PMI data reinforces tale of three economies

Good, bad, worse in the US, UK and EU.

Today's Markit PMIs (standard reminder: purchasing managers at companies surveyed, aggregated into an index showing activity across the economy, normalised so that 50=no change) highlight the discrepancy between the Eurozone economy (still contracting, albeit less each month than it has been for the better part of a year) and the US economy (which is growing, and growing faster most months).

(Today's releases are the "flash" PMIs, compiled from the first 85 per cent or so of managers to respond; they are thus to be taken with a larger pinch of salt than normal)

The Eurozone composite PMI – covering services and manufacturing – rose slightly to 47.3. This is a nine-month high, but still represents moderate contraction of GDP:

 

Even worse is the manufacturing data. Again a nine-month high, it now stands at 46.3, and rose by just 0.1 from November.

Compare that figure with the US, where the manufacturing PMI showed a sharp increase to 54.2, signifying healthy expansion:

As ever, the UK data lies somewhere between the two:

The UK is undergoing a renewed bout of economic weakness as it heads towards the end of 2012. The all-sector Output Index from the three PMI surveys rose from 49.7 in October to 50.2 in November, edging above the 50.0 no change mark. However, despite the increase, the latest reading was the third-weakest since April 2009 and consistent with the economy sliding back into contraction after the temporary growth surge seen in the third quarter.

The UK data also highlights the folly of relying too much on the PMI information to predict economic performance, though. All through the double-dip recession, commentators were insisting, based on the strength of PMI data, that the ONS was mistaken. And even as it fell to new lows, the ONS recorded the massive growth of last quarter.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The Home Office made Theresa May. But it could still destroy her

Even politicians who leave the Home Office a success may find themselves dogged by it. 

Good morning. When Theresa May left the Home Office for the last time, she told civil servants that there would always be a little bit of the Home Office inside her.

She meant in terms of its enduring effect on her, but today is a reminder of its enduring ability to do damage on her reputation in the present day.

The case of Jamal al-Harith, released from Guantanamo Bay under David Blunkett but handed a £1m compensation payout under Theresa May, who last week died in a suicide bomb attack on Iraqi forces in Mosul, where he was fighting on behalf of Isis. 

For all Blunkett left in the wake of a scandal, his handling of the department was seen to be effective and his reputation was enhanced, rather than diminished, by his tenure. May's reputation as a "safe pair of hands" in the country, as "one of us" on immigration as far as the Conservative right is concerned and her credibility as not just another headbanger on stop and search all come from her long tenure at the Home Office. 

The event was the cue for the Mail to engage in its preferred sport of Blair-bashing. It’s all his fault for the payout – which in addition to buying al-Harith a house may also have fattened the pockets of IS – and the release. Not so fast, replied Blair in a punchy statement: didn’t you campaign for him to be released, and wasn’t the payout approved by your old pal Theresa May? (I paraphrase slightly.)

That resulted in a difficult Q&A for Downing Street’s spokesman yesterday, which HuffPo’s Paul Waugh has posted in full here. As it was May’s old department which has the job of keeping tabs on domestic terror threats the row rebounds onto her. 

Blair is right to say that every government has to “balance proper concern for civil liberties with desire to protect our security”. And it would be an act of spectacular revisionism to declare that Blair’s government was overly concerned with civil liberty rather than internal security.

Whether al-Harith should never have been freed or, as his family believe, was picked up by mistake before being radicalised in prison is an open question. Certainly the journey from wrongly-incarcerated fellow traveller to hardened terrorist is one that we’ve seen before in Northern Ireland and may have occurred here.

Regardless, the presumption of innocence is an important one but it means that occasionally, that means that someone goes on to commit crimes again. (The case of Ian Stewart, convicted of murdering the author Helen Bailey yesterday, and who may have murdered his first wife Diane Stewart as well, is another example of this.)

Nonetheless, May won’t have got that right every time. Her tenure at the Home Office, so crucial to her reputation as a “safe pair of hands”, may yet be weaponised by a clever rival, whether from inside or outside the Conservative Party. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.