UK still in recession

[g4ry13]

Bit of old news as it happened almost an hour ago now. It would appear from data released that the UK's still in recession despite our ridiculous over-spending. Osborne blames it on the euro-zone this time. Around a year ago he was blaming it on the weather. It doesn't look like things are going to get any better when cuts in the economy are being made. Article here, the future's looking bleak for the UK economy.

[Corsair7]

g4ry13 said:

Bit of old news as it happened almost an hour ago now. It would appear from data released that the UK's still in recession despite our ridiculous over-spending. Osborne blames it on the euro-zone this time. Around a year ago he was blaming it on the weather. It doesn't look like things are going to get any better when cuts in the economy are being made. Article here, the future's looking bleak for the UK economy.

Not yet a recession though, is it? It's only a recession if 2 consecutive quarters isnt it?

Feels like a depression though.

[turbobloke]

Corsair7 said:

Not yet a recession though, is it? It's only a recession if 2 consecutive quarters isnt it?

Feels like a depression though.

Agreed on both points but Merv says it's all OK really.

http://www.telegraph.co.uk/finance/financialcrisis...

[g4ry13]

I wasn't aware we ever came out of it. A few positive quarters never meant everything was rosy.

The country's just dying and all the politicians are preaching is "austerity"

Edited by g4ry13 on Wednesday 25th January 10:26

[Elroy Blue]

Im not surprised the country is knackered. Increase benefits by 5% but hammer those that actually work. Cameron has been an abject failure. I don't know why I'm surprised.

[Caulkhead]

g4ry13 said:

It would appear from data released that the UK's still in recession

articale said:

if UK output falls in the first three months of 2012, Britain will enter its second recession in three years.

[Marf]

Recession is two consecutive quarters of negative growth. The ONS figures show a projected 0.2% contraction with a 0.2% margin of error.

I'll wait for the real figures before topping myself.

Edited by Marf on Wednesday 25th January 11:05

[Elroy Blue]

I don't need to wait for figures. The Government is attacking my pay and taxing me to death and my wife lost her job. It would seem that most people who aren't on benefits or a Politician are suffering the same way.

[fido]

Marf said:

Recession is two consecutive quarters of negative growth. The ONS figures show a projected 0.2% contraction with a 0.2% margin of error.

I'll wait for the real figures before topping myself.

Minus or Plus 0.2% - it doesn't really matter a jot. Inflation is running at 5-6%. In real terms we are going backwards anyway. All the BoE can do is avoid a debt-deflation scenario (QE a.k.a. inflation away the debt) and we all get a little poorer each year in real terms. It's pointless to moan about the politicians - some austerity & some tax cuts - what else can the government do?

[thinfourth2]

Elroy Blue said:

Im not surprised the country is knackered. Increase benefits by 5% but hammer those that actually work.

Cameron has been an abject failure.

Got a nice range of ties however

[Marf]

fido said:

Minus or Plus 0.2% - it doesn't really matter a jot. Inflation is running at 5-6%. In real terms we are going backwards anyway.

Using whose figures?

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-i...

The key points from this release are:

• CPI annual inflation stands at 4.2 per cent in December 2011, down from 4.8 per cent in November. The last time there was a larger fall in annual inflation was between November and December 2008. The largest downward pressures to the change in CPI annual inflation between November and December 2011 came from petrol, gas and clothing. The CPI stands at 121.7 in December 2011 based on 2005 = 100

• RPI annual inflation stands at 4.8 per cent in December 2011, down from 5.2 per cent in November. This is the largest fall in annual inflation since between May and June 2009. The largest downward pressures to the change in RPI annual inflation between November and December 2011 came from petrol, oil & other fuels, gas and clothing & footwear. Partially offsetting these were upward pressures from car insurance and telephone charges. The RPI stands at 239.4 in December 2011 based on January 1987 = 100

[g4ry13]

fido said:

It's pointless to moan about the politicians - some austerity & some tax cuts - what else can the government do?

They can make the UK a more friendly place to do business. Lower VAT, lower fuel prices, seek to reduce house prices. Then they can stimulate the dying economy and invest into industries where the UK really lags (manufacturing being one of them) rather than cutting money and making everyone poorer. It's basic multiplier effect/circulation of money stuff, less money in the economy and everyone ends up worse off. I'd like to see examples of recessions/depressions that were resolved by cutting spending.

[thinfourth2]

g4ry13 said:

invest into industries where the UK really lags (manufacturing being one of them)

WRONG

Stop reading the doom mongering st that comes out of the main stream media

[Esseesse]

Corsair7 said:

g4ry13 said:

Bit of old news as it happened almost an hour ago now. It would appear from data released that the UK's still in recession despite our ridiculous over-spending. Osborne blames it on the euro-zone this time. Around a year ago he was blaming it on the weather. It doesn't look like things are going to get any better when cuts in the economy are being made. Article here, the future's looking bleak for the UK economy.

Not yet a recession though, is it? It's only a recession if 2 consecutive quarters isnt it?

Feels like a depression though.

Only feels like a depression because of the media though and because they've been seemingly talking of doom for a long time now IMO.

If I didn't watch the news I'd doubt I'd notice. The only thing I might have noticed is the turnover of property near me grinding to a halt (but that's only because I'm looking).

[Digga]

Marf said:

fido said:

Minus or Plus 0.2% - it doesn't really matter a jot. Inflation is running at 5-6%. In real terms we are going backwards anyway.

Using whose figures?

http://www.ons.gov.uk/ons/rel/cpi/consumer-price-i...

The key points from this release are:

• CPI annual inflation stands at 4.2 per cent in December 2011, down from 4.8 per cent in November. The last time there was a larger fall in annual inflation was between November and December 2008. The largest downward pressures to the change in CPI annual inflation between November and December 2011 came from petrol, gas and clothing. The CPI stands at 121.7 in December 2011 based on 2005 = 100

• RPI annual inflation stands at 4.8 per cent in December 2011, down from 5.2 per cent in November. This is the largest fall in annual inflation since between May and June 2009. The largest downward pressures to the change in RPI annual inflation between November and December 2011 came from petrol, oil & other fuels, gas and clothing & footwear. Partially offsetting these were upward pressures from car insurance and telephone charges. The RPI stands at 239.4 in December 2011 based on January 1987 = 100

<cough> Bullst! </cough>

Forget the figures fudge, the reality for most people is worse.

As for recession, I'd be fairly surprised if, before both and after revision (a.k.a. further fudging) we don;t see two quarters of negative numbers, q4 '11 and q1 '12.

Agreed regarding red tape - for all the fanfare from both the Tories and the Lib Dems, the progress made at grass roots level would be laughable if it weren't so worrying for our long term security. Hey ho!

[Esseesse]

g4ry13 said:

Then they can stimulate the dying economy and invest into industries where the UK really lags (manufacturing being one of them) rather than cutting money and making everyone poorer.

The ONLY way the government should be investing into 99.9% of industries is by making it cheaper to do business. They should not be spending money. They should be cutting money and then in turn cutting the taking of money.

[g4ry13]

thinfourth2 said:

WRONG

Stop reading the doom mongering st that comes out of the main stream media

Go on....what do you think needs stimulating/doing? Or shall we just keep relying on the banking/financial services sector to prop up the country?

[fido]

g4ry13 said:

They can make the UK a more friendly place to do business. Lower VAT, lower fuel prices, seek to reduce house prices.

I think we would all like lower taxes - but then you need to either borrow more or make cuts to public spending. As for investing in dying industries - the UK doesn't have a great track record in this area - I'd rather see the new industries supported with tax cuts. E.g. There are quite a few contractors (Finance/IT) on this Forum who have moved abroad. We might want to look into the reasons why they have decided to take their tax revenues out of the economy.

g4ry13 said:

I'd like to see examples of recessions/depressions that were resolved by cutting spending.

We're not even cutting spending - just trying to keep spending flat and eliminate the structural deficit. I'd like to see an example where it didn't end up like the PIGS or worse a Great War. Ok, you can spend your way out of a recession when you have some savings to fall back on, but someone left the cupboard empty. I don't think the Ratings Agency will take kindly to issuing more Gilts to plug the spending gap e.g. France.

Edited by fido on Wednesday 25th January 11:30

[Fittster]

g4ry13 said:

fido said:

It's pointless to moan about the politicians - some austerity & some tax cuts - what else can the government do?

They can make the UK a more friendly place to do business. Lower VAT, lower fuel prices, seek to reduce house prices. Then they can stimulate the dying economy and invest into industries where the UK really lags (manufacturing being one of them) rather than cutting money and making everyone poorer. It's basic multiplier effect/circulation of money stuff, less money in the economy and everyone ends up worse off. I'd like to see examples of recessions/depressions that were resolved by cutting spending.

"1. Some of the growth since the 1980s came from a rise in households’ debt-income ratios as these adjusted upwards following the relaxation of credit constraints. Although I’m not as convinced as some that consumers are over-indebted, this process is now over.

2. History shows that recoveries from recessions and financial crises are often weak.

3. Gravity works against the UK. We export more to Spain and Italy than we do to all four BRICs.

4. In one important respect, the economy was running out of oomph even before the crisis. In the five years to the peak in 2007Q4, real business investment grew by 4.4% a year. In the previous 20 years - which encompassed a sharp recession, remember - it averaged 5.3% a year.

5. The factors behind this slowdown haven’t disappeared. These include: a realization (thanks to Nordhaus’s research) that investment in innovations is rarely profitable; the migration of low-wage projects to emerging markets; and a slowdown in the rate of monetizable innovations.

The thing is, I’m not sure that there’s much that policy can do about all this. It’s not good enough to “set the private sector free” because it doesn’t want to invest anyway. And it’s not enough to fix the banking system or set up a state bank, because the problem is a lack of demand for credit, not just supply. And “confidence” is a red herring; the problem is that there is a genuine dearth of
investment opportunities, not that firms are unwilling to see them.

If I’m right, or even nearly so, there are implications here for both politics and the markets.

For politics, it suggests the task is not (just) to promote growth - which might not be greatly possible - but to adapt to an era of slower growth.

For the markets, this suggests a fundamental reason for permanently(ish) lower equity valuations: that future growth will be lower. "

http://stumblingandmumbling.typepad.com/stumbling_...

[thinfourth2]

g4ry13 said:

Go on....what do you think needs stimulating/doing? Or shall we just keep relying on the banking/financial services sector to prop up the country?

The UK is not lagging behind in manufactuering

We are amoungst the best in the world

We need to invest in bio tech and lots of other cutting edge stuff