UK inflation rate falls to 4% in March

[sten_super]

The euro rate is 1.25% now and went up this month. We should be looking at 2% by the year end as a slow transition to a normal rate environment is essential. What we are in danger of is becoming another Japan and their interest rates of 1% or below for 15 years is a harbinger of what we have in store unless we can heat the economy up and that includes increasing interest rates.

The Euro rate rise has f'ed the peripheral European economies that are struggling under mountains of debt. Any rise here (and certainly the kind of persistent rises you are talking about) could do the same to heavily indebted small businesses across the country. The Japanese problem was compounded by deflation, which is not likely here; the mere fact that we're talking about raising rates demonstrates that we're not in a liquidity trap, so I'm not sure that the Japanese example is particularly useful.

 

[El Presidente]

Fuel on the other hand you can't avoid the rises.

True, but you can use different transport methods and be more efficient in the way you consume fuel.

 

[El Presidente]

Its a shit sandwhich and we've all got to take a bite.

There are times I am glad I am a vegetarian.

 

[Superphil]

So, if I understand this right, if inflation goes up, Milliband blames the Coalition Government, if it goes down, it's nothing to do with the government, it's all down to the Bank of England. Jolly good, I think I've got that, thanks.

 

[El Presidente]

So, if I understand this right, if inflation goes up, Osborne blames the Labour Government, if it goes down, it's nothing to do with the government, it's all down to the Bank of England. Jolly good, I think I've got that, thanks.

Yup, think you have, all politicians are weasels.

 

[Superphil]

Yup, think you have, all politicians are weasels.

I don't think you quite fiddled with my quote correctly

 

[simmo]

So, if I understand this right, if inflation goes up, Milliband blames the Coalition Government, if it goes down, it's nothing to do with the government, it's all down to the Bank of England. Jolly good, I think I've got that, thanks.

Yep and he can make absurd speeches at anti cuts rallys about Martin Luther King and other such b0ll0cks while the present government are in the extremely unenviable postion of having to deal with a defecit of £165BN (as at 1st May 2010) inherited from the previous government of which he was a member of.

 

[SeagullEd]

The Euro rate rise has f'ed the peripheral European economies that are struggling under mountains of debt. Any rise here (and certainly the kind of persistent rises you are talking about) could do the same to heavily indebted small businesses across the country. The Japanese problem was compounded by deflation, which is not likely here; the mere fact that we're talking about raising rates demonstrates that we're not in a liquidity trap, so I'm not sure that the Japanese example is particularly useful.

By the same token, the euro zone problem is not a useful example either: the peripheral countries are structurally very different from the other eurozone countries and 'locked in' to the euro at the wrong rate ... UK still floats against all other currencies.

Yes, dealing with the deficit is hard but there's so much rubbish that has gone with it - these myths that we should have a balanced budget etc.

Useful article about the national debt is anyone is interested: (I dont agree with the over embellished statements at the end) http://johannhari.com/2011/03/29/the-biggest-lie-in-british-politics .

 

[Pavilionaire]

£165BN is just part of it. Add another £12BN to bail out Portugal, Greece, Ireland etc.

 

[keaton]

Yep and he can make absurd speeches at anti cuts rallys about Martin Luther King and other such b0ll0cks while the present government are in the extremely unenviable postion of having to deal with a defecit of £165BN (as at 1st May 2010) inherited from the previous government of which he was a member of.

I'm pretty certain as a % of the GDP it had only just reached the level of debt the Tories left Labour in 1997, before it shot up further due to a little thing called a global recession

 

[Simster]

Yep and he can make absurd speeches at anti cuts rallys about Martin Luther King and other such b0ll0cks while the present government are in the extremely unenviable postion of having to deal with a defecit of £165BN (as at 1st May 2010) inherited from the previous government of which he was a member of.

These cuts are ridiculous and haven't even taken hold yet. And the debt has always been far bigger than it is now as a proportion if GDP. I wonder how deep they will have to bite before people like you stop blaming Labour and accept that they are unnecessarily savage?

 

[Titanic]

I'm pretty certain as a % of the GDP it had only just reached the level of debt the Tories left Labour in 1997, before it shot up further due to a little thing called a global recession

These cuts are ridiculous and haven't even taken hold yet. And the debt has always been far bigger than it is now as a proportion if GDP. I wonder how deep they will have to bite before people like you stop blaming Labour and accept that they are unnecessarily savage?

It's the DEFICIT that is the problem... that's the rate at which the debt is growing each year... not the overall current debt level.

Budget deficit figures (taken from the Grauniad):

 

[sten_super]

By the same token, the euro zone problem is not a useful example either: the peripheral countries are structurally very different from the other eurozone countries and 'locked in' to the euro at the wrong rate ... UK still floats against all other currencies.

Yes, dealing with the deficit is hard but there's so much rubbish that has gone with it - these myths that we should have a balanced budget etc.

Useful article about the national debt is anyone is interested: (I dont agree with the over embellished statements at the end) http://johannhari.com/2011/03/29/the-biggest-lie-in-british-politics .

The eurozone is a reasonable example because it is a larger example of exactly the same problem that also challenges policy makers in the UK; regional economies. An interest rate which is appropriate for London (and the banks and financial institutions) may not be appropriate for the manufacturing firms of the North East.

I agree with some parts of that article (for example that the cuts are for ideological rather than purely economic purposes). However he does rather slant some of the facts. He implies (although noticeable doesn't quite go as far as saying) that Ireland and Spain have encountered debt problems because of their austerity packages; in fact the issue with the PIIGS has rather been that they have been so close to the edge that they have had no choice but to introduce harsh austerity packages, and these have been an indicator of how deep trouble they are in, rather than the cause.

His Great Depression example is also horribly skewed. So US government spending worked for the first six years? The peak of spending as a proportion of GDP in the US was in 1933, not 1936, and it didn't reach this level (in percentage terms) again until 1942. GDP only started rising on an annual basis in 1934 (and only fell subsequently for one year, 1938).

 

[User removed 4]

These cuts are ridiculous and haven't even taken hold yet. And the debt has always been far bigger than it is now as a proportion if GDP. I wonder how deep they will have to bite before people like you stop blaming Labour and accept that they are unnecessarily savage?

Budget 2011: George Osborne hints at more reforms as OECD cuts UK growth but applauds austerity measures - Telegraph

 

[Westdene Seagull]

These cuts are ridiculous and haven't even taken hold yet. And the debt has always been far bigger than it is now as a proportion if GDP. I wonder how deep they will have to bite before people like you stop blaming Labour and accept that they are unnecessarily savage?

Well actually is hasn't.

2007 - just under 3%
2008 - just under 5%
2009 - over 11%
2010 - just over 10%

Who was in power during the doubling ? Could it have been Labour ?

 

[simmo]

These cuts are ridiculous and haven't even taken hold yet. And the debt has always been far bigger than it is now as a proportion if GDP. I wonder how deep they will have to bite before people like you stop blaming Labour and accept that they are unnecessarily savage?

Well his US counterpart doesn't think they are ridiculous and in actuality seems to think the government is doing the right thing and unlike you he doesn't have UK political bias (in fact as a Democrat I would have expected him to be more pro Labour than Conservative).

BBC News - Timothy Geithner backs George Osbornes spending cuts

 

[keaton]

Well his US counterpart doesn't think they are ridiculous and in actuality seems to think the government is doing the right thing and unlike you he doesn't have UK political bias (in fact as a Democrat I would have expected him to be more pro Labour than Conservative).

BBC News - Timothy Geithner backs George Osbornes spending cuts

Apart from he's an Independent, an ex-banker, tax dodger, expenses cheat and blamed by some for the harshness of the economic crisis

 

[simmo]

Apart from he's an Independent, an ex-banker, tax dodger, expenses cheat and blamed by some for the harshness of the economic crisis

You should be a politician yourself as you have started off with pretty much option A. If you can't rubbish what someone says just rubbish the person who says it.

Geitner is Osbourne's equivalent in the US, right? Does Geitner think Osbourne is on the right track with what he is doing? Yes or no? It is a simple question.

 

[paddy]

I'm pretty certain as a % of the GDP it had only just reached the level of debt the Tories left Labour in 1997, before it shot up further due to a little thing called a global recession

Disagree completely. There was no global recession - show me China or India having two consecutive quarters in decline. What we had was a stunning lack of regulation allowing the banks to make stupidly risky investments, coupled with the Labour solution to every problem - throw more money at it (preferably using PFI). And as others have said, the debt figure is largely irrelevant - it is the deficit that is key. It is completely unsustainable to be borrowing one in every four pounds the government spends from markets, which the last two years have shown, are incredibly fickle

 

[Simster]

Well actually is hasn't.

2007 - just under 3%
2008 - just under 5%
2009 - over 11%
2010 - just over 10%

Who was in power during the doubling ? Could it have been Labour ?

Well actually "is" HAS. Firstly, you're just cherry picking the past 5 years. How about looking at the past 200 years, since the industrial revolution? Or even the 12 years that Labour were in charge? Of course you wouldn't do that because of your ridiculously simplistic view on the Labour party. But the bottom line is that you're showing me that Labour's deficit was only problematic for just TWO years? Christ on a bike.