- UK house prices see double-digit rise
Data from UK mortgage provider Nationwide suggests that UK house prices have risen by 11.1% on average from this time last year. This has led some to suggest that the UK is experiencing a bubble in its housing market, which poses a significant threat to the country’s financial stability. Government schemes to assist first time buyers such as ‘Help to Buy’ have been held accountable by some for the rise, although others have dismissed this, claiming that the increase in house prices is a consequence of the improving economic outlook for the UK.
- Australia: End of the boom
The economic forecast for Australia has been revisited. Having seen through the past 23 years with any period of recession, the only country in the developed world to have done so, Australian fortunes could be set to turn. Rapid growth in the Chinese economy over the past two decades has seen a surge in demand for Australian mineral products, forming the backbone of the country’s rapid ascent. With Chinese industrial growth slowing and its economy moving towards consumer driven growth however, the impact on Australian mining has already started to show. Unemployment has risen to 6% as the high value of the Australian dollar makes its manufacturing exports expensive, and the falling prices for commodities such as Iron Ore causing many of the big global mining companies to slow down or stop production.
The Australian Liberal-National coalition government led by Tony Abbott has proposed a budget with a cut in government services in order to prepare for the expected change in Australian fortunes. This has caused a significant amount of unrest, particularly with younger Australians who have yet to live through any severe economic times. Previous Australian governments have been accused of spending the fruits of the commodities boom whilst it came, with Australia having one of the lowest income tax rates in the industrial world at 27.5%. Abbott has warned that if his budget does not passed the opposition controlled Senate then Australia’s Triple A credit rating could be threatened, increasing the amount that it would have to pay for its borrowing.
- Block Juncker to save real democracy in Europe
In the aftermath of the European elections, the decision as to whether the former Luxembourg Prime Minister Jean-Claude Juncker should be made European Commission president is still hotly debated. Having been nominated as the candidate for the role by the largest grouping in the European Parliament, the EPP, Mr. Juncker’s supporters argue that he has a clear mandate to take on the role, having been “chosen” by the voters of Europe. The problem however is that the vast majority of Europeans who supposedly voted for him has never actually heard of him, or knew that they were doing so.
The role of the European Commission President has been severely weakened by the response to the Eurozone crisis, as it became evident that real power in Europe is in Berlin rather than Brussels. Yet it remains a high profile role and one of the top European jobs. Mr. Juncker advocates increased federalism in European and an increasingly powerful role for the European parliament, which is in his and the opinion of his supporters the best way to improve democracy in Europe. Others have resisted this claim however, believing that the European electorate is simply too large and fragmented to represent a true “demos”, and that powers should remain with the national parliaments better represent the interests of individuals.
- UKIP has exposed the tension in the Tory soul
The success of UKIP at the recent European parliamentary elections has demonstrated the internal contradictions within the Conservative Party. For a long time the Conservatives have been a party of both rural England and the London boardroom, an uneasy marriage of two groups that on one hand sought free trade and globalisation, but on the other was resistant to the impact that it has on the country. The rise of UKIP is attributed to the structural problem of an increasingly globalising world and the impact that it is having on the people of the UK. The contradictions within the party are being exposed for the world to see as UKIP tear away traditional Tory voters, making an electoral victory at next years General Election all the more unlikely.
- Goldman creates new role in growth push
After a management shake-up, Goldman Sachs has announced its intention to move into commercial banking. Goldman’s will not look to have a presence on the high street but will rival existing players in the high net wealth sector, such as Bank of America and JPMorgan Chase. The move follows Goldman Sachs decision to look for growth outside of its traditional areas of business, which focus on trading and advisory services.