Is the UK heading for a double-dip recession?

Former_MSE_Lee

Poll between 6-13 July 2010:

Is the UK heading for a double-dip recession?

We’ve been out of recession now for five months (defined as the economy shrinking for 2+ consecutive quarters), yet the FTSE is down and there’s reduced govt spending, so could we dip back in?

Quick Stats

Current growth: Up 0.3% in first quarter
Economy shrank during 2009: Down 4.8%
Govt predicted growth for 2010: Up 1.2% (2.3% for 2011)

What do you think will happen to the economy over the next year?

A. Boom: Up over 3.5% - 1% (89 votes)
B. High Growth: Up 1.5% to 3.5% - 1% (169 votes)
C. Growth: Up 0.3% to 1.5% - 20% (2415 votes)
D. Stagnation: Not much growth or shrinkage - 34% (3981 votes)
E. Contraction: Down 0.3 to 1.5% - 18% (2163 votes)
F. Recession: Down 1.5% to 3.5%% - 18% (2154 votes)
G. Crash: Down over 3.5% - 7% (857 votes)

Total Votes: 11828


Please vote here, or click 'post reply' to discuss below.


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creditchick

The 'kneejerk' response of the new coalition government may show a short term recovery but longer term, I can see only a return to the dark days of the doom and gloom of the 1980s!

Wayne1_2

Creditchick, you are either quite young and therefore do not know or you are older and have forgotten, but the “dark days of the doom and gloom of the 1980s”, as you call them were brought about by Labour just about bankrupting the country in the 1970’s. It is for me and many others of all political persuasions D!jà vu.

jonthedog

A large part of any 'depression/recession' is psychological; if people think they are in or heading for a recession they will spend less, banks will lend less, and businesses and entreprenures will take less risks; all of which has a massive negative impact on the 'real' economy.
If everyone can collectively think a bit more positively and talk up the economy whenever possible, it has the converse effect and does genuinely benefit everyone...
:beer:

Paul_Herring

Isn't the phrase "double dip recession" predicated on us having substantively left the last recession? Which we actually haven't.

The GDP growth figures since late last year have all been in what could politely be called 'margin of error' and the technical concept of 'recession' (X months of negative GDP growth) really have nothing at all to do with reality.

millie600

As long as this, or any, government continues to blame the general public for the economic mess caused by the mind boggling greed of the financial sector, and others, ( we have already been punished by having our money used, without our consent, to bail out the banks and other financial institutions) they can only expect rebellion from the masses! When the hike in VAT kicks in next year it will hit the poorest in society - the wealthy won't care a toss because many of them have VAT registered businesses and are able to claim it back on almost anything they buy 'for their business' ha-ha! This will lead to much less spending by the majority, more businesses will go bust and we will end up in a depression and rioting will follow! Our MP's have shown us over the past 2 years and more that they only care about lining their own pockets - have you all forgotten the expenses scandal? As for the blame in starting this cycle of greed, in my book the blame lays fair and square with Margaret Thatcher who conned many people into buying what they already owned when she privatised everything that the nation owned with the lure of a quick buck when you sold what you owned and legitimised the deal!
Compare how much profit individuals made when they sold their shares at bargain basement prices to the value of the shares once the majority of them were in the hands of the fat cats, who became multi-millionaires overnight!
Martin should start a discussion on what effect a charitable organisation, Common Purpose, has in influencing Government strategy?
Bring on the Euro Police!:eek:

Paul_Herring

As long as this, or any, government continues to blame the general public for the economic mess[...]

LOLWUT? Just because it's our taxes propping up the banking sector, doesn't mean we're actually getting the blame; we're just a convenient source of funds.

p376p

jonthedog wrote: »

A large part of any 'depression/recession' is psychological; if people think they are in or heading for a recession they will spend less, banks will lend less, and businesses and entreprenures will take less risks; all of which has a massive negative impact on the 'real' economy.
If everyone can collectively think a bit more positively and talk up the economy whenever possible, it has the converse effect and does genuinely benefit everyone...
:beer:

While I agree with you that thinking positively is better than the contrary, the actual situation we are in affects how we think.

What the government has been doing so far is to artificially keep the house prices steady or up to make people feel good. You always feel good when your house goes up in price every month as you don't have to worry much about your future even getting into more debts now. However, I don't know how long this can last.

Once the life machine for the house prices is off, this 'feel good' factor will disappear quickly and all of us will have to face the reality. We will have to worry about our future as well as our debts. Then any kind of thinking will not make much difference.

My point is that talking up the economy is not a real solution to making a significant difference to the economy. It may help ease some pain but at the same time may prolong the suffering.

michaels

Sorry Martin - are we voting on growth out turn for 2010 or for a 12 month period covering April to April 2011 or even july-july 2011?

MartinWickham

It won't be a 'double dip' recession, because we never came out of the last one. The last Government merely pumped money they didn't have (quantitative easing) into the economy (scrappage schemes, artificially low interest rates) to try to buy time. Now we're due to have the recession we stalled, plus the additional cost of stalling it.

jonthedog

p376p wrote: »

Once the life machine for the house prices is off, this 'feel good' factor will disappear quickly and all of us will have to face the reality. We will have to worry about our future as well as our debts. Then any kind of thinking will not make much difference.

I don't think that the government has been 'doing all it can to keep house prices steady or up to make people feel good'; sure interest rates are low (set by the bank of England, not the governement), but I don't think that's why they are low, or that steady/rising house prices are a definate effect of this. The fact is that house prices were MASSIVELY overpriced before, and I and many, many first time buyers were very unhappy about this . Even now, having bought my first home and wanting to move up in the property ladder (as you would hope the majority of people who want to move do), would love it if house prices either stagnated, or better yet, collapsed, :rotfl:as proportionally the next move up would cost less. If you aren't moving, the price of your house hopefully shouldn't be affecting your happiness too much.