BECKHAM
12-05-2013, 12:31 PM
Britain's export performance and construction industry continued to improve in March, giving George Osborne a much-needed lift ahead of the G7 meeting of finance ministers that began on Friday.
Exports rose at a faster pace than imports to bring down the monthly deficit in goods and services, while construction output recovered from an unusually cold winter that interrupted building in most parts of the industry.
The chancellor, who is under pressure to to boost growth and relax his plans for further public spending cuts, is expected to be relieved that while goods exports to other EU member states were flat, sales to non-EU countries were up 10% on the previous month. Exports to the US soared 21% on February's level.
Speaking as he welcomed finance ministers and central bank governors from the world's most powerful economies, Osborne said he was keen for his peers to focus on what more central banks can do to help growth at a time when most governments are trying to cut spending and reduce bloated debts.
"(This is) an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored," he said.
Christine Lagarde, the boss of the International Monetary Fund, incoming Bank of England governor Mark Carney and US Treasury secretary Jack Lew were among those arriving at Hartwell House in the Buckinghamshire countryside for the G7 meeting on Friday.
Osborne has also pledged to make tax evasion a key issue at the G7 summit, but Lew made it clear the Obama administration's priority was tackling the current slowdown in global growth.
Lew said Japan had "growth issues" that needed to be dealt with and that its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations.
"I'm just going to refer back to the ground rules and the fact that we've made clear that we'll keep an eye on that," he said.
The yen hit a four-year low against the dollar earlier on Friday, beyond the psychologically important 100 yen mark. It also traded at a three-year low against the euro.
Lew is also concerned at Berlin's stubborn refusal to take a more lenient attitude to highly indebted southern European countries, which he said was holding back the eurozone's recovery and stifling efforts to spur global growth.
Wolfgang Schäuble, the German finance minister, dismissed criticism earlier this week that austerity hurt growth, insisting it established the confidence needed in the public finances to boost investment.
Stock markets continued to soar with the FTSE 100 reaching a 6.5 year high. The Dow Jones Industrial index maintained its stellar performance after it added 27 points by 18:00 BST to 15,054.
Analysts said the rise in share values, with the FTSE up 12% so far this year, was largely due to a lack of rival investment opportunities as central banks pumped cheap money into the world economy, depressing interest rates.
Osborne has come under fire from the IMF for not doing enough to boost growth and holding back the world recovery. Like Schäuble, he could come under pressure to relax his austerity measures to promote growth.
The UK narrowly avoided a triple dip recession after figures showed the economy grew by 0.3% in the first three months of the year, but analysts cautioned that the construction industry, which grew by 12% in March, had performed badly since the financial crash and was still 2% down over in the first three months of the year.
Trade also remains a drag on the economy despite a recent recovery. A £9bn shortfall in goods was only partially offset by services exports to leave the overall trade deficit of £3.1bn, down from the previous month's £3.4bn deficit.
Martin Beck, UK economist at Capital Economics, said: "The generally good run of recent data can't disguise the fact that, in its domestic and overseas performance, the UK economy remains pretty sluggish."
Analysts Lombard Street Research said: "The British economy is sickly. Although initial estimates of GDP suggest activity
increased in the first three months of the year, a self-sustaining recovery remains elusive. Output growth in the recent past seems to have been somewhat stronger than official ONS data imply; but there is no sign that the economy is returning to a 'normal' pace of expansion.
Exports rose at a faster pace than imports to bring down the monthly deficit in goods and services, while construction output recovered from an unusually cold winter that interrupted building in most parts of the industry.
The chancellor, who is under pressure to to boost growth and relax his plans for further public spending cuts, is expected to be relieved that while goods exports to other EU member states were flat, sales to non-EU countries were up 10% on the previous month. Exports to the US soared 21% on February's level.
Speaking as he welcomed finance ministers and central bank governors from the world's most powerful economies, Osborne said he was keen for his peers to focus on what more central banks can do to help growth at a time when most governments are trying to cut spending and reduce bloated debts.
"(This is) an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored," he said.
Christine Lagarde, the boss of the International Monetary Fund, incoming Bank of England governor Mark Carney and US Treasury secretary Jack Lew were among those arriving at Hartwell House in the Buckinghamshire countryside for the G7 meeting on Friday.
Osborne has also pledged to make tax evasion a key issue at the G7 summit, but Lew made it clear the Obama administration's priority was tackling the current slowdown in global growth.
Lew said Japan had "growth issues" that needed to be dealt with and that its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations.
"I'm just going to refer back to the ground rules and the fact that we've made clear that we'll keep an eye on that," he said.
The yen hit a four-year low against the dollar earlier on Friday, beyond the psychologically important 100 yen mark. It also traded at a three-year low against the euro.
Lew is also concerned at Berlin's stubborn refusal to take a more lenient attitude to highly indebted southern European countries, which he said was holding back the eurozone's recovery and stifling efforts to spur global growth.
Wolfgang Schäuble, the German finance minister, dismissed criticism earlier this week that austerity hurt growth, insisting it established the confidence needed in the public finances to boost investment.
Stock markets continued to soar with the FTSE 100 reaching a 6.5 year high. The Dow Jones Industrial index maintained its stellar performance after it added 27 points by 18:00 BST to 15,054.
Analysts said the rise in share values, with the FTSE up 12% so far this year, was largely due to a lack of rival investment opportunities as central banks pumped cheap money into the world economy, depressing interest rates.
Osborne has come under fire from the IMF for not doing enough to boost growth and holding back the world recovery. Like Schäuble, he could come under pressure to relax his austerity measures to promote growth.
The UK narrowly avoided a triple dip recession after figures showed the economy grew by 0.3% in the first three months of the year, but analysts cautioned that the construction industry, which grew by 12% in March, had performed badly since the financial crash and was still 2% down over in the first three months of the year.
Trade also remains a drag on the economy despite a recent recovery. A £9bn shortfall in goods was only partially offset by services exports to leave the overall trade deficit of £3.1bn, down from the previous month's £3.4bn deficit.
Martin Beck, UK economist at Capital Economics, said: "The generally good run of recent data can't disguise the fact that, in its domestic and overseas performance, the UK economy remains pretty sluggish."
Analysts Lombard Street Research said: "The British economy is sickly. Although initial estimates of GDP suggest activity
increased in the first three months of the year, a self-sustaining recovery remains elusive. Output growth in the recent past seems to have been somewhat stronger than official ONS data imply; but there is no sign that the economy is returning to a 'normal' pace of expansion.