UK economy shrinks 1.9% - the fastest rate for 30 years

The news was reported in all newspapers and other media. In BBC news they used a graph showing the GDP growth since the 1990. It was saying that the UK economy shrank 1.9% in the first three months of 2009. This is much worse than predicted and it is the worst 3-month drop since the third quarter of 1979. Then the article continues by briefly explaining what GDP means. According to the Office of National Security (ONS) the economy is still in deep depression and there is ‘weakness to come’. However it is not going to be as bad as now. Those are the worst six month figures since the ONS started publishing the statistics. The chief secretary to the Treasury Yvette Cooper said that they believe the economy will start to recover. The article uses lots of quotes by different people such as economists and other experts. In general they think that the figures and predictions made earlier were too optimistic and there still will be a decline of the UK economy throughout 2009 but not as big as the first quarter.
The article in The Sunday Express was much shorter compared to BBC news. They provided information but almost without any quotes and analysis. However, James Hughes, chief investment officer of Black Swan Capital said for Express.co.uk that ‘there is still pain to come’. He also said that the later stages of the crisis will be characterised by rapidly increasing inflation and further weakening of the sterling.
In the beginning of their article the Guardian explained about the 1.9% decrease and that it is the worst for the past 30 years, but they emphasised on the fact that now there are doubts about Alistair Darling’s budget and the Conservatives were quick to launch an attack against him. There were included interviews with analysts and economists saying that Darling was far too optimistic and that he will need to borrow 175bn pounds this year. The Guardian as well used the interview with James Hughes. The article continued with further analysis and predictions. The IMF, for example, is on the same opinion as Darling that the UK economy will suffer less than other countries, but there will be recession for at least one more year.
Bloomberg and the FT reported the news using more data and numbers and analyzed the situation deeper. They included figures about the unemployment rate and the budget deficit. The FT compared UK’s economic condition to other countries and the predictions show that the UK’s GDP decrease in the following 2 years will be close to the average of all advanced countries and slower compared to Germany and Japan. Bloomberg also analysed the situation for the European economy as a whole and it doesn’t look good for other countries as well. The best that can be said is that the rate of economic decline may slow down in the following months. However the situation doesn’t look good for the UK with increasing deficit, rising inflation and unemployment and weakening of the pound. In order for the economy to get better, consumers should become more confident again, however this will take time and resources.

Ford loss smaller than expected

In the first quarter of 2009 Ford reported a loss of $1.4 billion, which was better than the forecasts of the analysts. Because of the news, the shares of the company increased by more than 16%. This was reported by the company in their website as well as in the websites in major news companies, such as The Financial Times, BBC News, Bloomberg, The Wall Street Journal and The New York Times.
The Financial Times reported the company didn’t need emergency aid from the government like General Motors and Chrysler did. The newspaper interviewed Alan Mulley, Ford’s chief executive as well as an analyst from Goldman Sachs. Allan Mulley said that the company has a more stable position in the US and a higher market share in Europe. Ford said that they expect to break even on a pre-tax basis in 2011. They also said that they expect further slowdown of cash outflow as it continues to cut costs aggressively. Financial Times used mainly comments and opinions of other people and didn’t write their own opinion about the situation.
BBC news wrote that Ford has better-than-expected results and they don’t need government aid. However, two of Ford biggest rivals General Motors and Chrysler have taken billions in US government aid and still face bankruptcy. BBC used more figures about the company and compared them between years and geographical departments. They commented more on the cost-cutting strategy of the company and in overall the article was positive towards the improved performance of Ford.
Bloomberg as well started off by saying that the company is working to avoid a federal bailout, but they continued by explaining about the cost cutting strategy. The company decreased cash consumption by 49%. Bloomberg also included an analysis of the share price, which were at its highest since September 19. The article continues by saying that even though they managed to decrease costs and to do better than expected, Ford still generates high loses, because of US sales decreasing by 43%. For the analysis of the company Bloomberg used mainly their own word and didn’t have many quotes. Bloomberg than analysed the current market environment by using quotes from the Chief Financial Officer Lewis Booth: ‘This is a very, very difficult environment’. Bloomberg examined more data compared to the BBC and the FT and they investigated in depth the source of the decreasing costs of the company. The manufacturing and engineering savings accounted for the largest piece of Ford’s first-quarter cost reductions.
The longest articles were by The Wall Street Journal and The New York Times. They used longer quotes from interviews with Allan Mulley and they analysed the situation using more explanations. They also showed more figures, such as the exact number of vehicle sold in the first quarter – 973000. They also wrote about the workers in the company and projects which Ford has, such as the new Fusion hybrid sedan, and the recently started program that covers monthly payments for buyers who lose their jobs.
In their website Ford has published all of the figures including the net loss, the gross cash and they also compared it with 2008. They also announced their future projects and aims and a statement made by Allan Mulley. All of the news included the quote that Ford will ‘meet or beat its financial targets’ and according to the company they have enough cash to last through at least 2010. The opinion of some analysts is that GM and Chrysler are likely to file for bankruptcy in the following weeks, but this is not the case for Ford.