City taken by surprise as Bank of England’s figures herald end of recession

bendix

mbga9pgf wrote: »

I dont know why I bother.

In fact, this will be my last post on this page for a while. I have been spending less time on here anyway of late.

There is a distinct difference between wanting the economy to further downturn and having a belief it will downturn. Massive difference. I can hope to have a million quid in the bank, will never make it happen. Whereas, I think the economy is set for a significant further downturn. Either way, until later this year, we will either see stagnant prices or prices slowly drifting upwards. Next year as a whole will be pretty horrendous for all, with cuts in front line services, benefits affecting the lower classes and horrendous income tax and NI contributions affecting the middle/upper classes.

Either way, next year's emergency post election budget is going to be bad for house prices.

See ya losers.

Before you go, how do you get by on only £50k a year? Don't you find it a bit of a struggle?

Rochdale_Pioneers

Graham_Devon wrote: »

Yes. But I also remember how when that was predicted, we didnt know the full scale of how far this government and BOE would go on a political gesture to get things turned around by spring 2010.

And you said that at the time did you?

Thrugelmir

lemonjelly wrote: »

I'm suprised at the debate here. after all, the BoE is struggling to know what's going on - aren't they split as to the amount of QE still needed? Didn't Merv think £75bn was needed, not just £50bn.

(Can't believe I just typed "just £50bn"!!!)

Agree LJ. The whole situation is actually out of direct control of either BOE or Government hands. The direct result of the lastest QE annoucement was negative for the pound on the exchange markets. This shows that further QE will push the pound even lower. Increasing the cost of imported gas, oil and commodities. This will do little for the broader economy.

As this will then put upward pressure on inflation.

Buckle your seat belt and wait for the ride to begin.

julieq

Being out of recession doesn't mean anything more than we're back with a marginally growing economy from a low starting point. It doesn't mean we're magically back to how we were before all this started, it just means we've stopped contracting and we're sitting at a point just above the bottom we reached. There's not a lot of impetus for sustained growth in the real business world, believe me, but what this may do is provide the confidence to back some limited reinvestment, which is positive for everyone. Ultimately it becomes a positive feedback cycle rather than a downwards spiral.

So everyone's right really.

There isn't a whole lot of inflationary pressure in the general economy. That may sound an odd statement, but it's a complex situation and you have to isolate the part of inflation that is dangerous, principally wage inflation. Yes, prices of imported goods may go up, but that won't lead to a spiral of domestic wage inflation, because frankly there isn't any possibility of labour costs being allowed to rise any time soon. We are tending to import goods and raw materials and export with added value, so the additional costs from currency on the one side are compensated by the currency benefits on the other, there's a balancing effect. It's not crushing to industry.

In a sense we may be revaluing our domestic worth against a higher absolute bar of value globally. This is one of the things the bears haven't really noticed, in that as we devalue our currency, houses suffer a corresponding drop in absolute value in global terms. We see the drop only in our currency, if you measure it in (for example) the dollar price mid 2007 to the dollar price now, you start seeing something approaching the falls the bears were predicting.

Graham_Devon

Rochdale_Pioneers wrote: »

And you said that at the time did you?

!!!!!! kind of response is that?

There could be an earthquake tommorow with the epicentre on London wiping out Canary Wharf which would effect the economy slightly.

But I don't go round saying "but there could be an earthquake tommorow which wipes out canary wharf so you may be wrong".

If your response is in hindsight to say "and you said that at the time did you" it says a lot.

Rochdale_Pioneers

Graham_Devon wrote: »

!!!!!! kind of response is that?

There could be an earthquake tommorow with the epicentre on London wiping out Canary Wharf which would effect the economy slightly.

But I don't go round saying "but there could be an earthquake tommorow which wipes out canary wharf so you may be wrong".

If your response is in hindsight to say "and you said that at the time did you" it says a lot.

I'm contrasting your completely reasonable and balanced statement now with what all you frothers have been saying since the Budget - that Britain is sunk, the Chancellor doesn't have a clue and his forecast of recovery in 2009 is laughable.

Your problem is in clinging to economic forecasts that fit your political narrative and rubbish all those which don't. The only thing thats been consistent about economic forecasts is that they've all been wrong. But at least the ones produced by governments and experts are created by people who know how economies work.

julieq

Graham_Devon wrote: »

Yes. But I also remember how when that was predicted, we didnt know the full scale of how far this government and BOE would go on a political gesture to get things turned around by spring 2010.

Is it really any more realistic to suggest that no-one would have done anything?

One of the ideas that sits behind a lot of uber bear thinking is that events will inevitably spiral off out of control without anything being done about them or without any of the underlying assumptions changing. Where in fact, where there are problems people seek solutions and often find them. It's rather like looking at a house on fire and predicting that the whole town is inevitably going to burn down, then being surprised to see the fire brigade arrive. Straight line thinking, in other words. Fire brigades are expensive and we have to pay for them, but they do fix a more expensive problem.

Darling may be unpopular, but he does have access to proper experts and he's presumably not going to willingly make himself a hostage to fortune by being overoptimistic. So he would have had good reasons to say what he did, beyond bravado which is what a lot of people (including myself) believed it was at the time.

Graham_Devon

julieq wrote: »

Is it really any more realistic to suggest that no-one would have done anything?

One of the ideas that sits behind a lot of uber bear thinking is that events will inevitably spiral off out of control without anything being done about them

No one ever said nothing would be done.

If you read again, I said:

Yes. But I also remember how when that was predicted, we didnt know the full scale of how far this government and BOE would go on a political gesture to get things turned around by spring 2010.

Note the bit "full scale". That suggests that I knew something would be done, but didnt know the full scale.....as no one did. Who predicted rates at 0.5%, £1000 to buy a car and 175bn of QE?

May I also ask what that had to do with bears? Or uber-bears? Or zombies? I'm not sure what the need is in all your posts to have a go at the bears?

chucky

Graham_Devon wrote: »

May I also ask what that had to do with bears? Or uber-bears? Or zombies? I'm not sure what the need is in all your posts to have a go at the bears?

http://forums.moneysavingexpert.com/search.html?searchid=64677645
that's 84 posts that you've made reference or questioned the 'bulls' as you call them - pot? kettle? black?

Really2

Graham_Devon wrote: »

Note the bit "full scale". That suggests that I knew something would be done, but didnt know the full scale.....as no one did. Who predicted rates at 0.5%, £1000 to buy a car and 175bn of QE?

To be fair

A) We were talking about rate cuts last August/Sept. (I think I was predicted to go to around 1.5%)
http://forums.moneysavingexpert.com/showthread.html?t=1251599&highlight= fist talk of 0.5% October
I posted about the German scrappage thing and said something like it could happen here. http://forums.moneysavingexpert.com/showthread.html?t=1610861&highlight=
C) QE was talked about before it happened also. (that was mainly hyper inflation chats)

Perhaps you missed them.