And now to cap it all, Europe is in a mess again. But, at least headless Nick Sarkozy is getting something right.
Earlier this week Spain’s finance minister Pedro Solbes cut growth forecasts from 2.3 to 1.6 per cent for 2008. But with Spanish house prices falling even faster than its banks can buy up British banks, with Spain’s economy far more reliant on construction than most other economies, it seems likely this is just one of many cuts in forecasts to follow.
Meanwhile, the Eurozone PMI indices for manufacturing and services are now both getting into danger territory, with both below the critical 50 no-change mark for two months in a row. The manufacturing index dropped from 49.2 points in June to 47.5 in July and the services index 49.1 to 48.3.
The French composite PMI index now stands at a level which implies GDP will fall by 0.4 per cent. The German index is faring better, and is suggesting 0.2 per cent growth for Germany.
Meanwhile, the German ifo index reflects the business climate has been falling fast lately too. Both the ifo expectations and current conditions indices are at their lowest levels since the autumn of 2005, although it is worth pointing out the index has had something of a golden patch during this period, and is still above the historical trend.
But, in France, parliament has finally passed a law to scrap their 35-hour working week. This was of course one of the key reforms Mr Sarkozy has been gunning for.
It is a curious thing, but French productivity per hour is extraordinarily high. One possible explanation for this is that many French workers are understating how many hours they work. They know they can’t get their work done in 35 hours, so they are just putting in the extra time and not declaring it.
In the UK, the winner of the TV show the Apprentice won despite being caught out lying on his CV, and embellishing the truth. In France it appears they lie through understating the truth.
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