European car sales continue to fall. There was a 10.7% decline in March, led by a 17.1% annual fall in Germany. France was down 16.2% and Spain 13.9%. UK sales were up 5.9%.
We have witnessed 18 months of falling European car sales (excluding the UK), with the latest figures showing an acceleration of the decline. The IMF has warned that Eurozone GDP will fall by 0.3% this year, which may prove optimistic. The Euro is forcing austerity policies onto the south and west of the zone. It is also impeding monetary growth in the weak countries. The Cyprus bank bankruptcy has n ot helped confidence, and has revealed the dangers of depositing money in weak banks in weak countries in the zone.
Meanwhile, after a period of good growth in employment in the UK, last month saw an unwelcome rise in unemployment, though the claimant count fell in March. Private sector pay is scarcely growing, at just 0.5%. Total pay is just 0.8% higher than a year earlier, with public sector pay continuing to rise faster than private sector. Public sector pay is up by 1.7%.
It looks as if the considerable attempts to ease money in the UK are still being held back by tough regulatory requirements on banks, and by delays to sorting out the balance sheets and loanbooks of the troubled banks with state involvement. Some money is now getting into the residential property sector, but some banks remain unwilling to lend new money for commercial property. The UK has scope to do more to ease the position, as it still has its own currency and monetary policy. It needs to sort out the troubled banks more quickly and thoroughly.
The IMF is going through a very bad period for economic forecasting, constantly forecasting second half recoveries in advanced countries that do not materialise. It is also at war with it self over whether spending cuts help or hinder economic progress. The IMF used to believe that high deficit countries had to cut. Now some of its people are querying this. They are finding it very difficult to understand and forecast the Eurozone, regularly being too optimistic on output and incomes.