Beach Hut
Brighton Bhuna Boy
Amongst the gloom at least we are not like Greece, Portugal or Spain where things are far worse
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The UK is now back in recession it is official
- Thread starter Uncle Spielberg
- Start date
Uncle Spielberg
Well-known member
- Thread starter
- #102
That much is true BH. I have taken you off my ignore list as that was childish of me. I hope we can move on.
Beach Hut
Brighton Bhuna Boy
Wahay, now where do I start........
The point is more at least we have a government and opposition keen to work our way out of it although naturally they disagree.
At least we don't have general strikes
I think the term used was "is expected to" not "is"
Mellor 3 Ward 4
Well-known member
You do know that Ed Balls was adviser to Gordon Brown when he was Chancellor don't you?
Remember that Ed Milliband only appointed Balls as Shadow Chancellor when Alan Johnson resigned.(Althogh to be fair, he is a much more able Economist than Johnson)
larus
Well-known member
IF there is a confirmed contraction of 0.1%, this is well within the 'margin of error' for these type of statistics. The problem is measuring GDP is not an exact science.
If we'd carried on the Brown & Balls policy of borrowing, the rate of interest we'd have to pay on new gilts would have risen, which then results in less money to be available to be spent on the real economy.
Why can't people see that we need to live within our means. All of this borrowing/debt will need to be repaid by future generations. It's not right. We need to adjust the welfare state/education/NHS/Armed Forces to reflect what the country can afford. This includes getting more people out of the mindset of "I'm entitled to these benefits; it's my right". It's not a right, it's coming out of someone elses wages.
If we'd carried on the Brown & Balls policy of borrowing, the rate of interest we'd have to pay on new gilts would have risen, which then results in less money to be available to be spent on the real economy.
Why can't people see that we need to live within our means. All of this borrowing/debt will need to be repaid by future generations. It's not right. We need to adjust the welfare state/education/NHS/Armed Forces to reflect what the country can afford. This includes getting more people out of the mindset of "I'm entitled to these benefits; it's my right". It's not a right, it's coming out of someone elses wages.
Arkwright
Arkwright
I run a small Village Shop and Post Office with a small B&B, for the first 3 months of the year we are about 20% up on turnover yet the profit is the same as last year. The problem is running costs with suppliers of services and goods are ever increasing. We are in a position where we would like to employ staff but we can as profits won't allow us to.
From talking to other local businesses we are all in the same boat. We desperately need fuel, energy and bank fees to come down in order for small business to re-invest.
Basically while times are hard they are not as hard as the media would let you know, we need the big companies to stop worrying about shareholders and pass profits back to users to help with growth and developement of small business.
From talking to other local businesses we are all in the same boat. We desperately need fuel, energy and bank fees to come down in order for small business to re-invest.
Basically while times are hard they are not as hard as the media would let you know, we need the big companies to stop worrying about shareholders and pass profits back to users to help with growth and developement of small business.
Uncle Spielberg
Well-known member
- Thread starter
- #108
It is true lots of organisations are sitting on millions of pounds in the bank too scared to spend it or invest it.
Albion Rob
New member
Whilst I agree with you about living within our means, there needs to be some sort of payoff for the current crop of 18-40 year olds. House prices are astronomical (especially down here), petrol prices are going through the roof, it is costing more and more to heat one's home and there seems to be very little at either end of the qualifications scale - if you leave school with no qualifications then it's hard to find anything the will lead to much (in the past apprenticeships helped a lot of people who found their way in their later teens) and graduate employment has gone through the floor.
I know there are a lot of other debates around Mickey Mouse degrees and this whole notion of entitlement: "I must have Sky, I must have the best clothes etc." but I do think that some sort of deal needs to be struck with the younger generation because at the moment all it seems to be is: "Look, your parents and grandparents have bought up all the houses, started the longer term debt cycle and used up all the cheap oil so now you need to rebalance things to make sure the generation that follows you isn't left in the shit."
I don't know what such a scheme/deal would look like but at the moment there seems to be a lot of pain and not much to look forward to for a lot of people under 40. I wonder if last year's riots were truly a one off or whether they'll become more frequesnt as more and more people begin to see themselves as the screwed generation.
larus
Well-known member
I think you'e misunderstood my point. I actually agree totally with what you're saying, and these 2 things are connected.
Firstly, house prices. These are insane; really insane.Let's assume it costs say £200k to build a nice 4 bed detatched house (that's pure build cost, fixtures, fittings etc). Then, say in Haywards Heath,Brighton, etc. these sell at £500k, that makes the land and profit £300k. Yet people still argue that they are 'worth it', it's down to supply/demand, etc, etc. Logically, it doesn't make sense. It does for those who have the wealth, but not for those who are starting out.
Look at the situation with pensions. When the state pension was introduced, there were the 'baby-boomers' beginning to enter the work place, all paying taxes, and a relatively smaller percentage of pensioners. Now, these 'baby boomers' are starting to get to retirement age, so the percentage split of those in work to those not working has changed and is forecast to continue to change. The knock-on effect of this is an increase in costs on the welfare state/NHS, plus increased pension costs, yet a diminishing pool of tax-payers. Yet, these baby-boomers still want to hold onto all of their 'gains' in wealth, just because they happen to own a house. It's morally wrong, yet all of the politcal parties are failing to be honest with the reality of the situation.
The young are getting screwed IMO (oh, BTW, I'm 49, and sold my 4 bed house last year and have decided to rent as I believe there will be a house price correction in the near future). I have a son and daughter, and I think the debts which we are loading onto them for university is wrong (compared to pervious generations), and the expectation of repaying the countries debts (which have been accumulated by the same older generation(s) who have their 'wealth' in their houses, and their nice state pensions, etc) is unfair. Then we wonder why the youth feels resentment.
The balance with society is wrong IMO. A few thoughts:
1 A house should be a home; somewhere you live and not an investment vehicle.
2 The welfare state should be seen as a safety net; no more. It shouldn't be a lifestyle choice.
3 Taxation should be fair at BOTH end of the scale.
4 Interest rates should be fair; at present savers are being penalised to bail out the debtors.
5 Incentives should be given to rebuild our manufacturing/industrial base. Regulations should be put in place to 'encourage' the City to adopt a long-term view on investment.
I believe in free enterprise and being able to get rich through hard work/risk taking. I don't think that this success should be taxed excessivley, but I also feel that there is too much abuse of the tax system and too many loopholes for the wealthy. By this I mean those earning more the 7 figures; I wouldn't class someone on a 6 figure salary in the same bracket.
Albion Rob
New member
Yes, think we're coming at this from pretty much the same perspective. Interesting that you sold your house. Takes a lot of balls (and I say that as someone on the ladder, albeit at the bottom end) but I agree that a correction could be around the corner in the not too distand future.
larus
Well-known member
I was moving to Haywards Heath area and wasn't too sure where I wanted to end up long-term. Decided that house prices weren't going to go up, and took the view that at best they would stagnate. So, the cost of buying/selling and the lack of flexibility swayed me to step-out for say 12-24 months, rent, and be in a position to look around and if there is a correction, be able to take advantage.
There are 2 things 'supporting' things in the SE at present; 1, the London effect of high prices due to foreign buyers and the ripple out effect and 2, supply/demand. However, although house prices haven't moved in say 3 years, the 'real' effect has been a depreciation. This is due to inflation being say 5%, and also, the devaluation of sterling. This means that your pound is worth less (or even worthless
) so, in effect, house prices are worth less.34064 Fighter Command
New member
There's a lot of truth in this - in fact the whole concept of economic growth depends on the concept of interest and paying back more money on a loan than you originally borrowed. Otherwise there is absolutely no way that the value of goods and services increases in real terms.
Restrict borrowing, and you restrict peoples ability to spend and generate economic activity. Ultimately wether you choose to class expenditure as 'public sector' or 'private sector' is completely irrelevant. It doesn't matter who is spending the money, merely the fact that money is being spent.
Unfortunately the Coalition economic policy is stifling the flow of money in the same way as a tournequet stifles the flow of blood. While it's nice for the Chancellor that all this' blood' (money) is accumulating in to very few organs ( rich investors / hedge funds etc ) of the body, the rest of the organism (economy) is slowly but surely being starved to death.
As long as banks and businesses sit on money and don't do anything with it, then it's usefulness as a resource is curtailed.
George Osbourne seems determined to stop spending money. It's a bit like every dad in one town telling there kids that there's going to be no pocket money given to them for 5 years, and then wondering why the sweet shop, sweet manufacturers and dentists all go out of business.
34064 Fighter Command
New member
Which is crazy because ultimately inflation will erode it's value. Money intrisically is worthless, it is only the things that you purchase using it that have any worth.
sten_super
Brain Surgeon
And today the British Chambers of Commerce have announced that their survey results for Q1 were higher than previously, and they expect the economy to grow by 0.3% in the quarter.
BBC News - UK economy
I don't really understand (or, I think, agree) with this point. 'Real' economic growth depends upon increases in labour productivity and/or employment - i.e. the ability to produce more. Loans don't really come into it, except as a way of facilitating the investment in productive capacity (e.g. using a loan to buy a machine which improves the productivity of labour in a factory).
However this I do agree with. The effect is multiplicative (although how much is a subject of much debate). (Generally) Spending leads to more spending.
Ultimately, any borrowing that takes place now will have to be paid back. It will have to be paid back either now (through increased taxes) or in the future (through increased taxes or reduced state aid to the future population). It's fine and dandy to say that borrowing isn't a big deal and that we need spending to stimulate the economy (and that many indeed be a justifiable position) - but it's just kicking the problem down the road for someone else. That's the mistake that's been made for at least 75 years - this idea that, as long as borrowing doesn't accelerate too fast, it's okay to carry on. Ultimately someone will have to pay for the borrowing.
alas a huge problem with Capitalism. Companies worry too much about their profits and shareholders. None of that money gets given back.
Dirk Gently
New member
- Dec 27, 2011
- 273
The challenge the original post - the UK MAY NOT be back in recession. The prediction of negative growth was made a few days before the end of the economic quarter, and the margin was due to be ever small - something like 0.01%.
If the Government were able to find a way to trigger a sudden burst of economic activity for a few days then that might just skew the figures enough to keep the UK out of recession and save their faces, politically.
Something like making everyone in the country fill up their petrol tanks a couple of times would probably do it ........ but surely no government would be as devious and Machiavellian as that?
If the Government were able to find a way to trigger a sudden burst of economic activity for a few days then that might just skew the figures enough to keep the UK out of recession and save their faces, politically.
Something like making everyone in the country fill up their petrol tanks a couple of times would probably do it ........ but surely no government would be as devious and Machiavellian as that?
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 36,019
half a week of petrol sales against a whole quarter of economic activity is not going to shift GDP 0.2%. fact is the OECD has prediction probably underestmated their numbers and we'll be above 0 anyway. GDP figures are notoriously unreliable on the first announcment, with the only consistancy being they are revised upwards later (as more data becomes available)
Norman Potting
Well-known member
If all the economists in the world were laid end to end they still wouldn't reach a conclusion.