Recession

villa2010

Hi Folks,

The economy seems to be suffering again.

I was just wandering do you think there will be another double dip recession...?

Which industries do you think will be affect the most.

Mrs_Bones

I think retail and service industry is in trouble what ever happens, whether it's another recession or just the rising cost of living, inflation and high unemployment, people just have less to spend.

villa2010

Mrs_Bones wrote: »

I think retail and service industry is in trouble what ever happens, whether it's another recession or just the rising cost of living, inflation and high unemployment, people just have less to spend.

Do you think there will be another recession though...?

Will building and manufacturing services suffer.

B_Blank

Nobody knows. Some say european markets have priced in a recession but the UK/US are less sure.

villa2010

With Growth being 0.2 and Inflation being 4.5% are we not technically in a recession...?

B_Blank

villa2010 wrote: »

With Growth being 0.2 and Inflation being 4.5% are we not technically in a recession...?

No doesnt work like that. That inflation figure is just price changes vs a year ago.

Loughton_Monkey

villa2010 wrote: »

Hi Folks,

The economy seems to be suffering again.

I was just wandering do you think there will be another double dip recession...?

Which industries do you think will be affect the most.

The word "recession" is arbitrarily defined as two or more consecutive quarters of negative growth in GDP.

To simplify, GDP is, in essence, the sum total of all our spending.

We can only spend what we earn, or a little bit more if we can borrow.

Up until 2008, we were all spending like crazy. Not fully recognised was the huge additional amount that we also spent, but not deliberately. This was spent, on our behalf, by Brother Brown and best friend Alistair.

When the first 'recession' came, some of us decided not to spend as much - and certainly not if we didn't have it. Brother Brown knew differently. He spent even more of our money to compensate. This appeared to get us out of 'recession'. There was more 'spending', hence more GDP.

Not unsurprisingly, we all continue to spend less and less. Why would we do any different? Some are losing jobs. Some are suffering pay freezes. Some have to pay more for pensions. Others have had their credit cards stopped. All well and good.

Now here's the shocker. That nice Mr Osborne has worked out that it would also be a good idea if the government did not contiune to spend more and more of our money to keep GDP up. In fact he has cottoned on to the fact that we need to spend less.

Phew! That's a courageous idea, isn't it? To stop spending our money, that we don't have in the first place.

So if you and I are going to spend less. And that nice Mr Osbourne has been told by the bank that his overdraft is too high, so he won't be spending, why do we need to be surprised that GDP will fall again?

villa2010

B_Blank wrote: »

No doesnt work like that. That inflation figure is just price changes vs a year ago.

Do you think that this 1/4 will be lower growth that 2%

B_Blank

Loughton_Monkey wrote: »

The word "recession" is arbitrarily defined as two or more consecutive quarters of negative growth in GDP.

To simplify, GDP is, in essence, the sum total of all our spending.

We can only spend what we earn, or a little bit more if we can borrow.

Up until 2008, we were all spending like crazy. Not fully recognised was the huge additional amount that we also spent, but not deliberately. This was spent, on our behalf, by Brother Brown and best friend Alistair.

When the first 'recession' came, some of us decided not to spend as much - and certainly not if we didn't have it. Brother Brown knew differently. He spent even more of our money to compensate. This appeared to get us out of 'recession'. There was more 'spending', hence more GDP.

Not unsurprisingly, we all continue to spend less and less. Why would we do any different? Some are losing jobs. Some are suffering pay freezes. Some have to pay more for pensions. Others have had their credit cards stopped. All well and good.

Now here's the shocker. That nice Mr Osborne has worked out that it would also be a good idea if the government did not contiune to spend more and more of our money to keep GDP up. In fact he has cottoned on to the fact that we need to spend less.

Phew! That's a courageous idea, isn't it? To stop spending our money, that we don't have in the first place.

So if you and I are going to spend less. And that nice Mr Osbourne has been told by the bank that his overdraft is too high, so he won't be spending, why do we need to be surprised that GDP will fall again?

Some say this recession has proved Keynesian ideas to be wrong. You cant just spend your way out of recession if your borrowing costs reach higher levels as a result

B_Blank

villa2010 wrote: »

Do you think that this 1/4 will be lower growth that .25%

No idea. Difficult to say. You need to look at all the data which is varied and complex. Often is gives a contrasting view of what is happening. Certainly most the surveys from the uk have pointed to weak growth recently. The figures have often been called worse than expected. But most still show growth. None of this data is reliable on its own though. Probably the best figure to follow for news on where the global economy is heading is the monthly us jobs data.

The FTSE largely ignores the UK, so I wouldnt rely on how that is doing to decide how the uk economy is doing.

lvader

villa2010 wrote: »

With Growth being 0.2 and Inflation being 4.5% are we not technically in a recession...?

GDP growth is already inflation adjusted, so the 0.2 was on top of the 4.5% inflation.