The Last 5 Major Uk Recessions

kennyboy66_2

ad44downey wrote: »

Yes, I do. With slashed interest rates, we're going to be like a banana republic in a few years' time with rampant inflation.

P.S. Your statistics are meaningless as they take no account of the inflation rate during each given period.

Hardly meaningless.


Here are the RPI inflation rates since WWII

http://www.statistics.gov.uk/downloads/theme_economy/RP04.pdf

Another lesson we could learn from history - during a recession inflation normally gets squeezed out of the economy.

WTF?_2

:rotfl:

Realy wrote: »

Almost.

Let me state my position one more time, at the risk of being accused of saying the same thing over and over again.

We are in a situation where lower interest rates are desirable to help economic activity.

However, because of mistakes already made ie. keeping rates too low in the past it's simply not possible to cut them in the way that the rate cutters are calling for.

Pressing ahead with measures to try to bring rates down no matter what the market is telling us will lead to all sorts of greater problems in the future.

Coming out with blithe statements like "don't worry, the recession will take care of inflation and money supply concerns for us" is just as much as mistake as the the policy of keeping rates low during the bubble. More so, as we no longer have any wriggle room given that the recession is on us.

We're looking at making a bad situation worse here by blithely trying to 'bring back 2007' as is the stated aim of Gordon Brown and his government.

Realy

!!!!!!? wrote: »

:rotfl:

Let me state my position one more time, at the risk of being accused of saying the same thing over and over again.

We are in a situation where lower interest rates are desirable to help economic activity.

However, because of mistakes already made ie. keeping rates too low in the past it's simply not possible to cut them in the way that the rate cutters are calling for.


We're looking at making a bad situation worse here by blithely trying to 'bring back 2007' as is the stated aim of Gordon Brown and his government.

Look if rate are 5% and they lower them to 4% that is a 20% cut.
Rates are low based on the amount of debt the more you lend the cheaper in theory it becomes. (did you not do economies of scale;) ) not saying this is good.

A cheaper debt to service is a cheaper debt to service!

Stop going on about 07, that is amounts of lending not the type or the rate it was lent at.:rolleyes:

WTF?_2

kennyboy66 wrote: »

Hardly meaningless.


Here are the RPI inflation rates since WWII

http://www.statistics.gov.uk/downloads/theme_economy/RP04.pdf

Another lesson we could learn from history - during a recession inflation normally gets squeezed out of the economy.

No in the 70s. We got stagflation.

Except that in the 70s we could handle stagflation as Britain was a major exporter and the devaluation of the pound helped export industry who could then afford to pay workers more to compensate for the higher prices of stuff. In fact, it was great news for mortgage holders as debt was rapidly eroded by higher incomes and there were still plenty of jobs around.

Now, the UK is a major importer and 00's style stagflation is just going to see the spending power and standards of living of the population erode, very quickly. Higher prices on loads of things but not higher salaries and a hell of a lot more unemployment than the 70s. e.g. Retail is (was) massive and it will be hard hit.

If you've been following the media closely there have been loads of little warnings that prominent people have been dropping over the last year about the public having to expect to see a fall in our living standards.

StevieJ

!!!!!!? wrote: »

No - it's restating what I've been saying which you'd know if you actually read what I was posting in the past.

Is it finally getting through to you?

You said that if we reduce interest rates inflation will increase, I said no it wont because commodity prices are falling faster.

At least you have an appropriate name.

WTF?_2

Realy wrote: »

Look if rate are 5% and they lower them to 4% that is a 20% cut.
Rates are low based on the amount of debt the more you lend the cheaper in theory it becomes. (did you not do economies of scale;) ) not saying this is good.

A cheaper debt to service is a cheaper debt to service!

Stop going on about 07, that is amounts of lending not the type or the rate it was lent at.:rolleyes:

If people are so overburdened with borrowing that they can't service their debts at remarkably low base rates of 4.5% then I very much doubt that base rates of, say, 2.5% are going to magically put their affairs in order.

They will start to notice as the cost of all those imported things rise though.

WTF?_2

StevieJ wrote: »

You said that if we reduce interest rates inflation will increase, I said no it wont because commodity prices are falling faster.

At least you have an appropriate name.

I said we'd get stagflation. Thought there's an ultimate risk of hyperinflation is controls are totally relaxed.

You seem to be of the opinion that inflationary pressures will magically just disappear off the radar with the onset of recession.

Realy

!!!!!!? wrote: »

If you've been following the media closely there have been loads of little warnings that prominent people have been dropping over the last year about the public having to expect to see a fall in our living standards.

Sorry I was not aware in the past standards of living increased during a recession?
I would of thought everyone expects standards to fall during a recession?

Realy

!!!!!!? wrote: »

I said we'd get stagflation. Thought there's an ultimate risk of hyperinflation is controls are totally relaxed.

You seem to be of the opinion that inflationary pressures will magically just disappear off the radar with the onset of recession.

in the short term it will during a global recession?

Where will the inflation come from?

WTF?_2

Realy wrote: »

A RATE CUT IS NOT TO MAKE BORROWING EASIER OR TO INCREASE BORROWING BUT TO MAKE THE BURDEN LESS ON THOSE WHO BORROWED (MAKING DEFAULT LESS LIKELY);)
One day the message may get through.

These rate cuts will help mostly the banks who will be able to increase their margin.

The REAL cost of borrowing as dictated by the free market is not going to come down anything like as much as base rates.

You are aware that Central Banks lost control of the real cost of borrowing quite some time back now as they kept base rates stupidly low, causing actual borrowing costs to diverge significantly and the gap hasn't closed by that much, right ?????