK) rose 1.8 percent last month hitting its highest level since June 2014, according to the latest figures released by the Office for National Statistics (ONS).

Annual inflation as measured by the Consumer Prices Index (CPI) nudged 0.2 percent higher in January from December’s 1.6 percent. It is the fourth straight month that the CPI has gone up and pushes inflation to its highest point in two and a half years.

The ONS cited rising fuel costs and higher food prices as the two main drivers for the jump.

Analysts were projecting a 1.9 percent rise, but upward inflation pressures were tempered by falling clothing and footwear prices, which declined lower than they did the year before.

January’s inflation figures nudges the rate closer to the Bank of England’s 2 percent target. Forecasters are expecting UK Inflation to rise significantly in 2017 as the pound continues to shed its value against the dollar and the euro, making goods from abroad more expensive to import.

Earlier this month, UK’s central bank said it expects the inflation rate to rise 2.8 percent in the beginning of 2018.

In a separate report, ONS figures showed that prices paid by British manufacturers for fuel and materials ballooned at an annual rate of 20.5 percent in January, marking its sharpest surge since September 2008. This resulted in a 3.5 percent increase in the prices of goods leaving UK factories.Commenting on the rising cost of living in the UK, a Treasury spokesperson said that the government understands the concerns of British families, adding that it is cutting taxes for workers and has frozen duties levied on fuel to help everyday costs low.

Commenting on the rising cost of living in the UK, a Treasury spokesperson said that the government understands the concerns of British families, adding that it is cutting taxes for workers and has frozen duties levied on fuel to help everyday costs low. The move will save the average British driver approximately £130 a year, the spokesman added.

Meanwhile, consumer inflation as measured by the Retail Prices Index (RPI), which factors housing costs, climbed to 2.6% last month from 2.5% in December.

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Tuesday, February 7, 2017

UK House Prices Dip For The First Time In 5 Months

House prices in the United Kingdom (UK) declined 0.9 percent in January following a 1.6 percent rise in December, marking the first monthly drop since August of last year, mortgage lender Halifax reported in its latest House Price Index.

UK homes now sell at an average price of £220,260, pegging the annual growth rate in the last 3 months leading to January to 5.7 percent from December’s 6.5 percent.

Halifax noted that the shortage of houses available for sale will keep big price drops in check but cautioned that slower economic growth and a weaker spending power on the part of house buyers could dampen demand for housing, resulting in slower annual house price growth for 2017.

Other forecasters are also projecting the UK housing market to soften in 2017. Pantheon Macroeconomics’ chief economist Samuel Tombs said that while drops in month-to-month pricing are common, he pointed out that price growth for the housing market has fundamentally weakened since the June vote.

In its annual forecast, Halifax said UK house prices will grow by a mere 1 to 4 percent in 2017, with London house prices falling. This year’s projected price growth is significantly lower compared to 2016.  The firm’s economists cited the projected slowdown in economic growth, potential surge in unemployment and pressure on household incomes as the main reasons for the overall slump in UK’s housing market, which experienced growth for several years prior to last year’s referendum.

Financial analysis firm IHS Global Insight, commenting on Halifax’ report, said that price gains this year will hit its ceiling at 3 percent citing mounting caution on household spending and widening house price-to-earnings gap as main factors affecting overall prices.

Meanwhile, Halifax said that a total of 1.2 million homes were sold last year, up 0.4 percent from the year before. The company said its figures show that first-time house buyers in the UK grew by an estimated 7 percent to 335,750 during the last year, marking its highest level since the beginning of the global financial crisis in 2007.

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Wednesday, February 1, 2017

Consumer Optimism Rises As Robust Jobs Outlook Boost Household Spending

British households opened 2017 in a bullish mood as the recovery in business optimism and a positive jobs outlook lifted consumers’ confidence to spend for both discretionary and essential items.

Deloitte, in it’s latest quarterly survey, found that five of its six gauges of consumer confidence went up, even as overall confidence trended lower in the last three months of 2016 compared to the same period in 2015. It said there was a significant increase in essentials spending in the months leading to Christmas. Spending on discretionary items likewise trended higher.

UK citizens also remained optimistic about their career and employment prospects amid a rise in real incomes and a relatively resilient jobs market, as consumers dismissed negative projections about the British economy following last year’s referendum.

Ian Stewart, Deloitte’s chief economist, noted that last year’s Brexit vote has not impacted consumer confidence on jobs outlook, particularly among the younger segment of UK workers.

Stewart attributed the rise in consumer confidence to real wage increases, high employment rate, credit growth and business optimism, noting that these factors kept the consumer confidence index stable.

Despite the upbeat results, Deloitte warns that the numbers may not hold up in 2017 as a weaker pound may push up prices resulting in higher inflation, which could adversely impact consumers’ overall purchasing power.

Elsewhere, analysts expect the Bank of England to upgrade its growth forecasts this week following a better-than-expected performance in the last three months of 2016. Observers are predicting the 2017 forecast to jump to 1.7 percent, from 1.4 percent in November. In August, growth was pegged at a mere 0.8 percent. This week’s revision will be second time in three months as the UK economy continue to defy expectations.

Despite the upward tend, Mark Carney, Bank of England’s Governor, cautioned that UK growth was becoming too reliant on consumer spending. He warns that UK’s consumption-led growth could lose momentum and prove “less durable,” pointing out that consumption growth would eventually overtake earnings growth.

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Wednesday, January 25, 2017

UK Retail Sales Decline in December

Retail sales figures in the United Kingdom for the month of December fell 1.9 percent from the previous month, according to the latest data released by the government.

Sales across all main retail sectors went down, with non-food stores accounting for the biggest contraction, the Office for National Statistics (ONS) said.

The latest retail sales figures represent the heaviest monthly fall in over four and a half years.

Some analysts attribute the December plunge to heavy Black Friday discounts given by retailers in late November. They point out that November figures were boosted because of the discounts and that December numbers slumped because shoppers lost the incentive to shop.

Also severely impacted by the shopping decline were household goods, footwear, and clothing.

Experts had forecasted a much smaller monthly decline at 0.1 percent.

With inflation figures showing an increase in retail prices in December, analysts are expecting the rest of the year to chart a downward path as higher prices are bound to negatively impact disposable income and consumer spending.

Compared to last year, however, UK retail sales in December are actually up 4.3 percent, and while main sectors saw their sales drop, smaller retailers like butchers have reported sizable boosts in sales during the holidays.

In related news, the ONS found that online shopping in the UK in December rose with consumers buying roughly £1 billion worth of goods and services from ecommerce websites and apps, representing a 21.3 percent rise compared to the same month last year.

Bank of England governor Mark Carney, this week, said that household spending remained strong, but cautioned that the UK economy was becoming a bit too dependent on consumer spending for economic growth.

The UK economy is among the world’s fastest-growing advanced economies in 2016, but the Bank of England expects growth to slow this year as higher prices and a weaker currency will likely adversely impact consumer spending in the near term.

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Friday, January 20, 2017

IMF upgrades UK’s growth forecast for 2017

The International Monetary Fund (IMF) has upgraded its growth forecast for the United Kingdom (UK) this year, citing a better than expected economic performance since the June referendum.

The IMF noted that economic activity in the the country has “held up better than expected,” prompting the monetary body to revise its 2017 forecast from 1.1 percent to 1.5 percent.

The monetary body’s updated forecast closely mirrors projections made by the Bank of England and the Office for Budget Responsibility, which both see the UK economy edging higher by 1.4 percent this year.

IMF’s growth estimates for the global economy remains unchanged at 3.4 percent in 2017, and 3.6 percent in 2018.

Commenting on the updated projections, a Treasury spokesperson said that the fundamentals of the UK economy are robust, adding that the country was the fastest-growing major advanced economy in 2016, and that the revised figures from the Washington-based fund confirm such assertions.

The latest figures from the Office for National Statistics shows that the country’s GDP grew by 0.6 percent in the third quarter of 2016, while surveys suggest growth of 0.5 percent in the last three months of the year, nudging UK’s full year GDP growth to approximately 2.1 percent.

The World Bank, meanwhile, has downgraded its growth forecast for the UK. It expects the UK economy to grow at a rate of 1.2 percent, down from its previous estimates of 2.1 percent.

The World Bank’s numbers are also broadly supported by the forecasts published by the Organisation for Economic Cooperation and Development, noting that reduced growth prospects and increased volatility, as a direct consequence of the June vote, will mitigate the country’s growth potential in the near term.

Several other countries, including the United States and China, also saw their growth forecasts upgraded. The US economy is projected grow by 2.3 percent this year, slightly up 0.1 percent from a previous forecast of 2.2%. Growth figures for China were likewise updated to 6.5 percent from 6.2 percent.

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