Economy shrinks by 1.6%

steadysaver

UK economy shrinks faster than expected at 1.6% in the last 3 months . It was expected to shrink by 1.5%. Looks like [STRIKE]Brown Darling Brown[/STRIKE] erm Darling, oh just who is the chancellor these days will have to revise the budget forecast again

linky http://news.bbc.co.uk/1/hi/business/7967597.stm

Cannon_Fodder

I like the comment further down that article...

"The figures showed that the savings ratio surged from a negative number in the first quarter to almost 5% by the end of the year, as people put aside money for hard times.

"On the face of it this rise is good news - it means that a large portion of the necessary rebalancing of the economy away from spending and towards saving has occurred already," said George Buckley, an economist at Deutsche Bank. "


So, well done Britain, lots of us have got our heads screwed on straight - doing the sensible thing to move away from spending towards saving, for the "necessary rebalancing of the economy" - while a couple of people in 1 street, namely Downing Street still think that piling debt upon debt is the answer...

steadysaver

I was just going to add that the article showed an increase in savings, its about time. Maybe people are finally taking their heads out of the sand.

It could all be over by Christmas :beer:

CLAPTON

I don't really see how people spending less will help at the moment however sensible it may nbe for the individual.
If saving to increase and people spend less this will lead to more job losses and hence greater unemployment... It won't all be over by Christmas

steadysaver

CLAPTON wrote: »

I don't really see how people spending less will help at the moment however sensible it may nbe for the individual.
If saving to increase and people spend less this will lead to more job losses and hence greater unemployment... It won't all be over by Christmas

My over by Christmas quote was said in jest ala the Great War that will be "over by christmas". I in no way endorse my view it will be over by then, far from it.

I take your point, on the other side could more savings not build up the banks balance sheets, such that they might start increasing lending to businesses and such like again.

Generali

1.6% vs 1.5% is just a rounding difference.

Either way, that's a bad outcome for the economy.

ad44downey

steadysaver wrote: »

UK economy shrinks faster than expected at 1.6% in the last 3 months . It was expected to shrink by 1.5%. Looks like [strike]Brown Darling Brown[/strike] erm Darling, oh just who is the chancellor these days will have to revise the budget forecast again

linky http://news.bbc.co.uk/1/hi/business/7967597.stm

It looks like the depression is going to be even worse than we first feared.

Sir_Humphrey

steadysaver wrote: »

I was just going to add that the article showed an increase in savings, its about time. Maybe people are finally taking their heads out of the sand.

It could all be over by Christmas :beer:

Perhaps people who claimed that cutting IRs would discourage saving would like to admit they were wrong now?

Dan:_4

ad44downey wrote: »

It looks like the depression is going to be even worse than we first feared.

What was your first fear?

Generali

Sir_Humphrey wrote: »

Perhaps people who claimed that cutting IRs would discourage saving would like to admit they were wrong now?

Not me.

You believe ( AIUI) in ceteris paribus. I think that's a crock of poo. That's why you'll never get economics - because you believe economists!

Sir_Humphrey

Generali wrote: »

Not me.

You believe ( AIUI) in ceteris paribus. I think that's a crock of poo. That's why you'll never get economics - because you believe economists!

I do expect savings to fall as incomes decline - but these figures are from before that time. By economists, I suppose you mean economists that you agree with like Ricardo (perhaps you should call him Ricardpoo?)