Is David Kauders right to forecast more trouble ahead for UK economy

tradetime

I suspect we will see a fairly strong recovery through the current year at least, economic growth will likely surprise to the upside. It is unlikely the government can exit it's QE program before the general election at the very least.

Thrugelmir

tradetime wrote: »

I suspect we will see a fairly strong recovery through the current year at least, economic growth will likely surprise to the upside. It is unlikely the government can exit it's QE program before the general election at the very least.

Its going to take a lot longer than 3 months to unwind £200 billion from the banking system. Could make for interesting times ahead.

tradetime

Thrugelmir wrote: »

Its going to take a lot longer than 3 months to unwind £200 billion from the banking system. Could make for interesting times ahead.

I agree, badly worded, what I'm actually referring to is the end to QE, (slated for the end of this month?) I don't see that. I suspect the figure to be closer to £300 billion by the time it ends.
Unwinding it is a whole other issue, it will take several years for that .

Nosht

Let's face it, we have not had a dramatic price collapse for a couple of years now; it's long overdue & will come soon enough &, once again, all the "experts" will be surprised.

Regards,

N.

meunier

Two questions - and please forgive my general ignorance in advance.

I largely live off savings of monies that I have earned in the past and of which I have fought to see that the capital remained secure.

I wonder when people think that interest rates will begin to rise again? I assume that banks at some point (with the end of QE) will require a fresh intake of cash and may not have ALL the options that had been previously open to them prior to the so-called crisis.

With the end of the QE, do think it may have a considerable impact on the pound? I can see the need for inflation for the fiscal services, but if the currency were to be devalued considerably surely it could lead to a yet more unfortunate state of affairs.

Again, my apologies in advance for my general state of ignorance in this specific regard.

Thrugelmir

meunier wrote: »

Two questions - and please forgive my general ignorance in advance.

I largely live off savings of monies that I have earned in the past and of which I have fought to see that the capital remained secure.

I wonder when people think that interest rates will begin to rise again? I assume that banks at some point (with the end of QE) will require a fresh intake of cash and may not have ALL the options that had been previously open to them prior to the so-called crisis.

With the end of the QE, do think it may have a considerable impact on the pound? I can see the need for inflation for the fiscal services, but if the currency were to be devalued considerably surely it could lead to a yet more unfortunate state of affairs.

Again, my apologies in advance for my general state of ignorance in this specific regard.

Interest rates will rise over time. As the global economy improves then the UK will be forced to follow the G20 countries as rates rise.

To achieve normal liquidity. The banks will progressively lend less and individuals save more. May take a decade to achieve. That is the only way forward. Aided by inflation of course.

Masomnia

meunier wrote: »

Two questions - and please forgive my general ignorance in advance.

I largely live off savings of monies that I have earned in the past and of which I have fought to see that the capital remained secure.

I wonder when people think that interest rates will begin to rise again? I assume that banks at some point (with the end of QE) will require a fresh intake of cash and may not have ALL the options that had been previously open to them prior to the so-called crisis.

With the end of the QE, do think it may have a considerable impact on the pound? I can see the need for inflation for the fiscal services, but if the currency were to be devalued considerably surely it could lead to a yet more unfortunate state of affairs.

Again, my apologies in advance for my general state of ignorance in this specific regard.

If anything I'd have thought the end of QE would mean the £ increasing in value as it means fewer £s entering the system, but you can't really tell anything for sure. Only £5 billion to go so it won't be too long before we find out what the effects will be.

The weakened £ has been a positive thing for the UK economy so far as it has made our exports more competitive, and only really hurts the consumer if you buy a lot of imported goods or if you go abroad.

As for interest rates, I think they're expected to rise towards the end of this year.

OneADay

Masomnia wrote: »

The weakened £ has been a positive thing for the UK economy so far as it has made our exports more competitive, and only really hurts the consumer if you buy a lot of imported goods or if you go abroad.

Except that the uk imports more than exports ..I think. And a weakened pound means less poles but more expensive goods. The real truth which the government is keen not to talk about. Black Wednesday was nothing compared to the events of the last 2 years.

Thrugelmir

OneADay wrote: »

Except that the uk imports more than exports ..I think. And a weakened pound means less poles but more expensive goods. The real truth which the government is keen not to talk about. Black Wednesday was nothing compared to the events of the last 2 years.

And we import increasing amounts of oil and gas. Energy costs are going one way.

OneADay

Thrugelmir wrote: »

And we import increasing amounts of oil and gas. Energy costs are going one way.

I could bang my head against the wall as to why the government has not invested in science and technology over the 10 years and new nuclear plants. We were being warned at school in 80s about fuel shortages 20 years on. :eek: