Where Is the Growth in the Euro Zone?

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Dec. 4 (Bloomberg) –- Barclays Chief International Economist Julian Callow discusses where he sees growth in the Euro Zone ahead of the ECB meeting with Mark Barton and Anna Edwards on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Where's the growth?

Collects in the euro area, obviously looking at the composition with today's numbers.

It's likely we will see some positive growth coming from private consumption and maybe on the investment side, maybe a small contribution possibly from net exports meaning it would be the inventory number holding things back which is obviously quite an encouraging sign here.

If you then take a step back and a step back and you look at what's going on more broadly in the global economy and within europe, you are seeing this improving trend in business confidence.

We had a whole stream of manufacturing numbers and our estimate is the global manufacturing confidence is now the highest since april 2011. it is certainly sickening that there should be enough trend.

Does the ecb need to do anything to get money lending around the periphery of the eurozone?

I was interested in your note.

You said that they are still deleveraging sharply but it is helping to fund the real economy.

Is it really picking up?

Collects it is.

As a result, if you add together bowing from the banks and security assurance by the non- private financial sector, it is still expanding which is quite remarkable.

We are used to thinking this model that about 70% of the financing of the corporate sector of the euro area was coming from banks.

In contrast -- in the u.s. it's the other way around.

But we have seen since the crisis is that the issuance has stepped up with securities and that is really compensating as a narrative level in lending by the banks.

At the same time, there's a lot of granularity to focus on here.

In southern europe, the banks are contracting very rapidly.

They cannot access to capital markets and it's an interesting issue for the ecb and the european commission, the eu council.

They have to look at ways of actually generating stronger credit.

That is absolutely vital.

If these very tentative signs of recovery are to be sustained into a classic recovery which would of course be relying on business investment.

Talking about the recovery and this is obviously taking shape.

The investment is not there year-over-year, and the next exports are not there.

When will we get a more balanced recovery in the uk?

Collects i think the uk economy is the king more balanced, to be honest -- i think the uk economy is more balanced.

If you look at the growth and employment whereas if you were to take a step back a year or two, you were saying it was mainly in self-employed people maybe people losing their jobs and becoming temporary workers.

Now nearly all the growth in the uk jobs are coming from permanent employee use.

It has high-quality jobs growth that is behind the employment growth in the case of the uk.

The export numbers were disappointing in the third quarter but they are a little volatile and maybe they will be picking up and the trading volume is certainly shifting and picking appear.

Europe is picking up a bit which is a big help here for the uk.

You are right.

It is really lamentable just how bad business investment has been.

In the same time, if you look at the corporate sector, it is running a large aggregate surplus in excess of what it is actually spending which means and has the resources internally to drive investment.

They just need to actually have some comfort in spending and i think it will come soon.

The investment rate is a share of gdp is actually very low.

With a bit of luck, we're going to see this uk recovery continue to mature and look much more sustainable.

With a bit of luck or policy?

Are we expecting the chancellor to say anything that would get to those numbers?

Is lovely to speculate that we might get a few extra pounds in our pocket but frankly, the uk budget deficit is still running at quite a high pace.

It still running at i would say 6.5% of gdp so there's not a lot of margin.

I think the government and the chancellor are keen to get the deficit under control.

That means the deficit and gdp ratio is more like 3% said they don't really have the scope for any important taxes.

We talk about the improving job situation in the big number today and on friday, adp in the u.s.. what number might persuade the fed to start tapering this month ? good question.

It's exactly the question i asked our u.s. economists.

That is not just facing policy on this number.

The history of nonfarm payroll is that it does get revised up very significantly so don't just leave the headline number.

Probably and has to be something like 300,000 or more but also in the context where there are other signs in the u.s. economy and i would say on that point, we are moving there but we're not quite there yet.

For example, this report was signaling really quite soft investment in tracking indicator for the u.s. in the fourth quarter running just under 2% growth rate in we think third quarter will be realized so the signals are a bit mixed at the moment.

Get employment rate we think will surprise the consensus by coming in below expectations at 7.1% because there are a lot of government workers who were temporarily laid off which boosted the unemployment rate with the october reading and that will wash out with the november report we will get on friday so look out for a low

This text has been automatically generated. It may not be 100% accurate.

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