0.5% growth 1st Quater 2011

chucky

1984ReturnsForReal wrote: »

0.5% growth 1st Quater 2011

this baby ain't finished yet - long way to go on this ride...

but at least it shuts up the usual suspects about double dip recessions and how they predicted a double dip recession bla bla bla

Thrugelmir

Generali wrote: »

True. That doesn't mean that base rates have to remain at 0.5% though. They could probably rise to about 2% with very little impact on market rates. The difference is just a subtle transfer from the BoE to banks.

Totally agree. One market analyst put the influential point at a base rate of 1.5% last week.

shortchanged_2

RenovationMan wrote: »

It's not strange at all, a -0.5% contraction in the economy followed by a 1% expansion tells the tale of an economy that is bumping along at the the bottom. Surely, even you would admit that we dont have an overheating economy that requires an increase in interest rates to dampen down activity?

What is this 1% expansion you are referring to. The economy grew by 0.5% which equates to zero growth over the past 6 months.

shortchanged_2

chucky wrote: »

this baby ain't finished yet - long way to go on this ride...

but at least it shuts up the usual suspects about double dip recessions and how they predicted a double dip recession bla bla bla

I'm afraid I ain't convinced yet chucky.

Thrugelmir

RenovationMan wrote: »

It's not strange at all, a -0.5% contraction in the economy followed by a 1% expansion tells the tale of an economy that is bumping along at the the bottom.

The economy is rebalancing. At least that's the hope. So there'll be plenty of + and - in various sectors for many years resulting in a minimal growth pattern. What's required is investment by business to stimulate activity. The economy is so weighted towards the service and public sectors currently. That's its not going to be that straightforward a task. As takes time for new investment to come to fruition.

Milarky

When you say something falls by 0.5% then rises by 0.5% that would normally indicate that it is now lower overall since 0.995 x 1.005 < 1.000

[That's what you'd expect to learn in school or college]

However references above to the year 2006 (i.e 2006 GDP= '100') suggest I've got this naive interpretation wrong - and a '0.5% rise' (to '99.6?') doesn't refer to '0.5%' over the previous quarter ('99.1?') at all but to an index.

I understand the reasoning - the figures are pretty imprecise anyway (only 1 sig fig) even assuming they won't get revised - so having a 'cheat' scheme whereby it becomes possible to speak of 'adding and subtracting' percentages helps everyone.

Just to try and be clear what I'm saying

It seems GDP is now once again where it stood two quarters ago - '99.6' in 2006 terms. The reported changes are to this index and thus should not be confused with 'growth' (or lack of) because 'growth' is a rate of change.

Of course once Oxbridge educated economists in government start bandying percentages around without qualification it's certain that they don't really know what they are referring to (i.e. a rate of change or a level) which should worry everyone else. There is zero chance, however, of getting the general public to worry about the distinction but it does show you don't need to understand details in order to run the country.

sabretoothtigger

China is exporting inflation.

Their currency isnt freely tradeable or exportable and they dont really have a full bond market. The goods they export are subject to competition from places like Vietnam where wages are lower

I think China has higher costs from imports and from wage costs and they are having to charge more, does that make them exporters of inflation or just subject to it


I think USA is the prime suspect because they do not have as much inflation as others suffer.
How is that possible when they import so much, I see them as a net exporter of inflation.

Their currency is widely held the world over and used abroad natively by foreign governments, so policy decisions in Washington have direct control over foreign citizens of otherwise unrelated nations where as China is closed and indirect in its influence though it might be still great

Also USA produce and sell large amounts of bonds to foreigners - each time tied to less substance . Even stretched Japan with 200% GDP debt could argue they sell mostly to their own people so count as less globally

Sapphire

Thrugelmir wrote: »

The economy is rebalancing. At least that's the hope. So there'll be plenty of + and - in various sectors for many years resulting in a minimal growth pattern. What's required is investment by business to stimulate activity. The economy is so weighted towards the service and public sectors currently. That's its not going to be that straightforward a task. As takes time for new investment to come to fruition.

Not even sure whether it's a good thing for economies to keep growing and growing. Apart from indicating that a massive waste of resources is occurring, doesn't this suggest that people are still living beyond their means, and/or that Britain (and particularly London) is way over-priced? Prices of everything, including property, need to go down to more realistic/affordable levels that are in line with people's earnings. People in some private businesses I know of have not had a pay increase for several years.

Generali

Sapphire wrote: »

Not even sure whether it's a good thing for economies to keep growing and growing. Apart from indicating that a massive waste of resources is occurring, doesn't this suggest that people are still living beyond their means, and/or that Britain (and particularly London) is way over-priced? Prices of everything, including property, need to go down to more realistic/affordable levels that are in line with people's earnings. People in some private businesses I know of have not had a pay increase for several years.

To some extent, rising GDP reflects people using resources (including people's labour) more efficiently.

Japan, for example, uses the same amount of oil per head now as she did in 1974 despite a massive rise in GDP/head.

StevieJ

A good earlier article from the Telegraph, not sure if it has already been posted but here it is anyway.

Whatever the outcome, this will be interpreted as the definitive statement on Q1 growth. But one should beware the false certainty implicit in the official estimates. GDP data is revised substantially over time and the revisions tend to be especially large both during and in the aftermath of recessions, when economies undergo significant structural changes.

http://www.telegraph.co.uk/finance/comment/8469778/History-shows-early-GDP-estimates-are-pessimistic-they-can-be-proved-wrong-later.html