UK manufacturing has grown at rates not seen in seven years, leading to a narrowing of the trade deficit.
Figures released by the ONS show that in November the manufacturing sector expanded by 0.4%, highlighting a growth rate of 3.9% over a 12-month period: the highest since March 2011.
Although a weak pound has led to a higher rate of inflation for domestic consumers, it has also made British exports cheaper abroad. Despite trade with the EU remaining largely unchanged, there was a sharp increase in exports to non-EU countries. Combined with strong global growth, this has caused the surprise expansion in the manufacturing sector.
In the three months leading up to November, the UK’s total trade deficit narrowed by £2.1bn to £6.2bn, primarily because of an increase in goods exports by 2.6% to £2.2bn. Between October and November 2017 the trade deficit actually widened by £0.5bn, mostly because of an increase in imports of fuels from non-EU countries. Over the year, the trade deficit narrowed by £4.3bn.
This is in stark contrast to the construction centre, which in the three months leading up to November contracted by 2%, the biggest quarterly fall since August 2012.
If forecasts are correct, the UK will have exceeded the 1.5% estimate put out in the November budget but will still lag behind the Eurozone and other G7 economies.
Black Friday Leads to Low UK Retail Sales
Quarterly findings published today by the Office for National Statistics (ONS) found post-Black Friday sales in the UK were at their lowest in 18 months.
The long-suffering British retail market saw growth of just 0.4% in the quarter, half what was gained in the previous three months. In the same quarter last year, sales grew by 1%. Analysts have attributed inflation and a fall in consumer confidence.
The Black Friday event, imported from the US in 2010 has led to a decline in sales. Purchases that traditionally happened in the pre-Christmas shopping frenzy are now taking place in November where strong competition to keep prices down mean smaller profit margins for retailers.
However the volume of goods sold in shops and online also fell by 1.5% in November. Growth in 2017 as a whole was just 1.9%, the smallest in four years.
(Photo: Stan Honda)
The Future of International Wire Transfers
After years of stagnancy in the traditional banking sector, major changes are rapidly taking place. As the world heads into an increasingly digital future, new financial technology is being created and new products are changing the way society does banking.
Banks and FinTech companies are already modernising their services and digitizing their operations. However, the real innovation will begin once they shift their focus from improving old systems to implementing entirely new technologies.
One of the most important financial services for businesses is the ability to send fast, secure, and cost-effective international wire transfers. Today, companies mainly use the SWIFT system to send and receive funds overseas. While it has its advantages, there are new technologies that are beginning to challenge this traditional transfer system.
The SWIFT Transfer System:
The SWIFT system is the most commonly used method for transferring funds internationally. Used by over 11,000 financial institutions globally, it’s one of the most popular and trusted ways to wire money. This member-owned cooperative has many advantages, although many disadvantages too.
Main Advantages of SWIFT:
- Provides the ability to transfer funds to anywhere in the world.
- Known and trusted system with high standards and minimal risk.
- Safe and secure transactions and top security defence.
Main Disadvantages of SWIFT:
- Transaction processing tends to be slow and can take up to 5 business days.
- Several banks can be involved in a single transaction leading to higher fees.
- Extra fees added to total amount due to currency exchange.
New technology in banking is beginning to challenge the gaps in the SWIFT system. Trends like blockchain and electric money technology are becoming more and more relevant as efficient ways of transferring money internationally.
How Can Blockchain Technology Affect International Wire Transfers?
Blockchain technology is a peer-to-peer network that is making its way into the banking industry. Its decentralized structure cuts out the need for a ‘middle-man’, leading to faster and less costly transactions. In addition, it is also much more secure than the SWIFT system.
Using Blockchain technology for international money transfers benefits both the bank and its customers. Banks can save precious time and resources while the consumer can transfer funds for a much lower fee, instantly. This will be extremely beneficial for smaller companies with limited resources who need an alternative to expensive wire transfers.
This technology has not been fully implemented, but banks have begun investing and testing blockchain based systems. Plus, with new blockchain startups on the rise, one can expect some major innovations that include this technology in the near future.
With this new technology being added, one can also expect banks to redesign and improve their user interface (UI) leading to a more enhanced overall customer experience.
Electronic Money Technology and International Wire Transfers
Another challenge that banks are facing is the increase of electronic money institutions (EMI). These FinTech companies offer cost-efficient and convenient financial services that are very attractive to customers.
Companies like PayPal offer an alternative to the SWIFT system for customers that need wire transfer services. Since EMIs issue electronic money as opposed to real money, they incur lower fees and faster transaction times than bank transfers.
With the increase in financial technology and innovation, society will see a major impact on the way international wire transfers are conducted . We can expect to see more EMIs offering wire services, better products, lower fees, advanced mobile capabilities, and a better overall banking experience.
Cryptos Rally Slightly
Following one of the worst crypto crashes since 2015, cryptocurrencies posted moderate recoveries.
Editor’s Remarks: Bitcoin dipped into four-figure territory at the nadir of the short-lived crash that many touted as the “end of cryptocurrencies”. However, most major currencies were up yesterday as they commenced a recovery. Ripple, which fell as low as $0.90, was up to $1.40 by midday, while NEO resumed its upward trend. Bitcoin’s recovery has been notably weaker than its smaller cousins, some of whom are up 60% in the last 24 hours against bitcoin. Ethereum gained back some of the ground it lost too and is settling in once more above the $1,000 mark.
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