Thought I would post a few screenshots to see what the markets think of Brown's claim that we are well placed to ride out the downturn.

• CDS: Gone from 7bps to 120bps in the space of a year. Admittedly, all sovereigns (and indeed all CDS markets) have suffered, but U.S. started the year at around 15bps, and is now only 66bps

• FX:

GBPEUR: Started the year at 1.36, now at record low of 1.14

http://www.telegraph.co.uk/finance/economics/3700755/Sterling-tumbles-to-record-low-against-the-euro-as-UK-economic-woes-mount.html

"The pound fell to a new record low against the euro today after a stark warning that the pace of economic decline in Britain is accelerating as the country moves into a deep recession."

GBPUSD: Similar picture - started year at approx 2:1, now at thirteen year low

http://www.telegraph.co.uk/finance/economics/interestrates/3548142/Interest-rates-cut-sterling-recovery-unlikely.html

"The pound has fallen against the dollar from a high of $2.0334 in March to below $1.45 yesterday, the lowest levels for 13 years. However, sterling launched a mini-rally after the interest rate announcement – rising from $1.4470 to $1.4677 shortly after noon."

• House prices: Fallen almost 20% in just over a year

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5284863.ece

"British house prices tumbled at a record 16.1 per cent in November, marking the sharpest drop in property values for a quarter of a century.

Figures released this morning by Halifax revealed that prices fell 2.6 per cent in November compared with October, and are 16.1 per cent lower than in November 2007.

The year-on-year decline is deeper than falls recorded during the last recession in the early 1990s, and is the biggest drop since 1983. "

Note: I think they meant to say since records began, as the market was rising in 1983

• Mortgage approvals: Record lows

http://www.telegraph.co.uk/finance/economics/houseprices/3538545/UK-mortgage-approvals-down-72pc-from-peak-Bank-of-England-figures-show.html

"The number of UK mortgage approvals dropped again in October, equalling their lowest low and 72pc down on their peak in 2007, according to the latest figures from the Bank of England."

• PMI (Purchasing Manager Index) - below 50 indicates outlook worsening

Services:

http://www.guardian.co.uk/business/2008/dec/03/recession-economics

"Britain's dominant services sector is shrinking at a record pace, a new survey showed this morning, suggesting the economy is heading into a deep recession."

 Manufacturing:

http://www.telegraph.co.uk/finance/economics/3538439/UK-manufacturing-shrank-to-record-low-in-November-PMI-report-shows.html

"The closely watched manufacturing Purchasing Managers' Index (PMI), which combines orders and output levels in British factories, was 34.4 - the lowest level since the series began in 1992 and the biggest ever one-month fall."

Construction:

http://www.guardian.co.uk/business/2008/dec/02/construction-recession-economy

"Further grim news on the economy emerged this morning as a survey showed the country's once-booming construction sector contracted for the ninth month running in November - and at the fastest pace on record"

No graph as Bloomberg only has a few months of data

• Unemployment: Highest level for 11 years

http://news.bbc.co.uk/1/hi/business/7724084.stm

• Manufacturing Production:

http://www.telegraph.co.uk/finance/financetopics/recession/3688680/Manufacturing-and-mining-drags-UK-industrial-production-down-more-than-expected.html

"Figures from the Office for National Statistics showed that manufacturing output fell by 1.4pc in October - the eighth monthly fall in a row and the longest run of falling output since 1980."

• Industrial Production:

http://www.guardian.co.uk/business/2008/dec/09/recession-interest-rates

"Britain's economy may be deeper in recession than previously thought after official data showed that industrial output plummeted at the fastest rate in nearly six years in October, with previous months also weaker than estimated."

 

Conclusion: It would appear that the pre budget report's claim that the economy will grow in the second half of 2009 may be a tad optimistic.

http://news.bbc.co.uk/1/hi/business/7775802.stm