UK Q4 GDP contracts unexpectedly by 0.5 pct qq

Thrugelmir

lvader wrote: »

It makes a difference for individuals importing but multinationals don't generally adjust prices on currency variations.

So bread (Canadian Wheat), oil and gas aren't affected and fluctuate ?

lvader

Commodity prices are affecting countries with strong currencies not just the UK. If you take away the effect of the VAT increase UK inflation is lower than Australia where the currency is very strong and they have high interest rates.

undetterred

AD9898 wrote: »

I have no idea why these figures are 'unexpected', with inflation rising, hammering peoples disposable income, personal indebtedness off the scale, it's no surprise at all and pretty much what I've been saying for months and months.

The crisis that started in Autumn 2007 was just the beginning, governments have thrown everything including the kitchen sink at the problem to no avail, albeit a temporary reprieve.

We are now in a position where the pound is falling, inflation rising, IRs that can't go lower. What's left to do ? Anymore threat of QE will send the pound tanking and inflation rising further.

This is precisely why I've said this economic crisis will be unlike any other. With inflation, indebtedness, sterling weakness and the added problem of peak oil, we are witnessing a perfect storm. And as I've said again on numerous occasions, only people with their 'head buried in the sand', who refuse to accept facts deny the grave position we are in.

The voice from the ivory tower,more peak oil bolx.

padington

undetterred wrote: »

The voice from the ivory tower,more peak oil bolx.

Watch this ...

http://www.youtube.com/watch?v=F-QA2rkpBSY

Generali

Rochdale_Pioneers wrote: »

When I first heard it I thought they said 0.5% growth - nearly crashed when I realised it was -0.5%. Anyway, the snow explanation is at best a fig leaf and at worst the bomb that will explode in Osborne's face. Working in food manufacturing we had one week of significant snow disruption (ie the factory being shut for three days!) and a further week of significant snow havoc on transport. Yet the recovery from the shutdown saw sales up across the fortnight and some recovery of the cash lost that week. So yes, snow had an impact, but not that bad.

And even assuming that 0.5% is down to the snow (and according to Tory Andrew Tyrie of the Treasury Select Committee thats a "back of the envelope guess"), the best case scenario is 0% growth before full data comes in from December to revise it what you must assume (snow disruption and all) will be down. 1.1%, 0.7% and best case scenario 0% in Q2-4. All of which reduces tax revenues and increases government spending, which increases the deficit.

And what will Q1 bring? The VAT increase and the major uncertainty people have about their jobs or at least their standard of living seems unlikely to send them racing to the shops. So my guess is down again. The Tories - having worked very hard very quickly - have successfully created a double dip recession so that they can justify the dismantling of the rest of the public sector. Oik must be very proud.

A week is 7.7% of the quarter. If output fell by 10% in the snowy week alone (probably a conservative figure) then you've cut 0.8% off GDP growth for the quarter.

It's worth noting that austerity hasn't actually started yet and so you can't attribute anything happening right now to austerity: the deficit is still getting bigger not smaller because the current Government has to fulfil all those 'scorched earth' contracts that the Civil Service were apparently ordered to sign in the dying days of the last Government.

smeagold

THE_GHOULS_ARE_FOOLS wrote: »

It's no big deal. The bad weather hit growth a little bit. The UK economy is still motoring ahead. The good times are back again, house prices are booming, there's new jobs galore, don't let the gloomsters get you down.

Whatever your on mate, I want some:D

tomterm8

Generali wrote: »

It's worth noting that austerity hasn't actually started yet and so you can't attribute anything happening right now to austerity:

I'm pretty sure Austerity has, in fact, started. If you look at the figures, a lot of the drop is in the construction sector. Now, the construction sector is something of a forward indicator of government and council spending.

Mostly, government spending on building is coming to a complete stop, with only completing existing contacts but much less new work.

RenovationMan

AD9898 wrote: »

It's interesting that generally all mortgaged homeowners seem to care about is IR's staying low, regardless of the consequences nor the reasons why we got to such a position.

I still believe that the way things are going most of the money being saved on over sized mortgages will be eaten up in essentials as the pound in your pocket becomes worth less and less.

Do you think it will change anything if I posted how much I care about the economy and how much I wish we were still enjoying full employment and economic prosperity in the UK? Are my posts and thoughts really that important to the UK balance of payment figures? I never knew I was so important.

I'm saving thousands on my mortgage and 'essentials' are not that much more expensive than they ever were, providing that your definition of essentials matches mine.

Butterfly_Brain

adr0ck wrote: »

talk of stagflation on bbc

can someone please explain what happens to the uk if we do have stagflation

thanks

IronWolf

tomterm8 wrote: »

No it won't. Reducing the deficit to 3% of GDP means that we are still borrowing at the rate of 3% of GDP.

Yes it will, the deficit includes debt repayment.

The deficit is planned to be about £20bn in 2015, whereas debt repayment is around £50-80bn.