By Roger Blitz, Leisure Industries Correspondent

Should we praise European football clubs for creating an international labour market or criticise them for failing to nurture homegrown talent?

Take your pick. According to the Swiss-based CIES Football Observatory, the proportion of players playing at clubs where they trained is at an all-time low of 21.2 per cent. Five years, ago, it was at 23.1 per cent.

Among the top five countries – England, Spain, Germany, Italy and France – the proportion is even lower, at 16.5 per cent. All charts are from the CIES’ latest report.

 

No surprise, therefore, that the percentage of expatriate players is at a record high of 36.8 per cent, as the transfer market continues to flourish. Many of them are Brazilians, with 471, though in 2009 there were 538 plying their trade in Europe.

The most likely place to find a club-trained player is Sweden, Slovakia and Finland. The least likely is Italy, Turkey and Russia. English clubs are producing only 13.6 per cent of club-trained players, Germany’s proportion is not much better and they are both well behind Spain and France. Read more

By Claer Barrett and Kiran Stacey

Last autumn, George Osborne came to the Commons to present his Autumn Statement against the backdrop of a stagnating economy and a recent credit downgrade. His speech was full of language about continuing with “Plan A” despite ongoing concern over whether it was working.

This year was very different. With massive increases in the OBR’s growth forecasts, this was in effect the chancellor’s victory speech: in his words “the plan is working”. But there were also plenty of warnings against voting for Labour instead.

Here’s a quick, fun, look at how the language has changed….

The Chancellor was keen to put a positive gloss on continuing austerity while the economy is picking up, promising to “fix the roof when the sun is shining”.

2013 = 2 mentions
2012 = 0 mentions

Armed with a rosy set of forecasts, the Chancellor was able to boast
confidently about his economic strategy: “The plan is working.”

2013 = 3 mentions
2012 = 0 mentions Read more

For the legions of China-watchers within the world’s investment community, there have always been two difficult questions. One, which applies everywhere, is to look at the figures and to ask whether growth can continue, or if a bubble is forming. A second question, much more specific to China, is whether the figures themselves are genuine, and whether words can be taken at face value.

For an example, take the reforms announced at the Communist party’s plenum. They were very well-received, but followed by much analysis asking if the reforms were what they seemed.

It is not a new problem. Nobody is sure whether they believe the numbers coming out of China. Even Li Keqiang, now China’s premier, once commented that the nation’s gross domestic product figures were “man-made” and not to be trusted.

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Releasing market-moving data in full at an appointed hour ought to be a non-negotiable obligation of any government statistics agency. Yet it is a task that often proves too much for the Office for National Statistics. Official data are published by newswires at 9.30am on the day of release but there is often a delay before the same information appears on the agency’s website.

This week the UK Statistics Authority, which oversees the work of the ONS, rightly insisted that everyone should be able to access official data on equal terms. An obvious solution would be to fix the ONS website. Yet the UKSA also floated a more drastic proposal in which the ONS would no longer release reports in full on the morning of publication, instead dribbling out the numbers over the course of a day.

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There is a myth that the London Olympics were delivered within budget. This claim was used recently by David Cameron, the British prime minister, to win support for the proposed high-speed rail line to Birmingham.

The principal relevant facts are these. The first detailed specification of what was needed for London to host the games was drawn up in 2002 by Arup. The report by the engineering and planning consultancy put the cost at £1.8bn, much of it to be privately financed. An extended assessment was then commissioned by the Department of Culture, Media and Sport from PwC. The financial consultancy’s 2003 report estimated the total cost at £3.1bn, requiring a public subsidy of £1.3bn. The balance would be recovered from the private sector and from asset sales after the games. According to PwC’s risk assessment, the probability that the taxpayer would need to provide as much as £2bn was less than 5 per cent.

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By Andrew Jack

The global sales of prescription medicines is starting to accelerate and will reach $1 trillion next year, according to new estimates from IMS.

The data shows slowed growth since the 2008 financial crisis, when the loss of lucrative patents on drugs pushed down prices for drug companies just as the economic slowdown imposed austerity measures by governments and squeezed incomes by individuals paying out of pocket for healthcare. Read more

The Office for National Statistics has just published October 2013 inflation figures. These show the consumer price inflation rate falling from 2.7 per cent in September to 2.2 per cent last month, a much greater fall than the average of economists’ expectations of a drop to 2.5 per cent. The discredited retail price index, which is still used to uprate index-linked government bonds, rail fares and other utility bills fell from 3.2 per cent in September to 2.6 per cent. The essential news and context comes in the following five charts.

1. Inflation falling faster than Bank of England expected

The BoE produces quarterly inflation forecasts. In the third quarter, its economists’ central forecast was that CPI inflation would stand at 2.8 per cent. It came in at 2.7 per cent, which was well within the normal margins of error. The early indication of the fourth quarter with inflation falling to 2.2 per cent in October, is considerably below the BoE’s 2.9 per cent central forecast. Again, this reading well within the margin of error. The bank estimated a 17 per cent probability inflation would lie between 2 per cent and 2.5 per cent this quarter, showing just what an imprecise science short-term inflation forecasting is.

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By David Donald of the Center for Public Integrity and James Politi. Interactive graphic by Caroline Nevitt, Tom Pearson and Martin Stabe.

Map: US sequestration impact per capita

US sequestration impact per capita

Automatic US government spending cuts that took effect in March are threatening local economies across the country.

Counties that benefited from high levels of federal spending in recent years and weathered the recession better than the rest of the country could be especially hard-hit, an analysis of so-called “sequestration” by the Financial Times and the Center for Public Integrity has found.

Update, 3 October: The New Mexico county that is home to the Los Alamos National Laboratory, faces the greatest per-capita impact of any county in the United States, at more than $6,000 per person. Areas with military bases, such as Christian county, Kentucky, are also particularly hard hit. Across the 388 counties in the US that have one or more military installation, the sequestration impact per capita is $312. That is nearly twice as high as in the 2,727 counties without a military installation, where the sequestration impact per capita is $171.

Use the interactive graphic below to see how the impact is distributed around the United States and how your county fares.

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by Alistair Hayes

Another round of Premier League football, another weekend of foreign domination.

Of the 29 goals scored in last week’s Premier League, 21 were scored by non-England-qualified players, providing plenty of ammunition for the many England fans who contend that domestic players are being prevented from reaching world class by a seemingly endless stream of foreigners.

But would a reduction of overseas talent in the Premier League – whose players hold 91 nationalities – allow more English players to rise to international class? Would it be the panacea most onlookers – from the man in the pub to the national manager Roy Hodgson – seem to think it would be? Or is it that they are simply not good enough to compete on the international stage? Read more

by Roger Blitz, FT leisure industries correspondent

Going on a cruise conjures images of luxury travel, affordable only for the rich and those suddenly wondering what to do with their retirement savings.

Yet the price of a cruise for UK passengers has been steadily coming down, as cruise liners fight hard to convince consumers that their trips are affordable and value for money. Read more

Ever feel like you are slipping behind in the rat race? Well, Londoners now face competition from their homes as well. The average house in the capital is now earning as much as its occupants.

As we noted noted last week, London house prices are rising far faster than in the rest of the UK, up 9.7 per cent over the 12 months to July on ONS figures.

With the average London house costing £438,000, the capital gain was worth £38,729. By comparison, the average London household had a post-tax income of £38,688 in 2011, the last year for which the ONS has statistics.

We appreciate that the comparison of an average apple to an average pear is useful only to illustrate the size of the bubble gains from market enthusiasm. We’re ignoring capital gains taxes, hefty transaction costs, and the difficulty of extracting that value while still having somewhere to live.

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Guest post by Paul Hodges

Whilst the number of working women in the UK continues to rise, since 2009 their total earnings have been falling in real terms. With consumer spending contributing to roughly 60 per cent of the UK economy, this has important implications for the sustainability of the current recovery.

Nearly 14 million women are working today compared to nine million in 1971, whilst their participation rate in the workforce has increased from 59 per cent to 75 per cent today.

There has also been a sustained rise in women’s pay relative to men.

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Britain’s ranks of managers have risen to more than 3m and are on the brink of overtaking the number of skilled tradesmen such as electricians, plumbers and carpenters.

The number of people classed as managers, directors and senior officials has grown by 7.8 per cent over the past two years to 3.113m, more than a tenth of the workforce, according to data from the Office for National Statistics – the fastest rise of any broad occupational group.

Over the same period, the number of people in skilled trades dropped by 2.2 per cent to 3.137m. Falls were also recorded in sales and customer services staff, process, plant and machinery workers, and “elementary” occupations, which include bar staff and security guards.

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by Roger Blitz, leisure industries correspondent

Football’s frenzied summer transfer window ends late on Monday, with a flurry of deals set to take Premier League clubs’ total spending beyond £600m, breaking the 2008 record of £500m by a distance. Read more

by Roger Blitz, FT leisure industries correspondent

Weather prospects are mixed for the UK’s tourist attractions and businesses over this long late-summer bank holiday weekend. But the sector has received a boost from new data showing that tourism outflanked all other sectors in jobs growth in the year before the London Olympic Games. Read more

This week, Britain is baby obsessed. But amid all this fascination with the new prince, there is a bigger question that investors might do well to ponder: namely, where are babies not being born right now, in the western world?

A striking report that has just emerged from Eurostat, the European statistical agency, shows that a subtle gap has emerged in the fertility trajectory of different European countries during the past couple of decades. In regions such as Spain and Italy, fertility rates have declined sharply since the 1970s (albeit from relatively high postwar levels.) However, in the core countries of the eurozone, such as Germany and France, fertility rates have been flat or even risen.

More interesting still is the recent picture. Between 2008 and 2011 the fertility rate in Austria rose a little, while in France it stayed unchanged and in Germany and the Netherlands it declined a touch. However, the fertility rate in Spain, Greece and Ireland has notably fallen. And the contrast among some population groups is stark. In Germany, the fertility rate among unemployed women has risen since 2008, for example, perhaps because the crisis created “a window of opportunity for child-bearing”, as a research note from Jefferies, the broker suggests. “In Spain, however, the opposite has happened and the fertility rate for this group of women has actually collapsed.” Read more

by Roger Blitz, FT leisure industries correspondent

Uefa has revealed the breakdown of revenues from the 2012/13 Champions League for the 32 participating clubs. The striking feature is that Juventus topped the table by some distance – despite going out in the quarter finals. Read more

A press release from the Department for Work and Pensions on Monday boasts that “the government’s wage incentive scheme has encouraged UK businesses to offer over 21,000 jobs to young people at risk of long-term unemployment”.

This sounds like great news. Youth unemployment remains persistently high. But a look at the statistics suggests the government’s claims are cause for scepticism.

Since April last year employers have been offered temporary wage subsidies worth up to £2,275 to encourage them to employ 18-24 year olds on the Work Programme, the government’s flagship scheme for trying to get young people into jobs. In July and December, eligibility was broadened: now employing any 18-24 year old who has been on benefits for more than six months can earn employers a subsidy.

The 21,000 claim by the DWP refers to the number of subsidy forms submitted by employers under the “youth contract”. An application can be made when a young person starts a job. As you can see from the table below, the numbers were steady at about 1,000 a month before increasing after the youth contract eligibility was widened.

 

Month Job starts
Apr-12 490
May-12 720
Jun-12 840
Jul-12 1,060
Aug-12 1,030
Sep-12 1,120
Oct-12 1,350
Nov-12 1,200
Dec-12 880
Jan-13 1,160
Feb-13 2,000
Mar-13 2,660
Apr-13 2,780
May-13 4,180
Total 21,460

Source: Management Information (from Work Programme providers and Jobcentre Plus Labour Market System)

However, starting a job is not the same thing as staying in a job.

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By Paul Hodges

Working women supercharged western economic growth from the 1980s, as they created the phenomenon of dual-income households for the first time in history. But today, this trend is reversing as women’s participation rates decline and their earnings plateau relative to men.

This major change risks undermining a key part of the US Federal Reserve’s strategy, which assumes that reducing the US unemployment rate to 6.5 per cent will help restore economic growth. The chart shows the reversal now underway:

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Greek prime minister Antonis Samaras, centre, holds a cabinet meeting this week.

Just how off track is Greece’s €172bn second bailout? When the FT reported that a new €3bn-€4bn financing gap had opened up in the programme, EU and International Monetary Fund officials went out of their way to insist there wasn’t a gap at all.

“There is no financial gap. The programme is fully financed for at least another year, so there is no problem, on the premise that we reach a final agreement on the review in July,” said Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup.

IMF spokesman Gerry Rice weighed in with a written statement: “If the review is concluded by the end of July 2013, as expected, no financing problems will arise because the program is financed till end-July 2014.”

Notice the caveats, however. Both Dijsselbleom and Rice say there won’t be a shortfall – as long as the IMF is able to distribute its next €1.8bn aid tranche before the end of July. Why? Because of the new financing gap, which means the Greek programme essentially runs out of money in July 2014. The IMF must have certainty that Greece is fully financed for 12 months or it can’t release its cash, so after July, it must suspend its payments.

Lest any doubt remain, let’s turn to the European Commission and IMF reports on Greece, which make this abundantly clear. When the second bailout programme began early last year, the European Commission’s initial report contained a chart showing projected quarter-by-quarter aid payments that looked like this:

In the latest review, issued earlier this month, the same chart looked like this:

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