UK economy set for biggest fall since 1945

themanbearpig

http://www.independent.co.uk/news/business/news/uk-economy-set-for-biggest-fall-since-1945-1752127.html

But Item predicts that the sharp contraction this year will be followed by a modest recovery of 1.7 per cent next year. Professor Spencer warned that recent hopes of green shoots are "running ahead of reality", and predicted that we will not see a sustainable improvement in the UK economy until world trade starts to pick up. "Unfortunately," he said, "it is hard to see any very solid grounds for sustained optimism at the moment." He also said GDP could fall by as much as another 3 per cent if the threat of swine flu is as bad as the worst predictions.

GDP and Unemployment, both of the fundamental economic indicators are are at record lows. Now with swine flu starting to develop, I can't see how there can be any recovery for a long time.

Capital remains short and expensive for the banks, and there is currently little sign of any extra lending to either companies or consumers. Banks are saying that they will expand lending more aggressively over the next three months, but it seems unlikely they'll come close to meeting the demand for credit," said Professor Spencer.

Item also predicts interest rates will stay at 0.5 per cent into next year and then will only increase by very small amounts for about 18 months. Despite efforts by the Bank to pump money into the economy through its quantitative easing (QE) programme, corporate liquidity and borrowing is still weak and net lending to the housing market remains close to zero.

The Housing market is on its next leg down now, now the spring bounce is over. The future looks bleak unfortunately, and things will only get worse when unemployment takes hold.

amcluesent

It's the kiddies I feel sorry for.

I hear their carefree laughter in the playground and inevitably one foresees a future where the Four Horsemen of the Apocalypse are riding out.

My heart sees its own image
Painted in the sky.
It is nothing but winter –
Winter , cold and savage.

Laugh now while you may, for soon enough, you'll have pestilence, famine, war and death as your companions. Grim, grinding years of austerity will be your inheritance.

Ah, and if the leaf falls to the ground
My hopes fall with it;
I, too, fall to the ground
And weep on the grave of my hopes.

bluey890

amcluesent wrote: »

It's the kiddies I feel sorry for.

I hear their carefree laughter in the playground and inevitably one foresees a future where the Four Horsemen of the Apocalypse are riding out.

Laugh now while you may, for soon enough, you'll have pestilence, famine, warand death at your side. Grim, grinding years of austerity will be your inheritance.

Ah, and if the leaf falls to the ground
My hopes fall with it;
I, too, fall to the ground
And weep on the grave of my hopes.

If humankind is good at one thing. It is adaptability.

Masomnia

amcluesent wrote: »

It's the kiddies I feel sorry for.

I hear their carefree laughter in the playground and inevitably one foresees a future where the Four Horsemen of the Apocalypse are riding out.

My heart sees its own image
Painted in the sky.
It is nothing but winter –
Winter , cold and savage.

Laugh now while you may, for soon enough, you'll have pestilence, famine, war and death as your companions. Grim, grinding years of austerity will be your inheritance.

Ah, and if the leaf falls to the ground
My hopes fall with it;
I, too, fall to the ground
And weep on the grave of my hopes.

Winterreise?

Masomnia

Yeah I thought I recognized that image of the falling leaf. Letzte Hoffnung, Last Hope. quite like a bit of Schubert. Gute Nacht is my favourite one. 'Fremd bin ich ein gezogen, fremd sie ich wieder aus.' A stranger I arrived, I stranger I leave', or something like that. Have to be in the right mood though. I feel I know you a bit better now haha.

On topic. In what way are they comparing us to 1945? I don't believe we had a recession then, but I'm happy to be corrected.

mewbie_2

Masomnia wrote: »

On topic. In what way are they comparing us to 1945? I don't believe we had a recession then, but I'm happy to be corrected.

I remember coming back from the North Afrcian front at the time, and there wasn't much you could buy in the shops. It was a bit of a let down after browsing through the bazaars of Timbuctoo. My mate Tommy and I managed to get 20 Woodbines and blag our way into a VE celebration - but once the fun was over it was mainly unemployment for the next ten years.

Rationing - maybe that's what they mean.

Graham_Devon

Masomnia wrote: »

On topic. In what way are they comparing us to 1945? I don't believe we had a recession then, but I'm happy to be corrected.

All to do with the war

Masomnia

Graham_Devon wrote: »

All to do with the war

Well, obviously the economy took a beating and we owed America a lot, but still I don't think we had a recession. I don't know, maybe I'm wrong.

My point is we have this rather shocking headline, re-iterated in the first paragraph, and then nothing else. Did GDP actually fall then? Is the method of measuring the same? Are the data as reliable? How many quarters? Seems a bit disingenuous to me.

Austin_Allegro

I think it's just lazy journalism. It's either just using 1945 as a marker point (like they do with 'the worst weather since records began') or it really means since the 1930s but including the war because that wasn't a normal economy.

It's lazy journalism because as posters have pointed out, the economy wasn't in recession in 1945 as the economy was on a war/export footing. There was unemployment but that was mainly due to large numbers of demobbed servicemen whose jobs didn't exist anymore or were being done by women. Once this had been sorted out and industry had recovered it was 'never had it so good' and the 'white heat'.

It would have been better to say 'biggest fall since the 1930s' IMO.

geoffky

Was it not the case that jobs where created for the returning troops after the war...can some one explain what happened to all the returning troops and did the women get chucked out of the factorys..

Masomnia

geoffky wrote: »

Was it not the case that jobs where created for the returning troops after the war...can some one explain what happened to all the returning troops and did the women get chucked out of the factorys..

Britain lost the better part of half a million people to the war, soldiers and civillians, so there was no real shortage of jobs as the supply of the labour fell dramatically, no need to create new ones. Except that the economy was geared up entirely for war, so needed restructuring, and in that sense new jobs had to be created.

Essentially though, yes women were turfed out and the men went back to their old jobs and we get the idealized 50s housewife. Had more long term effects though, women did prove that they could do jobs just as well as men in many cases, so much more equality in the workforce as time goes by.