The headline “Bristol goes into administration” looked initially like a grave warning about the health of Britain’s metropolitan councils. On further reading it transpired that the story related to Bristol Cars. The specialist manufacturer made a huge hand-built two-door saloon with a massive Chrysler 8-litre V10 engine, named after a jet aircraft and costing about the same. The petrol consumption and price were so astronomic that Bristol itself dared not mention either of them on its own website. No great surprise, then, that they were only selling 20 vehicles a year. So it’s good news that the western city is not going bust; bad news that the only remaining wholly UK-owned car manufacturer is Morgan.
That is not to say Britain’s motor manufacturing sector is defunct. Last year it produced something approaching two million vehicles, the majority of them coming from volume producers such as Nissan, Honda and BMW. Judging by recent purchasing managers’ indices the sector is in better health now than it has been for years, despite continuing fallout from the financial crisis. The Bank of England will be conscious of the need to foster that success when it discusses monetary policy this week. It shouldn’t – because its job is to keep inflation anchored at 2% – but you can bet it will. The Old Lady has some catching-up to do (or so sterling’s supporters would argue) now that the European Central Bank has thrown down the gauntlet with last Thursday’s blatant threat that euro interest rates could go up at the beginning of next month.
Sterling was certainly still smarting from that challenge on Friday. It did not have an awful day but its discomfort was tangible. To a greater or lesser degree it was down against everything. Although the -0.9% monthly fall in the Halifax house price elicited no reaction at the time of its release it took investors only 15 minutes to decide it was a signal to sell the pound. By midday it had made a full recovery but the market was far from convinced and the move ran out of momentum.
Top billing for Friday went to the US non-farm payrolls figure which, not for the first time, turned out to be a non-event. The figure came in as a rise of 192k, at the top end of forecasts, together with a 27k upgrade to the previous month’s increase. There could have been no doubt about the usefulness of the figure. But investors had been fired up to expect a better-than-expected number so the dollar was unable to prosper. A volatile couple of hours gave way to a gentle decline as New York tidied up for the weekend. A strong 3.1% rise in US factory orders had no impact while an even stronger 69.3 reading from the Ivey purchasing managers’ index temporarily sent the Canadian dollar half a cent higher.
A slow start to the week brings nothing more than Euroland investor confidence and Canadian building permits. At midnight the British Retail Consortium reports on February’s sales and the Royal Institute of Chartered Surveyors reveals whether estate agents are seeing any less sign of falling house prices. In theory that means a quiet day.