So we are in a recession then

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Discussion

Jasandjules

69,825 posts

228 months

Wednesday 25th April 2012
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It's a good job the last Govt didn't leave the cupboards bare so we still have enough left to ride this... Oh, wait.

steveatesh

4,893 posts

163 months

Wednesday 25th April 2012
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Jasandjules said:
It's a good job the last Govt didn't leave the cupboards bare so we still have enough left to ride this... Oh, wait.
This to me is a message the coalition should be pushing over and over, that the last lot over spent by a lage margin and now they are having to put the wheels back on without a jack or wheel brace.

Considering Cameron is a PR man they are hopeless at effective communication.

markcoznottz

7,155 posts

223 months

Wednesday 25th April 2012
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oyster said:
That's fine for you, but what part of the economy are you stimulating by your spending restraint?
If people had more of thier earnings left over after tax they might spend more. How did businesses manage pre boom I think consumers were less frivalous but shops seemed to stay oPen?.

dandarez

13,244 posts

282 months

Wednesday 25th April 2012
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oyster said:
egor110 said:
Inkyfingers said:
Clearly a lot of people with vested interests are going to make a lot of noise about this, but it's not really unexpected. Whether you grow by 0.2% or contract by 0.2% isn't going to make a huge difference.

Clearly a lot of people are still very nervous about spending money, which is understandable, but I think the overall trend is OK. I've seen the first signs of business confidence in the last few months, but we need consumers to start to spend, a falling rate of inflation would help, lets face it, if you have a decent job and you aren't saddled with debt then you are still probably OK, even if the press keep telling you you're not.

The government are between a rock and a hard place, but at least on the economy i think they are largely getting it right. Hopefully some short term pain will give us a long term gain. This is not the time to start thinking about any sort of stimulus, look at how spooked the markets are about the idea of a high taxing, free spending socialist coming to power in France. As a government it doesn't matter how popular they are mid term, it's how the economy is and popular they are in 2 years that's going to count.
You say we need consumers to spend, that's what got us in this mess though, consumers spending money they didn't have on things they didn't need.

There are very few things people need, compared to what they'd like.

My only debt is a 60k mortgage but there's no way i'd buy a new car or spend money on things i don't need as if a few months down the line i'm laid off i'd find that money useful.
That's fine for you, but what part of the economy are you stimulating by your spending restraint?
We all have spending restraint because of what's going on in this country. Fuel, a major lifeblood to the economy, just keeps rising, affecting everything pricewise. We don't know where it will end, so we cutback where we can. How long before we see the 7 quid a gallon - we are only 50p away. Yet in the USA a gallon costs $3.86 (£2.40!) - it's dropped a nickel in a week, the same price Americans were paying exactly a year ago.
http://www.cbsnews.com/8301-18563_162-57419502/gas...

Here? We just get duped and taxed ...and taxed ...and taxed.

egor110

16,817 posts

202 months

Wednesday 25th April 2012
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Add to that people in jobs have no idea how secure there jobs are, so the sensible are building up savings incase they get laid off and overpaying mortgages because the rates are so low.
Boring compared to buying a new car or a nice holiday but sensible.

Road Pest

3,123 posts

197 months

Wednesday 25th April 2012
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Add to that the people not having a great time and teetering on the edge of an IVA or bankrupcy... interest only mortgages... etc...

martin84

5,366 posts

152 months

Wednesday 25th April 2012
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Well this is news the Government could've really done without after whats been a horrific month for the Coalition. However these figures are hardly surprising and most sensible people will admit todays news has been on the cards for a while, we're hardly bowled over with shock are we?



In my view this news is not doom laden or particularly bad. In reality its a minor contraction and only the arbitrary method for determining recession makes it look worse than it is. As the graph shows we've been messing about with the odd 0.2% here and there up and down for quite some time now, so on that basis I dont think today brings doom.

The bigger picture is our economy has essentially been in recession for four years, the collapse of 2008 with five straight quarterly contractions was horrific obviously and the fact is we've not come close to making up the gap to even get back to 2007 levels. The arbitrary method I spoke of earlier has made things look better than it is in that regard. We've been able to say for the last couple of years 'yay the economies growing!' when in reality we're still miles off our original position in 2007, so effectively we've been in recession ever since because the subsequent growth has been so minor that the effects of the crash have never been addressed.

Edited by martin84 on Wednesday 25th April 23:54

fid

2,428 posts

239 months

Wednesday 25th April 2012
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You have to remember that previous levels of growth, prior to 2008, were unsustainable and fuelled by over-confidence. No growth, or periods of negative growth or limited growth, are necessary to get us to where we should be. Recess and rebuild, or stagnate and wait. Growth shouldn't come into it, yet.

deadslow

7,960 posts

222 months

Wednesday 25th April 2012
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steveatesh said:
Jasandjules said:
It's a good job the last Govt didn't leave the cupboards bare so we still have enough left to ride this... Oh, wait.
This to me is a message the coalition should be pushing over and over, that the last lot over spent by a lage margin and now they are having to put the wheels back on without a fking clue.
EFA

martin84

5,366 posts

152 months

Thursday 26th April 2012
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fid said:
No growth, or periods of negative growth or limited growth, are necessary to get us to where we should be.
Its easy for us folk with jobs to say that though.

fid said:
Recess and rebuild, or stagnate and wait. Growth shouldn't come into it, yet.
The Chancellor unveiled a growth plan so he obviously believes growth comes into it. He cannot now say this stagnant economy is the best we can hope for and everybody who lost their jobs in the crash were funded by unsustainable boom, that'll be the final nail in the coffin after this past terrible month for Downing Street.

mybrainhurts

90,809 posts

254 months

Thursday 26th April 2012
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james_tigerwoods said:
oyster said:
james_tigerwoods said:
Surely this was obvious for all to see - Clearly the fuel sale boom orchestrated by the Government didn't help smile
Serious question - what economic indicators made it obvious?
The news reports of job losses, companies having profit warnings, manufacturing now increasing, companies closing - from what I heard in the news made it clear that there was little positivity around.

However, there is a school of thought that says that the news we see is the news "they" want us to see smile
Not to mention the downturn in ambiwlans sales...

martin84

5,366 posts

152 months

Thursday 26th April 2012
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steveatesh said:
This to me is a message the coalition should be pushing over and over
Blaming Labour for everything became a tired tactic by June 2010, people dont want to hear that and they're bored of it. The Government recently have stopped peddling the 'inherited problems' line because they realise people are sick of hearing it.

Its all well and good blaming the past but at the same time they need to be able to say 'we are the better alternative, we have a better plan and this is how we're going to do it' and unfortunately they don't seem to have that currently.

The message the coalition needs to push over and over is how they're going to fix the problem, not how those evil Labour folk ruined everything for them.

mybrainhurts

90,809 posts

254 months

Thursday 26th April 2012
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It is wise to remind people that Labour ALWAYS screws up the economy...

Tax, borrow, borrow, spend, spend spend...

Oh, look, we're broke...how did that happen?

martin84

5,366 posts

152 months

Thursday 26th April 2012
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mybrainhurts said:
It is wise to remind people that Labour ALWAYS screws up the economy...
But people dont take kindly to posh stuck up Oxbridge boys telling them essentially 'we're st, but the other lot are even worse.'

Hardly gets people rushing to the polling station does it?

mybrainhurts

90,809 posts

254 months

Thursday 26th April 2012
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martin84 said:
mybrainhurts said:
It is wise to remind people that Labour ALWAYS screws up the economy...
But people dont take kindly to posh stuck up Oxbridge boys telling them being told essentially 'we're st, but the other lot are even worse.'

Hardly gets people rushing to the polling station does it?
I concur. My statement still stands.

hornet

6,333 posts

249 months

Thursday 26th April 2012
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egor110 said:
Add to that people in jobs have no idea how secure there jobs are, so the sensible are building up savings incase they get laid off and overpaying mortgages because the rates are so low.
Boring compared to buying a new car or a nice holiday but sensible.
Exactly the situation I'm in. I'm not about to rush out on a spending spree when I don't know if I'll be employed six months from now.

martin84

5,366 posts

152 months

Thursday 26th April 2012
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hornet said:
Exactly the situation I'm in. I'm not about to rush out on a spending spree when I don't know if I'll be employed six months from now.
I understand your outlook completely. The 'wait and see' method is being practiced by most households and businesses at the moment, theres plenty of money there but nobody dare risk losing it by investing in anything or spending any of it. Unfortunately that in itself holds back any growth. The big question is what would convince somebody like yourself that spending your money is a less risky move?

Dixie68

3,091 posts

186 months

Thursday 26th April 2012
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martin84 said:
I understand your outlook completely. The 'wait and see' method is being practiced by most households and businesses at the moment, theres plenty of money there but nobody dare risk losing it by investing in anything or spending any of it. Unfortunately that in itself holds back any growth. The big question is what would convince somebody like yourself that spending your money is a less risky move?
Yep, agree with that totally. I've always tried to save a little money as a safety net, but now it's almost a compulsion. I'm in a pretty secure job but who knows what's around the corner that may happen? I rent so I don't have the worry about mortgages but I guarantee the rent will go up this year, along with the public & private transport costs that I have to pay to just get to work, and pay raises won't even get close to covering those (even if we HAD raises).
Worrying times.

speedy_thrills

7,760 posts

242 months

Thursday 26th April 2012
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martin84 said:
But people dont take kindly to posh stuck up Oxbridge boys telling them essentially 'we're st, but the other lot are even worse.'
They've always found it difficult to shrug off that image.

If they let the next election be fought on the lines of capitalism v.s. socialism they are finished again for a couple more terms, that's what Labour wants and why they keep using at class divide as an attack. They couldn't have asked for a better gift than when the Conservatives pulled the top tax rate. Maybe it boosted the UK's economic performance slightly but the price paid in votes was too high. Learn from the last Labour government who did small but not very socialist things that won a lot of votes, what are a few small concessions like mansion taxes/top tax rates etc. to allow the Conservatives to pull another term or two in the big picture? The number of votes won or lost does not appear to be proportional to the size of the issue in politics.

Fighting on economic policy directly is akin to asking voters if they'd rather be set on fire or dropped into hot oil. There isn't any mileage because there aren't any easy options left for the UK, everyone will have to adopt a balanced book policy one way or another. Don't even let MPs even utter terms like "cost cutting" or "deficit reduction" and even asked about 'the 1% question' just say "We intend to tax them more", it's got to be directed at recapturing the middle class/working lower class voters with small concessions.

Bing o

15,184 posts

218 months

Thursday 26th April 2012
quotequote all
Dixie68 said:
martin84 said:
I understand your outlook completely. The 'wait and see' method is being practiced by most households and businesses at the moment, theres plenty of money there but nobody dare risk losing it by investing in anything or spending any of it. Unfortunately that in itself holds back any growth. The big question is what would convince somebody like yourself that spending your money is a less risky move?
Yep, agree with that totally. I've always tried to save a little money as a safety net, but now it's almost a compulsion. I'm in a pretty secure job but who knows what's around the corner that may happen? I rent so I don't have the worry about mortgages but I guarantee the rent will go up this year, along with the public & private transport costs that I have to pay to just get to work, and pay raises won't even get close to covering those (even if we HAD raises).
Worrying times.
Shouldn't it be a compulsion regardless of economic cycle?