FT : What the world must do to kickstart growth

What the world must do to kickstart growth

The post-crisis panic might be subsiding but medium-term prospects are problematic

The world’s finance ministers and central bank governors gather in Washington this week for the biannual International Monetary Fund meetings. While there will not be the sense of alarm that dominated the convocations in the years after the financial crisis, the unfortunate reality is that the medium-term prospects for the global economy have not been so problematic for a long time.
The IMF in its current World Economic Outlook essentially endorses the “secular stagnation” hypothesis, noting that the real interest rate necessary to bring about enough demand for full employment is likely to remain depressed for a substantial period. This is made manifest by the fact that inflation is well below target throughout the developed world and is likely to decline further this year. Without robust growth in, and greater demand from, these markets, growth in emerging economies is likely to subside. That is even without considering the political challenges facing countries as diverse as Brazil, China, South Africa, Russia and Turkey.

In the face of inadequate demand, the world’s primary strategy is easy money. Base interest rates remain at floor levels throughout the developed world and central banks signal that they are unlikely to rise soon. While the US is tapering quantitative easing, Japan continues to ease on a large scale, and the eurozone seems to be moving closer to this. This is all better than the tight money that in 1930s made the Depression the Great Depression. But it has problems as a growth strategy.
We do not have a strong basis for supposing that reductions in interest rates from very low levels have a big impact on spending decisions. Any spending they do induce tends to represent a pulling forward rather than an augmentation of demand. We do know they strongly encourage economic actors to take on debt; that they place pressure on return-seeking investors to take increased risk; that they inflate asset values and reward financial activity. And we cannot confidently predict the ultimate impact on markets or the confidence of investors of the unwinding of central bank balance sheets.
While monetary policies lower capital costs and so encourage spending that businesses and households judge unworthwhile even at rock-bottom interest rates, many elements of investment exist that can be increased and that also have high returns but are held back by misguided public policies.
In the US the case for substantial investment promotion is overwhelming. Increased infrastructure spending would reduce burdens on future generations, not just by spurring growth but also by expanding the economy’s capacity and reducing deferred maintenance obligations. For example: can it be rational in the 21st century for the US air traffic control system to rely on paper tracking of flight paths?
Japan, with the introduction of value added tax on April 1, is engaged in a major fiscal contraction at a time when it is far from clear whether last year’s progress in reversing deflation is durable or a reflection of one-off exchange rate movements. A return to stagnation and deflation could rapidly call its solvency into question. Japan takes a dangerous risk if it waits to observe the consequences before enacting fiscal and structural reform measures to promote spending.
Europe has moved back from the brink, with defaults or devaluations now remote as possibilities. But no strategy for durable growth is yet in place and the slide towards deflation continues. Strong actions to restore the banking system so that it can be a conduit for a robust flow of credit, as well as measures to promote demand in the countries of the periphery where competitiveness challenges remain, are imperative.
If emerging markets’ capital inflows fall off substantially, and so they move further towards being net exporters, it is hard to see where in the developed world can take up the slack by accepting trade balance deterioration. So measures to bolster capital flows and exports to emerging markets are essential. Most important are political steps to reassure about populist threats in a number of countries, such as where authoritarian governments give signs of disregarding contracts and property rights, and provide investor protection and backstop finance. In this regard passage by the US Congress of authorisation for the IMF to enhance its ability to provide backstop finance, is imperative.
Creative consideration should also be given to ways of mobilising the trillions of dollars in public assets held by central banks and sovereign wealth funds largely in the form of safe liquid assets to promote growth.
In a globalised economy, the impact of these steps taken together is likely to be substantially greater than the sum of their individual impacts. And the consequences of national policy failures are likely to cascade. That is why a global growth strategy framed to resist secular stagnation rather than just muddle through with the palliative of easy money should be this week’s agenda.
The writer is Charles W Eliot university professor at Harvard and a former US Treasury secretary

>>> Meda may see Mylan increase offer

Meda may see Mylan increase offer - report (translated)

Meda may see Mylan make a higher offer for the Swedish pharmaceutical company after yesterday’s rejection, according to Dagens Industri. The Swedish business daily reported that Meda saw its share price rise by around 14% yesterday to SEK 110.5 (EUR 12.3) despite rejecting Pennsylvania-based generic pharma company Mylan’s offer, valuing Meda at SEK 33bn (EUR 3.7bn). The paper wrote that the price increase indicates that the market is expecting Mylan to make a better offer or the possibility of a new bidder.

The paper wrote, without citing any named sources, that Mylan was looking to pay for Meda mainly by shares which is one likely reason for Meda’s rejection. The paper reported, however, that Mylan saw its share price rise by 6% yesterday which could fuel the American company’s interest to increase its offer.

Meanwhile, Martin Niklasson, a Swedish professional within the pharma industry, commented that he sees Mylan’s offer as a possible way to reduce its taxes. An unnamed source from the sector said Mylan is interested in Meda’s strong product portfolio, which would strengthen the company’s position in the value chain. He added that the combination of the two companies would not enjoy any synergies.
Source Dagens Industri

WSJ : Top SAC Capital Portfolio Manager to Start Own Hedge Fund

Top SAC Capital Portfolio Manager to Start Own Hedge Fund
Gabriel Plotkin Expected to Get More Than $200 Million From Steven A. Cohen

One of Steven A. Cohen's most-trusted portfolio managers is planning to strike out on his own, according to people familiar with the matter, the highest-profile departure from the hedge-fund firm since it was tarnished by an insider-trading scandal.

Gabriel Plotkin, a portfolio manager who focuses on consumer stocks and has managed more than $1 billion in positions for Mr. Cohen's SAC Capital Advisors LP in recent years, will leave by the end of the year to start his own firm, the people said.

Mr. Plotkin decided to leave in part because he had grown tired of the scrutiny brought on by the charges against others at the firm, according to a person familiar with his thinking.

Mr. Plotkin declined to comment.

Mr. Cohen is expected to invest in Mr. Plotkin's fund. It isn't clear how much Mr. Cohen will invest, but the amount could be more than $200 million, the people said.

The exit is the most notable yet from within SAC's ranks in the wake of an insider-trading scandal that tarnished the firm.

SAC, based in Stamford, Conn., is being renamed Point72 Asset Management and making a transition into a so-called family office. As such, it will manage only Mr. Cohen's personal fortune of roughly $8 billion, along with some money from his family and select employees. That is down from SAC's peak of managing more than $15 billion.

A smaller firm means less money likely will be shared among top managers. As a result, other top employees who have worked alongside Mr. Cohen also are expected to leave in the months ahead, according to a person close to the firm. Some top employees have asked Mr. Cohen to increase their payout to give them incentive to remain at the firm, the person said.

Eight current or former SAC employees were convicted on criminal charges related to insider trading as part of the yearslong probe, with several set to be sentenced this spring. Mr. Cohen hasn't been criminally charged but faces a civil lawsuit for allegedly failing to supervise his employees.

Last year, SAC agreed to settle its own criminal charges, pay a fine of almost $1.2 billion and cease managing outside money, which it did earlier this year. At a sentencing hearing scheduled for April 10, U.S. District Judge Laura Swain will decide whether to accept SAC's guilty plea.

Mr. Plotkin hasn't been accused of wrongdoing, but his name surfaced in one of the insider-trading cases last year. Jon Horvath, a former analyst at an SAC unit who has pleaded guilty to insider trading, admitted he shared inside information about Dell Inc. with two portfolio managers at another SAC unit. One of them was Mr. Plotkin.

An SAC spokesman has previously said Mr. Plotkin "did nothing wrong."

Mr. Plotkin has been at the firm for more than a decade and managed one of the two biggest portfolios there, not including Mr. Cohen's, the person said.

SAC is down to about 850 employees, from approximately 1,000 at its peak, according to an employee memo late last month.

Portfolio managers Wayne Chambless and Christopher Procaccini recently resigned to take posts at Highbridge Capital Management LLC, a hedge-fund firm owned by J.P. Morgan Chase & Co., a person familiar with the firm said. Portfolio manager Brian Younger also left for hedge fund BlueCrest Capital Management LP.

Altogether, the trio managed as much as $1.5 billion at SAC.

SAC is recruiting for a number of positions as it morphs into a family office, although some say Mr. Cohen may have challenges attracting top talent after the firm's guilty plea.

"It's very tough to hire people when a firm has had bad publicity, because people want to work for top franchise names," says Michael Karp, chief executive of financial-recruiting firm Options Group.

SAC continues to take steps in hopes of avoiding similar problems in the future. It said last month it wants to hire a "chief surveillance officer" to track the flow of external information into the firm and the use of independent research, among other things.

"We are committed to doing everything in our power to ensure we never go through again what we have experienced over the last few years," Mr. Cohen and President Tom Conheeney wrote in the memo announcing the move.

On Wednesday, SAC told employees it had also retained Palantir Technologies, a firm whose government clients include the Central Intelligence Agency and the Federal Bureau of Investigation, to improve monitoring of employee trading.

Mr. Conheeney told employees Palantir had been on-site for the past nine months as part of a pilot program.

The move to bring the company on full-time was part of an effort "to make sense of the disparate pieces of information we already have."

"We are matching our words with actions," Mr. Conheeney wrote in the memo. "I am convinced that these steps will lead to a stronger firm."

FT : Cement merger tries to head off regulators

Holcim and Lafarge will announce plans to sell close to $1bn worth of production facilities on Monday as they try to offset a regulatory backlash over their proposed $40bn all-share merger to bring together the world’s two larger cement makers.
The planned divestitures will represent capacity equivalent to 10 per cent of the combined company’s earnings before interest, tax, depreciation and amortisation, according to people familiar with the matter. That figure stood at $8.7bn at the end of 2013.

The pre-emptive move underscores the companies’ expectations of a tough battle to convince regulators of the merits of joining the largest players in an industry that has long been the subject of antitrust concerns.
The cement market is dominated by four global players, all of which have been under investigation by the European Commission for cartel behaviour and price-fixing since 2008.
The blockbuster deal, which the companies said would be a “merger of equals”, will see Switzerland’s Holcim launch a public takeover for French rival Lafarge in shares with a roughly 50:50 split.
The merger, signed off by the boards of France’s Lafarge and Switzerland’s Holcim over the weekend, will create a group with combined sales of $40bn that will reshape a global cement industry that has for years been plagued by chronic overcapacity. The companies have agreed the terms of that will see Lafarge chief executive Bruno Lafont take the top job at the new industrial giant headquartered in Paris and Zurich.
The two groups have very similar market capitalisations at around €18bn.
The agreement comes amid the fastest start to the year in global M&A since 2007, according to Dealogic, with a series of transactions worth more than $10bn underpinning the market’s return to form.
The details of the deal are set to be announced as early as Monday morning, according to people close to the discussions. Both companies declined to comment, but said on Friday that they were in late stage merger talks.
Bruno Lafont, chief executive of Lafarge since 2006, is set to become chief executive of the whole group. Thomas Aebischer, Holcim chief financial officer, and Rolf Soiron, Holcim chairman, are set to take the same roles but at a group level.
People close to the talks said that consultations have already begun on possible areas where the two companies will need to sell assets to appease competition authorities, with much of the divestments likely to be focused on the developed markets.
Holcim provides no figures but Lafarge estimates that it has 34 per cent of the market in France, 40 per cent in the UK, and 10 per cent in Germany and Spain. More than 40 per cent market share is the rule of thumb for competition problems.
Discussions between the companies have been going on for three months. Lafarge is being advised by BNP Paribas, Morgan Stanley, Rothschild and the Zaoui brothers. Holcim is working only with Goldman Sachs, with FX de Mallmann, the bank’s head of consumer retail, leading the talks.

(BFW) Altice, Numericable to Finance SFR Offer With Rights Offer, Debt

Altice, Numericable to Finance SFR Offer With Rights Offer, Debt
2014-04-06 17:57:59.677 GMT


By Matthew Campbell and Francois de Beaupuy
     April 6 (Bloomberg) -- Cos. to finance offer with EU4.7b
capital increase, EU8.8b of debt.
  * Carlyle, Cinven agree to sell 35% stake in Numericable to
    Altice for unspecified amount of cash, Altice shrs
  * Altice founder Patrick Drahi to chair combined SFR-
    Numericable group
  * Altice, Numericable comment in e-mailed statement
  * NOTE: Earlier, Vivendi to Sell SFR Carrier to Altice in $23
    Billion Deal NSN N3M8SX6JTSE8<GO>

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net
To contact the editors responsible for this story:
Andrea Snyder at +1-202-624-1831 or
asnyder5@bloomberg.net

FT: Eurozone governments warned not to rely solely on ECB

Eurozone governments warned not to rely solely on ECB

President of European Central Bank Mario Draghi speaks during a news conference in Frankfurt, Germany, Thursday, March 6, 2014, following a meeting of the ECB governing council. The European Central Bank has kept its main interest rate at a record low of 0.25 percent, holding off on more stimulus as economic indicators suggest the modest recovery is gaining strength. (AP Photo/Michael Probst)©AP
Mario Draghi
Senior European policy makers and business people have expressed concern that the debate over quantitative easing by the European Central Bank risks taking the pressure off politicians to pursue structural reforms.
“Monetary policy cannot do everything,” said a senior ECB official at the Ambrosetti Forum in Cernobbio, on Lake Como, this weekend. “People expect too much from central banks.”
The concerns echo a sense of growing frustration at the ECB that governments are keen to keep attention on the central bank’s reluctance to pursue easier monetary policy,to address low inflation, as an explanation for the eurozone’s weak economic performance. At 0.5 per cent in March, inflation in the eurozone is running well below the ECB’s target rate of just below 2 per cent.
On Thursday, Mario Draghi, the ECB’s president, said he would back more radical measures, including quantitative easing, to cope with “too prolonged a period of low inflation”. But he urged governments not to rely too heavily on central bank actions to restore growth.

“Monetary policy is important, but it’s not the only thing,” he said at Thursday’s press conference. “Structural reforms come first, because many of the problems of the euro area are structural.”
Asked about France’s request for more time to meet its 3 per cent deficit target, the ECB president called on governments not to unravel their fiscal consolidation efforts. “It is important that fiscal consolidation [ . . .] should adhere to the pre-agreed rules. Otherwise, trust is undermined,” Mr Draghi said.
Business people in Italy and elsewhere said monetary policy was not the key to stimulating growth.
“There have been years of inaction and there are huge structural issues,” said Rodolfo De Benedetti, chief executive of Italy’s industrial group CIR.
Marco Tronchetti Provera, chairman and chief executive of Pirelli, the tyremaker, called for more ambitious action on labour market reform in particular, to improve competitiveness.
“Competitiveness is the priority to create new jobs,” he said.
Company bosses across Europe have said that low inflation is not high on their list of concerns.

“I have few worries about deflation in Europe,” said Joe Kaeser, chief executive of Siemens, the German engineering conglomerate, in February.
“There is no genuine serious deflation risk,” agreed Jim O’Neill, economic adviser to the International Finance Corporation, and former chief economist at Goldman Sachs, at the Ambrosetti forum.
Lorenzo Bini Smaghi, an ECB executive board member until December 2011 and now chairman of Italian gas company Snam, said the unconventional monetary easing measures under discussion, such as buying bank loans, were untested and might not succeed. He added that assessing the value the loans the ECB would buy was complicated and that, anyway, banks might not be willing to sell them.
“We still overburden monetary policy with the macro challenges [Europe faces],” said Jacob Frenkel, chairman of JPMorgan International and a former governor of the Central Bank of Israel. “The solution to unemployment is not in monetary policy. It’s a mistake to put all the expectations on the ECB.”

WSJ : WhatsApp Rival Line's Hefty Sticker Price

WhatsApp Rival Line's Hefty Sticker Price
Mobile Messaging Service Needs to Justify Its Valuation

With Facebook FB -4.61% having shelled out $19 billion for WhatsApp, anyone buying into chat apps should prepare for sticker shock. When it comes to Line, an Asia-based app, prepare for two of them.

Line, developed by Korean Web-search firm Naver, 035420.SE -1.62% is the dominant mobile messaging service in Japan, and is becoming the top player in Taiwan and Thailand. Whereas WhatsApp is essentially a pure messaging platform, Line is ahead in coaxing users to pay for mobile games and virtual stickers.

Don't scoff at Line's stickers: 1.8 billion were sent in a single day recently. Most are free, but users pay a dollar or two for poses of, say, Hello Kitty. Some young users are giving up on words altogether.

Line's revenue expanded more than tenfold last year to $545 million. China's Tencent Holdings TCEHY -5.85% says WeChat and a companion chat app, Mobile QQ, together brought in about $95 million from games in the fourth quarter. Yet it has a much larger user base.

Naver's stock has nearly tripled in the past year. Its core search and portal business is probably valued at about $6.8 billion, or 15 times estimated 2014 earnings, says Nomura's Eric Cha. The remaining $18.2 billion of Naver's market cap is the implied value of Line.

Line has 400 million registered users, up from 300 million in November. It doesn't detail monthly active users, the industry standard. But Nomura estimates these are a bit more than half the total; 210 million implies a value of $87 each. That is about double the $42 Facebook paid per WhatsApp user but on par with estimates for WeChat's valuation.

Some premium is justified given Line's monetization prowess. Yet relative valuations assume Facebook didn't overpay for WhatsApp, which is far from certain. Using the same assumptions, Line is valued at more than 33 times sales. It isn't clear if Line makes a profit. To justify that multiple, investors must hope Line's stickers and games aren't a fad, and it has to add new markets. Indonesia, once a BlackBerry stronghold, is a big one that is up for grabs.

But given the glut of competitors, a lot has to go extraordinarily right for Line at this valuation. The biggest red flag in this industry is that sticker shock just doesn't seem that shocking anymore.

FT : No reason to give France more time to cut deficit says commissioner

BRUSSELS, April 5 – There is no reason to further extend a European Union deadline for France to cut its budget deficit, the EU’s top economic official said on Saturday, adding policy makers should have learnt the lessons of the debt crisis and stuck to agreed rules.
In June last year Paris got two more years, until 2015, to bring its budget shortfall below the EU ceiling of 3 per cent of gross domestic product (GDP), from a 4 per cent gap the European Commission expects it to have this year.

But after a government reshuffle this week, France said that while it agreed the deficit should fall, it wanted to discuss the deadline again as slower cuts would help the economy grow.
Under new EU budget rules, made stricter during the sovereign debt crisis to prevent runaway state spending, if a country ignores EU deficit reduction deadlines it can be swiftly fined.
EU Economic and Monetary Affairs Commissioner Olli Rehn, the only person who can propose a deadline revision, said there were no grounds for it.
“If I refer to the Stability and Growth Pact (EU budget rules), a new extension could only be justified if there were unexpected adverse economic events with major unfavourable consequences for government finances,” Mr Rehn told Reuters.
“I don’t see that there have been such unexpected adverse economic events since last June. On the contrary, the euro zone economy has actually been experiencing a strengthening . . . recovery,” Mr Rehn said.
His comments echo remarks from the top conservative candidate for European Commission president, and the head of the German Bundesbank, who both came out against granting France more time to cut its deficit, warning such a move would set a dangerous precedent for other EU states.
Official figures released on Monday showed the French deficit strayed off target again last year, reaching 4.3 per cent of GDP instead of the planned 4.1 per cent.
The situation has some resemblance to a dispute from 10 years ago, when France and Germany prevented the EU’s executive arm from stepping up disciplinary budget action against them, even though they failed to cut deficits under the existing rules.
The dispute between the two biggest euro zone countries and the European Commission lead to a watering down of EU budget rules in 2005.
Some among European governments then drew the lesson that they did not need to take seriously the EU budget rules, which limit government deficits to 3 per cent of GDP and debt to 60 per cent of GDP, because disciplinary action has no teeth.
Many policy makers believe this “original sin”, of the two biggest euro zone countries not respecting EU budget rules and getting away with it, was at the foundation of the sovereign debt crisis that started in 2010 when Greece revealed how unsustainable its public finances had become.
The Greek budget deficit, already well above limits in 2005 at 5.2 per cent of GDP, grew steadily after that to 15.7 per cent in 2009.
The full extent of the problem went undetected earlier because the Greek government was falsifying statistics and other EU countries would not give the Commission the right to check the accuracy of government accounts.
Asked if there was a risk that a large country like France would again try to undermine the new, stricter budget rules, Mr Rehn said: “Precisely because the policy makers of the euro zone are aware of that risk and should have learnt the lesson, we need to make sure that we respect those reformed rules of the smarter Pact.”
This time, Paris does not have Germany on its side. Berlin, now a model of fiscal health, has repeatedly said France must stick to the promises it has made on the deficit.
Mr Rehn said that if it does, it would be to France’s benefit.
“Recent economic history shows that those who have been able to take good care of public finances are stronger economies and have better growth,” he said.
“If you look at Germany, at countries that have reformed rapidly and effectively like Ireland, or Latvia or even Spain, you see that an effective and rapid turnaround of fiscal policy brings better results than letting things drag on,” Mr Rehn said.
By the end of April, Paris has to send the European Commission its fiscal plans setting out how it wants to bring its deficit within that target.

FT : Global economic recovery ‘hinges on reforms’

Global economic recovery ‘hinges on reforms’

The recovery in the world’s leading economies is strengthening but concerted action by governments is needed to rebuild lost dynamism, according to the latest Brookings Institution-Financial Times tracking index.
With the upturn in advanced economies gathering momentum, and emerging markets cooling off after a nasty scare early in the year, global growth is steady, but the near-term prospects of a rapid acceleration remain small.

This stable but subdued outlook will intensify pressure on finance ministers and central bank governors at the spring meetings of the International Monetary Fund this week to agree a co-ordinated plan to boost growth potential.
Eswar Prasad, an economist and senior fellow at Brookings, said: “The worst may be over, but prospects for a durable and sustained recovery hinge on whether national governments demonstrate their commitment to substantive structural reforms”.
The Tiger index – Tracking Indices for the Global Economic Recovery – shows that the global economy is “back on an even keel but remains bereft of a strong wind to fill its sails,” said Prof Prasad. Tiger combines measures of economic activity, financial variables and indicators of confidence, according to the degree to which they are all moving up or down at the same time. Using sophisticated statistical methods it can capture similar movements of data that are measured on a different basis and across many countries.
At the start of 2014, the overall level of the growth index dipped from levels reached at the end of last year but remains well above the scores in 2011 and 2012. Indicators of the strength of the recovery in real output for advanced economies are now considerably stronger than for emerging markets, suggesting that their recovery is more likely to endure.
The indicators of growth, however, are still below their levels in the immediate post-crisis period and in the long upswing before the global recession of 2008-09. Confidence indicators are back to pre-crisis levels, as indicated by buoyancy in many global stock markets.
The message from the Tiger index chimes with that of Christine Lagarde, managing director of the IMF, who said last week that the “global economy is turning the corner of the Great Recession, although overall growth remains too slow and weak”.
At the IMF meetings in Washington, finance ministers of the Group of 20 leading economies will be urged to move faster in implementing structural reforms, including trade liberalisation, sufficiently powerful to raise global growth forecasts by 2 per cent by 2018.
This would imply 22 per cent growth over the next five years, rather than the 20 per cent forecast in the World Economic Outlook published by the fund in October. The IMF and the OECD club of mostly rich nations believe that this target is realistic and Australia has adopted it as its main ambition for its presidency of the world’s main economic club.
The IMF’s latest forecasts, which are about to be published, are likely to show a weaker outlook for emerging economies than thought in the second half of last year, alongside greater resilience in advanced economies, especially for the UK, where growth has been surprisingly strong.
The IMF has already added geopolitical concerns to its list of potential vulnerabilities that might throw the global economy off course this year. Its other main worries are low inflation, particularly in the eurozone, and the potential for monetary policy normalisation in rich countries to hit poorer countries hard.
US
The US economy is gaining strength as confidence is high, unemployment falling and the fiscal tightening of 2013 has eased. The US Federal Reserve has begun tapering its asset purchases, but monetary policy remains exceptionally loose.
Eurozone
No longer in intensive care, the eurozone still has chronic problems to fix in its economy. Growth prospects are exceptionally weak and inflation extremely low. The European Central Bank has been less interventionist than its global peers, but may be forced to do more.
China
China’s economy is slowing and the authorities face a dilemma between stoking up another credit-fuelled investment boom, which will hinder rebalancing towards domestic consumption, and risking a much more rapid slowdown than planned.
Japan
“Abenomics” is a year old and showing success in boosting inflation expectations. This month’s rise in consumption tax will test the resilience of the recovery, while there are few signs of long-lasting structural reforms.
India
India has shown its vulnerable side in 2013 and slowed markedly, but strong action by the central bank and the prospects of a new government have renewed confidence. The current account deficit has narrowed but growth prospects remain weak.
UK
A remarkable return to good growth last year confounded many of those sceptical about the UK’s ability to recover while reducing its deficit. The big questions now relate to a bubbly housing market and terrible productivity trends.