UK on track to be fastest growing G7 economy despite slowdown

Markets breathe sigh of relief as 0.7% GDP rise proves lower than previous quarter but still meets forecasts

Katie Allen

A rise of 0.7% – a slowdown from 0.9% in the second quarter of the year – was in line with most forecasts. But after recent economic indicators showing a weaker housing market, and slower manufacturing and consumer spending, some had feared growth could be weaker. Relief in financial markets at the figures, which confirmed seven consecutive quarters of growth, gave the pound a boost.

Economists said that while growth remained strong, it was unlikely to return to the pace seen earlier in the year. Nonetheless, Britain is expected to be the fastest-growing economy among the G7 nations this year, with the International Monetary Fund (IMF) predicting a GDP increase of 3.2%, compared with the US at 2.2% in second place.

The Office for National Statistics said growth in the UK’s dominant services sector slowed in the July to September quarter and manufacturing grew at the slowest pace for 18 months.

Services remained the biggest driver of growth, followed by production, which includes manufacturing. Construction growth picked up in the third quarter, chiming with reports that housebuilding is at its strongest since 2007.

Compared with a year ago, GDP was up 3%, down from annual growth of 3.2% in the second quarter.

Business groups have warned that manufacturers in particular are being hurt by strains in the eurozone, where some economies are contracting and others are grappling with deflation. The manufacturers’ organisation EEF said the sector was still on track to grow at its fastest pace since 2010 and domestic demand remained healthy.

Taken as a whole the UK’s economy is now 3.4% above its pre-crisis peak in the first quarter of 2008. But in a blow to the government’s ambitions to secure more balanced growth, it is only the services sector that has exceeded its pre-crisis peak. Manufacturing and construction still have some way to go to make up lost ground, the ONS confirmed on Friday.

The economy also remains below its pre-crisis level when measured by head of population.

The Guardian, 24 October 2014

Task 11. Study the italicized words and expressions in the text above, be ready to translate the material in class.

Task 12. Watch Video 12.2. What economic phenomena is reflected in it? Give its definition quoting the appropriate sentence from the script.

Task 13. Watch Video 12.2 again toanswer the following questions.

1. What happened to the Consumer Index in the UK? What does it mean for the country’s economy?

2. What are white goods? In what context are they mentioned in the clip?

3. What do the red and blue lines in the report’s graph stand for? What is their correlation?

4. On what goods have prices been going down recently in the UK, according to the clip?

5. Is the UK Chancellor worried about the deflation? What does he say?

6. What is the UK average annual inflation, according to the Bank of England Governor?

7. Why does the Bank of England pursue a tough inflation target?

8. Why does the reporter say that the current deflation is not damaging the country’s economy?

Task 14. Watch Videos 12.3 and 12.4. What genre are they? What news is it – soft or hard?

Be prepared to make lexical and grammatical analysis of the briefs.

Task 15. Study the terms in the box below,watch Video 12.3 again and fill in blanks in the script.

bail out quarterly results bond auctions

oil leak strength of the dollar zone debt

peripheral eurozone country

Task 16. Translate the brief in writing at home. Are there any clichés in the clip?

A. …(clip title)...

European …1… finished lower as concerns over the …2… …3… …4… dampened investors’ appetite for risk, ahead of a flurry of government …5… …6… this week. They are also cautious while waiting to see what kind of …7… are revealed as US companies start reporting their …8-9…

Banks were the biggest losers due to their exposure to …10… …11… in …12… …13… countries.

Miners also lost ground as …14… prices were pressured by …15… …16… …17…. Speculation that Portugal may be the next eurozone member to need a …18-19…, knocked the euro to a …20-22… against the dollar. It has …23-24… now but at one stage slipped to one dollar 28.60.

…26… is …27… after the trans Alaska …28… was shut because of a …29…

Task 17. Watch Video 12.4 and fill in the blanks in its script with special terms and grammatical constructions typical of TV discourse. Identify a cliché in the piece.

What is one off? What style of discourse is this lexical unit typical of?

I. (clip title)……: ……..

Airbus has won the world’s biggest ever …1… …2… …3… – 180 …4… for Indian …5… …6… …7… IndiGo.

Most are of …8… …9… version of Airbus ’ …10… …11… A320, and the first …12-13… be …14… in four …15… time.

This gives Airbus a big …16… in its annual battle with its US …17… Boeing for …18… …19…. …20… in its …21… company EADS …22… …23… on news of the 12 bln euro …24…

II. (clip title)…: …

Not even …1… of Royal wedding …2… …3… help British …4… in November – the …5… …6… …7… rose to a …8… …9… during the month – a development that will raise further concerns about …10… …11… …12… …13… in the UK.

The …14… …15… was, though, mostly …16… …17… …18… of …19… and …20…, and analysts say that was probably a …21-22… event. …23… …24… also a sharp …25… in …26… …27…

III. (clip title)…: …

The price of …1… …2… …3… has been above …4… dollars a …5… for the first time in …6… months.

That comes amid …7… …8… …9… and growing …10… …11….

A …12… …13… forced two Norwegian …14… …15… to close …16…

And over the weekend the …17… …18… …19… had to be shut because of a …20…, though it has since has resumed …21… …22…

Task 18. Render the briefs in Video 12.4 into Russian in class.

Task 19. Get prepared to write a lexical quiz on the terms you learned in Videos 12.3 – 12.4.

Task 20. Watch Video 12.5 and transcribe its lead. What is the general idea of the clip?

Task 21. Watch Video 12.5 again and write down all numbers that you came across while watching the clip.

The following names may be useful to you

The Weald Basin Wytch Farm

Task 22. Answer the questions relating to Video 12.5 content.

1. Where is the UK new oil basin located?

2. Where is oil currently produced onshore in the UK?

3. What is a nodding donkey?

4. What is Al Fraser’s opinion on the new oil discovery and prospects of its development?

Task 23. Watch and listen to files No 14-26 in the subfolder GRAMMAR. Write down grammatical features in question to discuss them in class.

Task 24. Watch Video 12.6 to get its idea.What genre is the piece?

Task 25. Watch Video 12.6 again for information. Close the gaps below.

A. Nigel Farage says that:

a) the euro is …;

b) it was obvious that the countries such as … would never fit requirements to enter the eurozone;

c) the euro was not launched for …, it was launched for …;

d) the people that support the euro are the people that want …;

e) the Spanish economy and its debt …;

f) these countries like … are trapped inside …

B. Ken Clarke states that:

a) the British commentators have been forecasting the death of euro about …;

b) this crisis is not caused by the euro …;

c) Irish should have been all right if they …;

d) Ireland really followed the path of …;

e) the debt is bigger than …;

f) if the Greeks and the Irish should not been in the euro…

Task 26. Analyse grammatical and lexical features of the fragments below. What conclusions do you come to?

1. It was always gonna be doomed.

2. It was pretty obvious then that…

3. …there were countries that would never ever going to fit into that euro mold.

4. And there are some on this panel…

5. Thank goodness, we didn’t join the euro.

6. But I’m afraid what has happened in Ireland…

7. And frankly, thank goodness for that…

8. If they should not been in the euro, they’d be both belly up now.

9. Indeed, it’s quite obvious, there’s a great political commitment to it.

10. It bust Northern Rock in the United Kingdom, we were in sterling, and it’s bust all three Irish banks and the government rather rashly guaranteed the deposits of these three banks and the debts of these banks.

Task 27. Which of the two speakers (N. Farage or K. Clarke) sounds more emotional? Why? Put forward your arguments.

Task 28. Sum up the information of Video 12.6. Put it down in five sentences. Read them out in class to be interpreted by your group mates.

Task 29. Read the newspaper extract, and say what economic problems Ireland faced back in 2010.

Ireland’s economic outlook worsens

Ireland’s economic outlook worsened on Monday as the country’s central bank

cut its growth forecast for this year, with gross domestic product now set

to increase 0.2 per cent against previous forecasts of 0.8 per cent

John Murray Brown

Publishing its revised forecasts, the central bank said the recovery was unbalanced, because it was driven mainly by exports, as domestic demand continued to stall. It added “the continuing weakness of investment remains a considerable drag on growth.” Ireland’s economic woes will be further underlined with exchequer returns for the third quarter published later on Monday which are set to confirm a further deterioration in the fiscal deficit.

After announcing further bank bail-outs last week, the government said the deficit would hit 32 per cent of national income this year or 10 times the Maastricht1 fiscal guidelines for eurozone members. But stripping out the bank rescue costs, which officials say do not affect Ireland’s borrowing requirement this year as they have already been paid for using 10 year promissory notes, the underlying fiscal deficit forecast has been revised to 11.9 per cent this year, as against 11.6 per cent forecast at the time of last year’s budget.

The FT, October 3, 2010

Task 30. Watch Video 12.7 lead. What is the idea of the report you are going to watch. What do expressions negative equity and austerity measures mean?

Task 31. Transcribe Video 12.7 lead.

Task 32. Study the following word list.

to dwarf mortgage to brace oneself (for)

idle cranes social welfare to be trapped

betrayal nutritious scar / to be scarred

to jump on the bandwagon 21household

Task 33. Watch Video 12.7 in full.

What are the major sections that the report falls into? Compress each section into a sentence. Put them down into the following slots

a) …

b) …

c) …

d) …

?) …

Task 34. Watch Video 12. 7 again, fill in the gaps and make lexical analysis of the sentences below paying attention at phrasal verbs.

1. It doesn’t …1-2… but this was once George Osborn’s …3… …4… of how to cut your …5-6… to prosperity.

2. The …1… of his spending review …2… by the …3… …4… to public services here since 2008.

3. The problem is that the …1-3… in Ireland was …2…, and now a …3-5… …6… like the …7… on Dublin’s …8…

4. …1-2… on these …3… streets once hit half a million, now there’s …3… poverty …4-5… doors.

5. Now …1… to …2-3… …4-5…, the couple …6-8… for the next round of …9…

6. The …1-3… is even …4… in one of Dublin’s most …5… areas. The …6… brought …7…but the new homes and …8…are …9… by near derelict blocks.

7. They …1-4… but with money …5-6…, there are people still living here.

8. The …1… is …2… too – building sites …3… in the city, and homes lying …4… and …5… in the countryside.

9. The property …1… …2… the good times here.

10. Then banks …1-2…, and many builders simply …3-4… money to finish …5… like this one.

11. And now Ireland’s countryside is …1… with …2… estates – …3… to a boom built on a …4… of foundations.

12. …1… bankers, like London’s …2… much …3-5…

13. …1-2… the British, the Irish haven’t had the option of …3… more cash …4-6…

14. But some believe Ireland …1-2… any hope of an …3… by cutting too deeply at the bottom …4-7…

15. This time it’s Labour …1-4… and warning us of a similar …5…

Task 35. What stylistic device prevails in the sentences above? Why? Translate the sentences into Russian.

Task 36. Listen to the interviews in Video 12.7. People are talking with the Irish accent. Can you identify its features?

Task 37. What lexical units prevail in the interviews below? Fill in the gaps to answer the question.

A) Helena Hasler:

“At the height of …1… we were in over …2…. You know, we were …3… We were idiots, we never thought it would end. And we have …4…. We are struggling and we have to …5-7…”

B) Ferus Finlay:

“There are …1… where when the cupboard is …2… in the morning, there is nothing inside, when the fridge is …2… in the morning, there is no milk. So, yes, we get …4… coming to the …5… to start their education, and the first thing we have to do is to make sure they get a …6… …7… breakfast.”

C) Colm Cacarthy:

“If people look at …1… and say they’ve …2…, and the …3-5…, that rather assumes that there was an option to not …6… doing anything …7-8… and then everything …9-11…. There is no such option.”

Task 38. Listen to interviews below and:

a) close the gaps in the second interview;

b) make corrections in the scripts of both interviews (the phrases in question are italicised).

A) Ben Hasler:

“They’re constantly putting money into the banks which got us into this situation, eventually. They are throwing money around. There are poor people who can’t afford to pay their mortgage, can’t pay electricity or gas bills and that’s it. They are not getting any aid, that is making harder for them to get money. And it seems it would never end. ”

B) Belinda Pryce:

“Constant delays. We were supposed to get out of here …1… three years ago. We’re still here. I have a daughter who lives over here. She is told she won’t be out of here for five years. She …2-3… small children, she’s living in a …4-5… where there’s scattered people in, and emptiness, and a lot of …6… at night. Youngsters going around, …7… things lightening the flats, setting them on fire – doing …8… yobbery. And with three young children it’s tough. ”

Task 39. Read the following newspaper article, get its idea and translate the piece into Russian.

Ireland's economy fastest growing in European Union

Dublin government says 7.7% growth rate is reward after period of austerity and adjusts predictions for the year

Phillip Inman

Ireland’s economy has surged 7.7% in a year, according to official figures that appear to show the former Tiger economy has rediscovered its vigour.

A 1.5% increase in gross domestic product (GDP) in the second quarter pushed the annual growth rate to the highest in the EU after a strong rise in business investment and exports. The government immediately upgraded its growth forecasts for the year – for the second time in a week.

The finance minister, Michael Noonan, said: “When you’re in the catchup phase of an economy after a recession you'll get very high growth figures in the early stages, but as it settles I would hope we will have growth of around 3% for the next five years.”

Dublin said the news showed that the sacrifices of the Irish people, and policies designed to increase exports, had borne fruit. Ministers are already debating how to spend higher-than-forecast tax revenues, less than a year after the country finished its three-year EU-International Monetary Fund bailout programme.

With the budget deficit predicted to fall to 4% of GDP or below this year – well ahead of target – the government has said it will ease up significantly on further austerity measures in next month’s budget. Ireland still has huge debts following the bailout of its banking sector, and thousands of families remain in negative equity despite a resurgence in house prices that has seen values in Dublin jump 23% in the past year.

GDP grew 2.8% in the first three months of this year. The rise in the second quarter was driven by a 13% increase in exports and 1.8% rise in household spending, the largest annual rise in almost four years. However, fears that a return to the old property boom and crash cycle will return were fuelled by a sharp rise in construction output and rampant house price rises in the capital.

After the 23% rise in the past year, house prices in Dublin are now at their highest level in more than seven years.

Noonan said the recovery was strong and stable. “The government remains committed to building upon and sustaining this recovery and we will do nothing that will put it at risk,” he said. “The turnaround is a direct consequence of the policies pursued by this government and the sacrifices made by the Irish people.”

Conall Mac Coille, chief economist at Davy Stockbrokers, said: “The GDP data is finally reflecting the evidence from the surveys and the PMIs that the economy is recovering really rapidly. Every part of the economy – the export sector, construction, consumer spending – it’s all picking up together and that’s giving you these really strong growth rates.”

The Guardian, 18 September 2014

What grammatical constructions does the article contain?

Task 40. Answer the questions.

1. What has changed in the Irish economy in four years?

2. How is Ireland’s economy known?

3. List the reasons that helped Ireland to get out of the crisis.

4. The article mentions reasons of Ireland’s economic collapse back in 2008. What are they?

5. What sectors of Ireland’s economy are mentioned in the article?

6. Find several clichés and phrasal verbs in the article.

Task 41. Read the article for information. What genre is it?

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