Discussion
Will it? Is it? When? How bad?
Any answers?
Reading between the lines on here and listening to the news, it seems likely or is already happening behind closed doors, what are the pros thoughts on the subject here.
i’m by no means the latter but would be interested in peoples opinions from here..
Any answers?
Reading between the lines on here and listening to the news, it seems likely or is already happening behind closed doors, what are the pros thoughts on the subject here.
i’m by no means the latter but would be interested in peoples opinions from here..
I'm certainly seeing reduced expenditure, both in business and every day life. Places less busy, the supermarket stocking algorithms behind what reality is showing so lots of out of date stock, roads quieter at non essential travel times, houses staying up for sale longer in certain areas.
There will be others better qualified to comment but it will take huge changes to not see a recession in my opinion.
There will be others better qualified to comment but it will take huge changes to not see a recession in my opinion.
We're in strange times. Inflation is the highest it's been for 30 years, but unemployment is very low. Personal and public debt are very high, but interest rates (even with the latest rises) are still ultra low by historic standards, so borrowing is still very cheap.
The rises in cost of living wouldn't be so much of a problem if people had more flexibility in their finances and saved more. The problem is often the same- we over-extend in the good times, and over-contract in the bad times. Economies are built on debt, consumerism and spending though, and policy makers tend to want more growth, more of the time. Very difficult to see how it will ever change. All you can do is make sure you and your family are always in a decent position, or working towards one.
The rises in cost of living wouldn't be so much of a problem if people had more flexibility in their finances and saved more. The problem is often the same- we over-extend in the good times, and over-contract in the bad times. Economies are built on debt, consumerism and spending though, and policy makers tend to want more growth, more of the time. Very difficult to see how it will ever change. All you can do is make sure you and your family are always in a decent position, or working towards one.
With rising energy costs, fuel costs, food costs, rapidly rising mortgage rates, people will have less for discretionary spend each month.
A few less takeaways, a few less cinema trips, a few less days out, a few less 'treats' in the weekly shop, all add to lowering GDP. A drip, drip effect.
It's difficult to see how a recession can be avoided.
If house prices were lower, people's mortgages wouldn't be so large, enabling us to spend more in the economy.
A few less takeaways, a few less cinema trips, a few less days out, a few less 'treats' in the weekly shop, all add to lowering GDP. A drip, drip effect.
It's difficult to see how a recession can be avoided.
If house prices were lower, people's mortgages wouldn't be so large, enabling us to spend more in the economy.
mattyprice4004 said:
The consensus among a lot of people seems to be that we’re in one already but ignoring the signs / facts.
If nothing else, the cost of living crisis will be a huge push towards it if we’re not already there.
Surely a recession is measured. 2 quarters of negative growth and you are in a recession.If nothing else, the cost of living crisis will be a huge push towards it if we’re not already there.
So, gentlemen, let us conclude that we are either in, or are going to be in, a recession.
The economic ripples from Ukraine aren't limited to us, so I'm not sure if it's just a UK issue or more global. Nor indeed how much of it is Ukraine - though fuel has to be a major player because it affects everything else.
What do we invest in to make a buck rather than lose it? Or is it all too late now, so we do nothing and wait for the storm to blow over?
It is all very well seeing the iceberg, but which way do you steer?
The economic ripples from Ukraine aren't limited to us, so I'm not sure if it's just a UK issue or more global. Nor indeed how much of it is Ukraine - though fuel has to be a major player because it affects everything else.
What do we invest in to make a buck rather than lose it? Or is it all too late now, so we do nothing and wait for the storm to blow over?
It is all very well seeing the iceberg, but which way do you steer?
Simpo Two said:
So, gentlemen, let us conclude that we are either in, or are going to be in, a recession.
The economic ripples from Ukraine aren't limited to us, so I'm not sure if it's just a UK issue or more global. Nor indeed how much of it is Ukraine - though fuel has to be a major player because it affects everything else.
What do we invest in to make a buck rather than lose it? Or is it all too late now, so we do nothing and wait for the storm to blow over?
It is all very well seeing the iceberg, but which way do you steer?
Precious metals I guess but we're always told that boat has sailed.The economic ripples from Ukraine aren't limited to us, so I'm not sure if it's just a UK issue or more global. Nor indeed how much of it is Ukraine - though fuel has to be a major player because it affects everything else.
What do we invest in to make a buck rather than lose it? Or is it all too late now, so we do nothing and wait for the storm to blow over?
It is all very well seeing the iceberg, but which way do you steer?
lizardbrain said:
Do equities always correlate strongly with GDP with stagflation recessions?
No. There is absolutely no positive correlation between equity markets and economic performance. Actually there is a negative correlation between the two but r^2 is very small so of no real significance.lrdisco said:
I do think the BBC really blow the whole cost of living thing up and will be a big part of causing the oncoming recession.
I agree. Can you imagine a country where the media supported the government/country in general and reported positively on things? How enlightening that would be! But instead they find an unemployed single mum, or someone whose business has just closed down... so much of the 'news' is simply interviews of people complaining about things. It's easy airtime.I scrupulously avoid late-night discussion shows with B-list politicians, selected audiences and a comedian thrown in for some cheap laughs. But I was staggered to see one recently with Sebastian Vettel; did he wander into the wrong studio?
Edited by Simpo Two on Monday 16th May 09:31
lrdisco said:
From my understanding, recessions are only ever really caused by lack of confidence.
People have no confidence so they cut back on spending.
I do think the BBC really blow the whole cost of living thing up and will be a big part of causing the oncoming recession.
Yep, we saw that in 2008 and national media was as guilty of making that as bad as it was as they have recently been with the panicdemic.People have no confidence so they cut back on spending.
I do think the BBC really blow the whole cost of living thing up and will be a big part of causing the oncoming recession.
Lack of confidence usually comes because of some event and this time around, it will be because people will be genuinely poorer.
A lot of the UK do live close to their financial limits so take just a few hundred £ out of their pocket for fuel and food and they are in the s
t.A recession can be caused by a "lack of confidence", for example when the average punter either realised they'd borrowed more than they could afford or feared their neighbours had. The lack of confidence is rational; the preceding exuberance was the irrational phase, and unfortunately the recession is part of the correction.
An external price shock, e.g. imported energy or good prices going through the roof, directly reduces spending on other goods and therefore reduces economic activity. That can then lead to a reduction in confidence and further economic damage, but the confidence effect is secondary and, as in the previous example, is also completely rational.
And had also been said, a recession is a technical matter. Loads of sectors are already "in recession", if you want to call it that, because of hiked input costs, labour market shortages, increased friction at our borders, the rising cost of borrowing. Other sectors will be doing well. The point at which we on average tip into recession isn't of particular economic significance and is only known about a considerable time after it has happened. It's much more of a political event then anything else as it is an excuse to do some finger pointing.
An external price shock, e.g. imported energy or good prices going through the roof, directly reduces spending on other goods and therefore reduces economic activity. That can then lead to a reduction in confidence and further economic damage, but the confidence effect is secondary and, as in the previous example, is also completely rational.
And had also been said, a recession is a technical matter. Loads of sectors are already "in recession", if you want to call it that, because of hiked input costs, labour market shortages, increased friction at our borders, the rising cost of borrowing. Other sectors will be doing well. The point at which we on average tip into recession isn't of particular economic significance and is only known about a considerable time after it has happened. It's much more of a political event then anything else as it is an excuse to do some finger pointing.
Simpo Two said:
I agree. Can you imagine a country where the media supported the government/country in general and reported positively on things? How enlightening that would be! But instead they find an unemployed single mum, or someone whose business has just closed down... so much of the 'news' is simply interviews of people complaining about things. It's easy airtime.
If this was the case, every country with an authoritarian government and state controlled media would have no recessions and continual GDP growth. A lot of people have demonstrably less money in their pocket at the moment because of rising food, fuel and utilities bills. Of course discretionary spending is going to fall and this is going to lead to a contraction of the economy.
Gassing Station | Finance | Top of Page | What's New | My Stuff