Europe heading into recession

[Tlandcruiser]

https://www.businessinsider.com/europe-austerity-i...

Manufacturing down accross Europe, what are your views on the article?

I've always thought the country has never appeared to get over the recession and Europe just seems like we are in a Zombie mode, just plodding along as people seem to have less disposable income and spend less, I dont know whether its a nationwide salary stagnation.

Would cutting taxes and reducing VAT not help? give people more disposable income and get the population spending money?

[Tlandcruiser]

Could another large scale recession lead to the fall of capitalism and another form of government emerge?

How long can we kick the can down the road? Surely something must give.

How are salaries in Europe? Ie have Germany & France seen the same level of wage stagnation as the U.K.?

[Tlandcruiser]

https://www.nytimes.com/2019/07/09/business/econom...

I still believe wage stagnation is a big contributor. Around 2010-11ish the veterinary clinic my wife worked at said there was no pay rises due to the economic situation, however the company then boasted about record level of profits in the company magazine that was issue around four months later.

[Tlandcruiser]

V1nce Fox said:

Same strategy here: get rid of ANY debt as the future's so unknowable at this stage. I only watch this stuff now to know how to deal with mortgage decisions.

Except my mortgage, Ive not had debt for about 10 years, other than the odd purchase on a credit card that gets cleared in a month or two....Im not a powerfully built company director driving a brand new car, my land cruiser is around 15 years old now.

[Tlandcruiser]

I often wonder if cutting taxs and VAT would have get people spending, boosting local business and due to the increase in spending this will counter the reduction in VAT/Tax

[Tlandcruiser]

Digga said:

Car sales are an imperfect barometer, insomuch as there is also huge uncertainty among most of the public about what they should actually buy next.

Heart and social conscience says electric, head says making a visit to Starbucks last 45 mins gets old pretty quick, if you can find one.

Then there is the new tech fear of buying the EV equivalent of Betamax.

I disagree, most people buy a car on PCP so after two years will exchange it for something else and realistically nothing drastic will happen in the short term.

Whilst unemployment figures are down which is most likely due to zero hour contracts fudging the figures and combined with wage stagnation, has put the brakes down on people spending.

[Tlandcruiser]

Nickgnome said:

I think we can all agree the figures are not good for any, especially with the USA now becoming shaky.

Im suprised the USA-China trade war is still going on, surely its not creating any benefits to the USA?

[Tlandcruiser]

menousername said:

Question for the finance bods if i may

Helicopter money, QE, low or negative interest rates, it all has to be paid for by someone at some point. Would it not have made more sense to raise interest rates?

I know there is a big exposure to interest rates right now but that could have been managed over 4 or 5 years?

I was reading how negative rates cannot stimulate growth as there is no margin in lending - think it was the Metro Bank thread.

My point is - is QE and helicopter money not the opposing side of the spectrum from low interest rates? They cannot work together? If the banks cannot lend at current rates, are paying to deposit excess cash, why flood them with more?

Raising interest rates would have been disastrous. I think the better option would have been to reduce VAT and reduce tax to encourage spending and stimulate the economy that way.