Has the UK economy been handled better than the rest of Europe?

Masomnia

I've been thinking about the Euro thing a lot recently. I also think they deserve credit for keeping us out of it, after all we'd been in a much worse situation if our base rate was 2.5%, all because we were being dictated to by a central bank with its head in the sand.

Fair enough the BoE isn't always right, but at least it has acted quickly and hasn't taken any chances.

Degenerate

The other thing that's going to make a big difference is that we faced up to our banking problems early, took the pain and set ourselves up to recover, while others buried their heads in the sand.

chopperharris

These things are testified as right or wrong in history books.However brown has worked wonders , and I hate to admit it more than the next guy.I cant stand him , but he will go down as the saviest chancellor and then pm that has ever lived.

He sold off gold early , brought down the deficit , some say selling off gold at the price he did was wrong but it reduced debt and left room for more which as history has now shown we eventually needed....but was that luck?

He bailed out the banks and prevented a meltdown , history will show that it was the right thing to do and exactly the way it was done witrh regard to each bank done differently.The taxpayer will get the money back and then some.Hmg repayment will bounce back the economy even faster than the options that the rest of the eu used.IT will be an accelerated recovery , the imf have only just crunched the numbers correctly.The pound will start to rise and hit 1.20 euros as a test point for 1.50 as the rest of the eu partners sink if he has been right.

He freed up the boe to run that part of the economy , ie base rates etc.Looks like that was the right thing to do with hindsight.

Altough we got sick of hearing about it that the credit crunch happened and he never caused it , no matter what the tories say on that point it wasnt his fault or even preventable by any other countries leader from impacting on their economy.

On joining the eu looks like he was right , we would be more hammered than we are currently and for longer for what ...a quick buck on exchange rate and increased contributions and even more interference.

He could not prevent all these mp's in the trough in labour never mind the other parties.He wasnt one of the mps wanting these expenses from ever seeing the light of day.

Entertainer

chopperharris wrote: »

These things are testified as right or wrong in history books.However brown has worked wonders , and I hate to admit it more than the next guy.I cant stand him , but he will go down as the saviest chancellor and then pm that has ever lived.

He sold off gold early , brought down the deficit , some say selling off gold at the price he did was wrong but it reduced debt and left room for more which as history has now shown we eventually needed....but was that luck?

He bailed out the banks and prevented a meltdown , history will show that it was the right thing to do and exactly the way it was done witrh regard to each bank done differently.The taxpayer will get the money back and then some.Hmg repayment will bounce back the economy even faster than the options that the rest of the eu used.IT will be an accelerated recovery , the imf have only just crunched the numbers correctly.The pound will start to rise and hit 1.20 euros as a test point for 1.50 as the rest of the eu partners sink if he has been right.

He freed up the boe to run that part of the economy , ie base rates etc.Looks like that was the right thing to do with hindsight.

Altough we got sick of hearing about it that the credit crunch happened and he never caused it , no matter what the tories say on that point it wasnt his fault or even preventable by any other countries leader from impacting on their economy.

On joining the eu looks like he was right , we would be more hammered than we are currently and for longer for what ...a quick buck on exchange rate and increased contributions and even more interference.

He could not prevent all these mp's in the trough in labour never mind the other parties.He wasnt one of the mps wanting these expenses from ever seeing the light of day.

Are you serious?

There were plenty of things that Brown could have done but didn't, that are making this recession in this country far worse than it should have been.

Allowing the U.K banks to become monsters that dwarf the U.K economy, with their reckless lending (three of the world's five biggest banks are in this country) resulting in a bailout which will cost tens, possibly hundreds of billions.

Allowing a housing bubble to form, without one word of dissention or control of the banks and the aforementioned lending. He refuses to admit anything was wrong even now, as confirmed by the interview he gave with the Observer in January, which I posted on here, in which he blamed it all on America and said he wouldn't change a thing.

Regardless of what happened in the U.S, our housing market was going to crash at some point, built as it was on artificially low interest rates and the presumtion that inflation and interets rate swould remain low forever, which was a huge error and demonstrated his hubris in believing he had abolished boom and bust.

There were also plenty of warning bells in the derivatives market for anyone with the sense to listen, many years before all this happened ( I remember where I was when Long Term Capital Management was bailed out in 1998- I doubt that applies to the Cabinet). You would think the odd "irrational exuberance" speech to cover yourself might have been in order but no, nothing. All we got was Tony Blair threatening the FSA.

BOfE independence made no difference whatsoever, if it had been the previous arrangement of the Chancellor and Governor setting rates then they would have been slashed in the same way. The big drawback in the current remit for the B Of E is that their primary focus is on controlling inflation so they were very slow to cuts rates last year, against the protestations of David Blanchflower. They should have a brief that covers all aspects of macroeconomic policy.

The low inflation which allowed the 15 year growth period was also nothing to do with Brown- it was caused by the mass production of goods from China.

Then we have the issue of debt and the potential structural overspend that was happening in the "boom" years, which is now being reflected in the horrific borrowing figures.

It's ironic that export led economies like Japan and Germany are seeing some of the biggest falls in GDP when they were less culpable for the recession happening. The fact that the innocents are suffering more doesn't give a free pass for the guilty.

Now we are in this mess, the response has been somewhat more decisive than other countries (although it's a shame they waited fourteen months between August 07 and October 08 when Lehman's crashed, to do anything), although this owes more to Alastair Darling who was the driving force behind the bailout.

I'm amazed that someone of the undoubted intelligence of Gordon Brown could have been so neglectful of macroecomic policy. This underlines the fundamental point about New Labour- they were always obsessed with fiscal policy- tax and spend and redistibution of income- monetary policy and macroecomic stability was taken for granted and ignored.

Whilst Brown may be getting into his stride now in addressing these issues, the fact that he made these errors is something that history will judge him for.

Homer_Simpson_3

Britain is definately not the worse off. Spain seems to have been hit harder while France and Germany for example are better off, imo. So i would say they did an ok job.

StevieJ

Entertainer wrote: »

Ironic no illogical yes, not strange that export led economies like Japan and Germany are seeing some of the biggest falls in GDP when they were less culpable for the recession happening. The fact that the innocents are suffering more doesn't give a free pass for the guilty.
.

What is ironic about it? who made those cars and consumer items that were bought with the easy credit that you lot go on about? Well those sales won't be coming back in the medium term. I would like to address your other points but I am going out for a bit consumerism in our service economy, in other words :beer:

StevieJ

Homer_Simpson wrote: »

Britain is definately not the worse off. Spain seems to have been hit harder while France and Germany for example are better off, imo. So i would say they did an ok job.

Are you Joe King :eek: the French maybe.

Homer_Simpson_3

StevieJ wrote: »

Are you Joe King :eek: the French maybe.

Germany maybe as well. We are all guessing at the moment so nobody knows for sure yet.

CLAPTON

Entertainer wrote: »

Are you serious?

There were plenty of things that Brown could have done but didn't, that are making this recession in this country far worse than it should have been.

Allowing the U.K banks to become monsters that dwarf the U.K economy, with their reckless lending (three of the world's five biggest banks are in this country) resulting in a bailout which will cost tens, possibly hundreds of billions.

Allowing a housing bubble to form, without one word of dissention or control of the banks and the aforementioned lending. He refuses to admit anything was wrong even now, as confirmed by the interview he gave with the Observer in January, which I posted on here, in which he blamed it all on America and said he wouldn't change a thing.

Regardless of what happened in the U.S, our housing market was going to crash at some point, built as it was on artificially low interest rates and the presumtion that inflation and interets rate swould remain low forever, which was a huge error and demonstrated his hubris in believing he had abolished boom and bust.

There were also plenty of warning bells in the derivatives market for anyone with the sense to listen, many years before all this happened ( I remember where I was when Long Term Capital Management was bailed out in 1998- I doubt that applies to the Cabinet). You would think the odd "irrational exuberance" speech to cover yourself might have been in order but no, nothing. All we got was Tony Blair threatening the FSA.

BOfE independence made no difference whatsoever, if it had been the previous arrangement of the Chancellor and Governor setting rates then they would have been slashed in the same way. The big drawback in the current remit for the B Of E is that their primary focus is on controlling inflation so they were very slow to cuts rates last year, against the protestations of David Blanchflower. They should have a brief that covers all aspects of macroeconomic policy.

The low inflation which allowed the 15 year growth period was also nothing to do with Brown- it was caused by the mass production of goods from China.

Then we have the issue of debt and the potential structural overspend that was happening in the "boom" years, which is now being reflected in the horrific borrowing figures.

It's ironic that export led economies like Japan and Germany are seeing some of the biggest falls in GDP when they were less culpable for the recession happening. The fact that the innocents are suffering more doesn't give a free pass for the guilty.

Now we are in this mess, the response has been somewhat more decisive than other countries (although it's a shame they waited fourteen months between August 07 and October 08 when Lehman's crashed, to do anything), although this owes more to Alastair Darling who was the driving force behind the bailout.

I'm amazed that someone of the undoubted intelligence of Gordon Brown could have been so neglectful of macroecomic policy. This underlines the fundamental point about New Labour- they were always obsessed with fiscal policy- tax and spend and redistibution of income- monetary policy and macroecomic stability was taken for granted and ignored.

Whilst Brown may be getting into his stride now in addressing these issues, the fact that he made these errors is something that history will judge him for.

but look at the positives

you clearly foresaw these problems, so you sold your house at the height of the boom, borrowed loads of money, invested in fixed yield gilts and are now writing your comments from somewhere warm and sunny....

Degenerate

Entertainer wrote: »

The big drawback in the current remit for the B Of E is that their primary focus is on controlling inflation so they were very slow to cuts rates last year, against the protestations of David Blanchflower.

They kept their powder dry and it was there when they really needed it, post-Lehman. I don't see that as having been a mistake at all.

It's ironic that export led economies like Japan and Germany are seeing some of the biggest falls in GDP when they were less culpable for the recession happening. The fact that the innocents are suffering more doesn't give a free pass for the guilty.

It's an old prejudice that some people cannot shake off, the idea that production is virtuous and consumption is sinful. The fact that it takes two to tango, you cannot have one without the other, that our consumption allowed their production to flourish in the first place, is overlooked.

Imbalances are never a good thing, they always have to correct in the end, but what is happening now demonstrates that we were on the better side of the imbalance - it isn't too painful to cut our consumption of imported goods. That doesn't make us guilty and them innocent victims, it makes them unwise to have relied on foreign demand.