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An uphill struggle
Key points
Although it is two years since the recession ended, and global growth
Contents
is back to 3%+, the legacy problems are unresolved. The debt-induced
The global
fragility in the advanced economies remains, while emerging economies
are dealing with an inflation problem. Growth should not be derailed, economy 2-3
but the twin speed global economy will continue.
Europe’s
In Europe, the outlook is dominated by the sovereign debt issue debt crisis 4-5
which has proved stubbornly resistant to the policymakers’ initiatives.
Contagion is a very real risk and overshadows growth issues. Output UK overview:
in indebted countries of the periphery will continue to stagnate while a slow recovery 6-7
Germany and its neighbours maintain a healthy broadly-based recovery.
UK economy: a
Having clawed back the ground lost at the end of 2010, the UK seems
once again becalmed in mid 2011. The squeeze on the household sector re-balancing act 8-9
is now very evident, with debt, job insecurity and the eroding spending
power by inflation all contributing to a scaling back of growth forecasts The household
for this year and next. And the parlous state of public finances mean the sector feels
government cannot come to the rescue. the strain 10-11
With both the consumer and public sector constrained, the UK needs Forecasts 12
investment and net trade to drive growth. Progress towards ‘rebalancing’
the economy has been mixed, although there were encouraging signs in
the first half of 2011. Continued sub-trend growth, rather than a slide
back into recession, is the most-likely outcome.
Further information from: Dennis Turner, HSBC Bank plc, Business Economics,
8 Canada Square, London E14 5HQ. Telephone: 020 7991 8567.
2
It’s now two years since the global recovery got triggered by very rapid growth. The question that
under way. But the tenor of the economic news is now obsessing investors and financial markets
flow has softened markedly in recent months, is whether the sluggish news flow of the past
especially in the manufacturing sector. Financial few months is simply a hiccup on the long and
markets meanwhile remain jittery on account of winding road to recovery, or whether it is the
the Eurozone’s sovereign debt crisis, and there result of more sinister forces.
are also growing concerns about the possibility
of a hard-landing for China’s economy. Earthquake damage
The answer, as ever, is not straightforward.
To date, a key driver of the revival has been the
The earthquake and tsunami in Japan caused
need for manufacturers, distributors, and retailers
substantial temporary disruption to some supply
to rebuild inventories, which had been run down
chains, especially in the automotive industry.
to very low levels in the immediate aftermath of
There is also evidence that many businesses
2008’s financial crisis. This process contributed
are again paring back their inventories. But the
to a rebound of around 14% in the volume of
biggest factor behind the recent soft run of data is
global merchandise trade in 2010, thereby making
the latest surge in commodity prices. With wage
good the slump of the previous year. Viewed
growth in many advanced economies constrained
purely in terms of economic growth, therefore,
by high unemployment rates, real disposable
last year was one of the best ever for the
incomes are either rising very slowly, or falling.
global economy. But the process of rebuilding
This is putting people off from spending, and is
inventories is only ever a temporary boon for
prolonging the process of paying down debts.
economies as they emerge from recession.
For those recoveries to be sustained requires
It is likely that the tone of the news flow will
that households have the confidence to spend,
perk up again during the next few months.
and that businesses have the confidence to invest.
The disruptions caused by Japan’s earthquake
have largely been resolved, while commodity
Advanced economies hobbled by debt
prices have edged down in the past month or so
It is at this point that the fragility of many as evidence mounts that the measures taken by
advanced economies is becoming all too apparent. policymakers in emerging economies to cool their
A sizeable number remain hobbled by rapid growth are beginning to bear fruit. In any
excessive indebtedness, whether in the household
sector, the public sector, or both; and with
governments having exhausted their abilities to Fragile growth keeps the lid on rate rises
offer fiscal stimuli, the going will get a good deal 6
tougher from here on. This applies particularly to Policy interest
5 rates:
the US, Japan, the UK, and the countries on the
UK forecast
periphery of the Eurozone. It applies far less, or 4 USA
not at all, to those sitting on a stash of valuable % Euro Area
natural resources, those with highly-competitive 3
export sectors, and those who have managed to
2
ride out the travails of the past few years without
running up large government budget deficits. 1
governments in the west started to make the Source: Bank of England / US Federal Reserve /
painful transition from fiscal stimulus to fiscal ECB
austerity, and as the large emerging economies
started to fight the inflation that had been
3
It is now more than 18 months since the first of goods exports to China rose by more than 40%
rumblings of the sovereign debt crisis were in 2010, the unemployment rate is now at its
detected. Since then, three countries (Greece, lowest since reunification, and the number of
Ireland, and Portugal) have received bail-out people in full-time work has increased by around
packages financed by the EU and the IMF. half a million in the past year.
For all the ministerial and summit meetings held
by the politicians, however, a lasting solution Although there has been a clear down-shift in the
has been elusive. Until one is found, the risk pace of manufacturing growth since the spring,
of a disorderly default by a member of the activity in the services sector has so far held up
Eurozone remains the biggest risk facing well. The consumer landscape in Germany can
the global economy and the financial system. hardly be described as buoyant, with households
remaining cautious and frugal, and the savings
Defying expectations rate edging lower at a glacial pace. But it’s still a
far cry from the consumer recessions that are the
It continues to be a source of some surprise that
order of the day on the periphery (and in the UK),
the debt crisis hasn’t had a detrimental impact
with spending rising modestly as employment
on the investing and spending behaviour of
increases. As export demand slackens, the onus
businesses and households across the Eurozone.
will now shift to households to keep Germany’s
Indeed, the Euro Area’s economic performance
recovery firing on all cylinders.
has persistently exceeded the expectations
of economic forecasters. For 2010 as a whole,
Harder times at the periphery
GDP expanded by a respectable-enough 1.7%,
with the seven ‘core’ economies (accounting for Life is far tougher on the periphery. Spain hovers
70% of total output) turning in growth of 2.4%. between minimal growth and mild recession,
the Portuguese economy is again contracting,
This momentum was sustained into 2011, and there is still little evidence of a meaningful
with GDP registering a brisk increase of 0.8% recovery getting under way in either Greece or
in the first quarter. But survey-based indicators Ireland, where output has contracted by 10% and
of activity and confidence have slipped in the 12% respectively from the pre-recession peaks.
past few months, with the composite reading from The much talked about structural reforms that
the Purchasing Managers’ Index (PMI) surveys are needed to make these economies competitive
covering both the manufacturing and services again (this doesn’t apply to Ireland) will take
sector, falling to its lowest level for 20 months many years to produce tangible results.
in June. Survey results often give an exaggerated
impression of what is happening to economic Slowing growth in the Eurozone
activity, but it nonetheless seems likely that the 2 65
In the meantime, they will struggle to grow and to from a disorderly default on the already-fragile
deliver jobs and higher living standards for their European banking system and on other peripheral
people against the headwinds of enforced fiscal countries. The way the markets turned against
retrenchment. Greece’s recent experience shows Italy in early July demonstrates how precarious
that an over-zealous approach to deficit-reduction the situation has become.
can be counter-productive. Greece slashed its
budget deficit by an impressive five percentage Containing the contagion
points of GDP in 2010, but in so doing pushed
In the end it is inevitable that Greece will either
its economy deeper into recession which in turn
have to be forgiven some of its debts, or be
undermined the government’s ability to garner
allowed to repay them at rates of interest that
tax receipts.
are markedly lower than those that would be set
by the markets. But in the meantime the EU and
A second bail-out for Greece
the ECB have no option but to keep on bailing
Despite both Ireland and Portugal needing Greece out in the hope that the contagion risks
EU/IMF rescue packages, it is the situation in to other peripheral economies and to the banking
Greece which is fanning the flames of the debt systems in the rest of Europe can be neutralised.
crisis. Having received a bail-out worth a nominal
€110 billion last May, it has become apparent This won’t be a palatable prospect for voters in
that this will not be enough. It had been assumed ‘core’ Eurozone countries, who are becoming
when that deal was put together that Greece ever-more disgruntled about bailing-out fiscal
would be able to regain access to the capital miscreants on the periphery. But the alternative
markets to raise the bulk of its medium and is the high probability that the Eurozone’s
longer term financing needs from the spring recovery is eventually derailed by a further round
of next year. This now looks unlikely. of banking woes which governments now lack
the resources to combat. If Ireland and Portugal,
The vote in the Greek Parliament at the end whose fiscal positions are less parlous than
of June, giving approval to another round of Greece, can be put back on the straight and
austerity measures and an ambitious programme narrow, and if Spain and Italy can keep out of
of privatisations, allowed the disbursement of trouble, then in three or four years time it might
the next tranche (worth €12 billion) of the present be possible to find a lasting solution for Greece
rescue, and was a pre-condition for the EU without bringing down the whole deck of cards.
considering a further bail-out. But the process
of putting a second support package together Deficits: getting back on track in the periphery
has been fraught and rancorous. There has been 18
Deficit* as a
an almighty spat between Germany and the ECB 15 share of GDP
about the role, if any, that private sector investors
* below 0 = surplus
should play in any rescue, with the ratings 12
3
Much of the discussion about the debt crisis has Euro Area Spain
taken a pejorative view that the politicians are 0
Portugal Greece
simply ‘kicking the can down the road’, delaying -3
an inevitable disorderly default. Meanwhile, the 2007 2008 2009 2010 2011 2012
view of many protesters on the streets of Athens Source: Eurostat / IMF / HSBC
is that bankruptcy now would be preferable to
endless austerity. What both viewpoints fail to
take account of is the potential knock-on effects
6
For much of 2011, the UK economy appears to ten years to 2007, consumer spending (63% of
have been becalmed. 'Flatlining' is the current final demand) grew by an average of 3.5% a year
buzzword. As growth has stalled, the authorities in real terms, which was underpinned by record
have been split as to whether to tighten policy levels of borrowing. But today, households have
to dampen down above-target inflation or keep to unwind debt as well as having to cope with
it loose to ensure the recovery stays on track. uncertainty about employment prospects and
At the same time, the hoped-for and much-needed earnings rising at about half the rate of inflation.
re-balancing of activity is proceeding only very In the first three months of 2011, real household
slowly and opportunities internationally are spending was not only lower (-0.3%) over twelve
threatened by the on-going problems in the months but was 4.3% down on the same period
Eurozone. in 2008, the last pre-recession year.
Yet there are encouraging signs. There has been Public sector spending also grew strongly in the
no deterioration in the labour market this year pre-recession period (by 2.5% pa in the ten years
and the key business surveys continue to point to 2008) but, like the household sector, relied
to a positive short-term outlook. Exporters, heavily on borrowing. After eight years in which
moreover, are responding (albeit erratically) government finances went from a small surplus to
to the competitive pound and global growth, net borrowing of £156bn (and public sector net
and manufacturing has been the star performer debt from 29.7% of GDP to 60% in 2009/10),
since the end of the recession. By the first quarter the coalition government has called time on
of 2011, however, real GDP was still 4% lower this growth. The Chancellor’s plans to cut the
than the pre-recession peak and is unlikely to get cost of the public sector by £120bn by 2015/16
back to the 2008 level before 2013, with the risk have been announced and, although not fully
that it could take even longer. Recession may implemented, are already putting downward
technically be over but it is not yet ‘business pressure on activity. Although these proposals
as usual’. have led to protests, a period of fiscal tightening
always follows a recession. When Messrs Healey
Slow progress (1976), Howe (1979-81) and Lamont/Clarke
(1992-94) squeezed taxes and government
When GDP dipped into negative territory in the
spending, their actions slowed rather than
final three months of last year, there was a sharp
derailed the recovery.
intake of breath amongst policymakers and then a
sigh of relief when the lost ground was clawed
back in the first quarter of 2011. Although the
A slow recovery is under way
December weather was clearly a factor, the 0.5%
6
decline in Q4 GDP highlighted the weakness of
GDP growth: Quarterly Annual
the recovery. A quarter in which growth stalls or 4
goes backwards is not, however, unusual for an long-term average
economy emerging from recession. Output does 2
not grow in a straight line upwards, and the path
of past upturns has been erratic and unevenly % 0
shared between industry sectors and regions.
This recovery promises to be the same. -2
export trends which have been reflected in the * Consumer Prices Index (CPI):
annual percent change
robust performance of manufacturing over the
-2
past 18 months and in the responses to business 2009 2010 2011 2012
surveys. But a continuing dependence on the Source: ONS / HSBC
debt-hampered EU (over 50% of exports) and
low level penetration of the key BRIC economy
markets are potential weaknesses. The corporate
sector seems to be in good financial shape but
is reluctant to spend – probably the result of a
lack of confidence.
8
Madness, according to Einstein, is doing the of sterling is helping in this respect. In Q1 2011, a
same thing over and over again and expecting a pound was worth €1.171 and $1.603, down 30%
different outcome. Applied to the UK economy, and 19% respectively on Q1 2008, just before the
this means if recovery depends on inflation, start of the recession. Despite the inflationary
consumer spending and the housing market, consequences on imports, and the inevitable time
as it has in the past, it might lift activity in the lag before exports respond, this effective
short term but, as before, it will be a signpost ‘devaluation’ of the currency, along with low
to the next downturn. To come out of recession, interest rates, is the key to recovery.
and stay out, means doing something different
and doing more of what the UK failed to do The third factor is growth in the UK’s key
enough of in the period up to 2008. overseas markets. The world economy has picked
up after the first post-1946 year of negative
Some 80% of GDP growth during the years from growth in 2009, with growth in 2011 and 2012
2001 to 2007 came from 40% of the economy – expected to be in the 3.0-3.5% range. There is,
financial services, property and construction however, a shift taking place in the distribution
and distribution. This clearly reflected the of this activity, with increases in output in the
domestic nature of growth, which depended developing countries at least three times faster
heavily on consumer and government spending than in the traditional economic powerhouses
(and borrowing). With both these sectors now of the developed world. This is an opportunity
constrained, the corporate sector has to look and a vulnerability for the UK.
elsewhere, which means exporting is the key,
together with investment. The scale of the task In 2010, 53% of the UK’s £265 billion exports
is daunting. In the period from 1997 to 2007, found their way to other countries in the EU,
net trade reduced GDP by a fifth whereas from the vast majority of which went to members of the
2011 to 2015, it is expected to account for 30% Eurozone. Given the huge debt-related issues in
of growth. This is is a major challenge given the single currency area, growth prospects must
the uncertainties in the global economy. So far, be constrained. The UK’s single largest market
progress has been mixed. remains the US (14% of the total), also grappling
with debt and emerging slowly from recession.
Exports on the up So, two thirds of the country’s exports go to two
high-income parts of the global economy which
Despite the relatively weak domestic activity,
have been under-performing.
the UK’s trade position worsened in 2010.
The deficit on the current account of the balance Losing market share in the BRICS
of payments rose by over £12 billion in 2010, 20 2.5
to £36.2 billion. There was a particularly marked UK market share of total
deterioration in the trade in goods, as well as BRIC* imports (R axis)
2.0
a small fall in the surplus in trade in services. 15
Although overseas investment income made a
£bn 1.5
dent in the shortfall, the UK’s deficit amounted
10 * Brazil, Russia, %
to a sizeable but manageable 2.5% of GDP.
India, China 1.0
A push to increase exports would boost the
balance of payments and underpin recovery. 5
0.5
UK exports to BRIC*
To succeed in export markets, UK companies economies (£bn, L axis)
need three things. They need good products 0 0.0
2000 2002 2004 2006 2008 2010
and it seems that across a range of sectors,
British products still have an enviably positive Source: ONS / IMF
reputation for quality. The second pre-requisite is
to be competitively priced and the fall in the value
9
Attention in world markets is increasingly being for the rest of this year. The corporate sector is
focused on the emerging countries, with the BRIC in reasonable financial shape, as a result of the
economies of Brazil, Russia, India and China long period of low interest rates, cost cutting,
usually highlighted. These are countries barely reductions in corporation tax and improved
touched by recession and enjoying robust rates profitability, and better placed now than in
of growth. But in 2008 and 2009, the UK’s the past to fund capital expenditure.
combined exports to these four countries
amounted to just under 80% of the exports The OBR forecast
to the Republic of Ireland. To make a reality
The official OBR forecasts separate business
of rebalancing, there is a compelling need to
investment from total investment spending,
re-focus exports, just as Germany has done.
and growth in this vital category is expected
The Germans have shown that Europeans
to accelerate in the next few years, and reach
can sell into China and that China does not
double-digit rates by 2013-14. This implies
necessarily import from low-cost suppliers.
that business investment will match consumer
spending in terms of the contribution to GDP
It takes time, but there were signs that in Q1
growth even though in absolute terms, it is
the rebalancing was starting to happen. In 2010,
about a quarter of the size.
the 5.3% growth in exports of goods and services
lagged the 8.5% rise in imports, but in Q1 2011,
Given the constraints on households and
exports (10.4%) rose at twice the rate of imports
government, this rebalancing is the only
(4.9%). The trend in trade in goods only is even
way for the UK to get back to trend growth
more marked and the slower growth of export
(2.5% pa) in the foreseeable future. This is
prices compared with import prices seems to
essential if a more sustainable distribution
suggest the exchange rate is a benefit. In terms
of growth is to be achieved, but the obstacles
of products, exports of manufactures have been
to changing the way the economy operates
very robust and in terms of markets, growth has
should not be underestimated.
been strongest in non-EU countries.
investment
Business
For the decade up to 2005, consumer spending that the private sector will continue to generate
was the major driver of economic growth. In real jobs at quite the rate it has been doing so far.
terms, spending grew by nearly 4% a year during With public sector job losses expected to
this period compared with GDP growth of 3%. accelerate from now on, overall employment
But this buoyant growth was fuelled by a huge growth is unlikely to add much to spending
rise in indebtedness. In 1995 the household sector power over the next eighteen months.
owed £90 for each £100 of disposable income.
By 2005 this ratio had jumped to £140 for each Equity withdrawal goes into reverse
£100 of income in the process making consumers
For the period up until 2007, the household
much more sensitive to interest rate changes.
sector took advantage of a buoyant housing
This heightened sensitivity became apparent
market to withdraw equity, thereby adding
in 2004 when a relatively small rise in Bank
hugely to potential spending. Since 2007,
Rate saw a jump in servicing costs and a sharp
however, the weakness of the housing market
slowdown in spending growth. Higher interest
has meant that far from taking further equity out,
rates did not immediately deter borrowers,
households have had to inject large amounts of
however, and by the end of 2007 the household
cash into housing, thus reducing spending power.
sector debt income ratio had risen to 160%,
The continuing weakness of the housing market,
increasing interest rate sensitivity much further.
meanwhile, means that lenders will continue
to ask for high deposits from prospective
Recession hits hard
mortgagees for the foreseeable future, meaning
When the Bank of England again raised rates that households will have to continue injecting
in 2007, therefore, servicing a debt which had money into housing rather than take it out.
hit £1.4 trillion escalated further and, with
unemployment rising sharply from the middle The company sector, moreover, remains cost
of 2008, consumers were forced to rein in their conscious and is, in most situations, able to use
spending plans. An added problem arose in the unemployment argument for keeping pay
2008, moreover, when the rate of inflation awards modest. More importantly pay awards
accelerated past the rate of increase in earnings, are likely to stay well below the rate of inflation
the subsequent squeeze on real earnings adding which is expected to remain above 4% for the rest
to the sector’s woes. After peaking in the first of this year before falling back towards the 2%
quarter of 2008, expenditure fell consistently target by the end of next year. Public sector pay
for the next five quarters, eventually cutting meanwhile is likely to remain frozen.
spending by 5% in real terms.
Getting poorer
With households weighed down with debt, 6 6
The upshot is that disposable income growth maintain spending patterns is by saving less,
in nominal terms will remain subdued. Average meaning that the deposit pot will be limited.
earnings growth is expected to remain below 2% Meanwhile, the Government’s decision to
for this year before accelerating to the heady resurrect its index linked National Savings
heights of 2.5% in 2012 at which time it might product will undoubtedly siphon off some
match the rate of inflation on the way down. of the available deposits, and competition
The upshot is that consumers will remain under for what is left will be intense.
pressure for at least the next eighteen months.
Spending is as likely to fall this year as rise With high loan-to-value loans requiring
and will only see a very modest improvement higher capital and that capital in short supply,
next year. the Financial Services Authority’s keenness on
conservative lending policies and sheer economic
The mortgage market remains comatose uncertainty, banks will continue to offer low loan
to deposit products over the forecast period.
As economic recovery began, the housing market
shared in the pick up. Banks began to approve
The hidden problem of ‘forbearance’
more loans through the second half of 2009,
albeit from a very low level, and house prices So far, given the scale of the downturn and the
started to rise. But the bounce back proved short- subdued nature of the recovery, arrears and
lived. After peaking at a modest 59,000 a month repossessions have been modest in the UK.
at the beginning of 2010, well below the 70-80K Partly this has been caused by banks supporting
monthly rate that is thought to be the level needed customers with problem loans in the hope that
to keep house prices steady, approvals started as the economy improved these loans would
to drift downwards. For much of the last year, come right. The Bank of England in its latest
approvals have strained to hit 48,000 a month Financial Stability Report notes that forbearance
and house price inflation, having risen to 8% in means that the arrears data is underestimating
mid- 2010 has fallen back into negative territory. underlying household distress. The worry is that
an exceptionally slow and drawn-out recovery
Given the high levels of existing debt, high would cause these problem loans to worsen rather
unemployment and negative earnings growth, than improve. In short, the housing market is in
it is hardly surprising that consumer confidence no danger of waking from its coma any time soon.
is at historic lows and the appetite for taking Indeed there may be more deterioration before
on a new mortgage or increasing an existing the patient begins to recover.
mortgage is subdued. Even where there is a
potential demand, lenders’ preference for low Stuck in a rut
loan-to-value ratios is limiting take up, especially 200 30
Mortgage approvals
amongst first time buyers. That is unlikely to (L axis)
improve until well into 2012 at the earliest. House prices (R axis)
20
150
annual % change
000s per month
is coming at a time when household finances are Source: Bank of England / Halifax / Nationwide
under strain. With real earnings growth still
negative, the only way that individuals can
12
Forecasts
World economy
GDP growth Inflation
2009 2010 2011 2012 2009 2010 2011 2012
World -2.3 3.8 3.0 3.4 1.1 2.4 3.4 2.5
USA -2.6 2.9 2.5 2.9 -0.3 1.6 2.9 1.5
Euro Area -4.1 1.7 2.0 1.4 0.3 1.6 2.7 1.9
Japan -6.3 4.0 -0.6 2.4 -1.3 -1.0 -0.1 -0.3
China 9.2 10.3 8.9 8.6 -0.7 3.3 4.8 2.9
India 7.0 9.0 7.5 8.1 12.4 10.4 8.0 7.7
UK economy
annual % change, adjusted for inflation
2011 2012
2010 2011 2012 Q1 Q2 Q3 Q4 Q1 Q2
GDP 1.4 1.2 1.6 1.6 0.9 0.6 1.6 1.5 1.5
GDP (quarterly % ) - - - 0.5 0.3 0.4 0.4 0.4 0.3
Consumer spending 0.7 -0.7 1.5 -0.6 -1.1 -0.7 -0.1 0.9 1.5
Government spending 1.0 0.8 -1.4 1.1 0.8 0.8 0.5 -0.5 -1.2
Investment 3.6 1.1 4.2 0.0 2.8 0.0 1.6 4.3 3.8
Stockbuilding (% GDP) 1.5 0.0 -0.1 0.7 0.0 -0.2 -0.3 0.1 -0.1
Domestic demand 2.7 0.0 1.2 0.5 -0.1 -0.5 0.0 1.2 1.2
Exports 5.2 6.5 3.7 9.3 6.6 5.7 4.4 2.9 3.4
Imports 8.8 1.7 2.2 4.2 2.5 1.4 -1.0 1.9 2.1
Manufacturing output 3.6 3.0 1.4 0.9 -0.2 0.4 0.4 0.4 0.4
Unemployment rate (%) 7.9 7.9 8.2 7.7 7.9 8.0 8.1 8.2 8.3
Average earnings 1.9 1.9 2.5 2.5 1.6 2.0 1.6 2.1 2.5
Inflation - RPI 4.6 5.1 3.3 5.3 5.1 5.0 4.8 3.4 3.1
Inflation - CPI 3.3 4.3 2.2 4.1 4.4 4.4 4.2 2.7 2.1
Current account (% of GDP) -3.2 -2.1 -1.6 - - - - - -
PSNB1 (% of GDP) 10.0 7.9 6.2 - - - - - -
Exchange rate2 US$ / £ 1.57 1.66 1.61 1.60 1.65 1.65 1.66 1.66 1.66
Exchange rate2 £ / € 0.86 0.87 0.87 0.89 0.86 0.86 0.87 0.87 0.87
UK Bank Rate2 (%) 0.50 0.50 1.50 0.50 0.50 0.50 0.50 0.75 1.00
10-year bond yield (%) 3.7 3.0 3.6 3.6 3.1 2.9 3.0 3.2 3.4
1 fiscal years, where 2010 = FY10/11, 2011 = FY11/12, and 2012 = FY12/13
2 estimate at end-period
Forecast as at 30 June 2011; data and forecasts are subject to revision
Source: HSBC Global Economics Q3 2011
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of HSBC Bank, which are subject to change without notice.
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