Slowdown in the economy costing every family £920

HAMISH_MCTAVISH

Slowdown in the economy costing every family £920


The slowdown in the British economy will cost the equivalent of almost £1,000 for every household in the country, it emerged yesterday.

According to the Bank of England, the economy will grow only 1 per cent this year and next, rather than the 1.5 per cent and 2.1 per cent previously forecast.

It could mean that the British economy will end next year worth £1,482  billion, instead of the £1,505 billion it would have been predicted to reach.

The £23 billion difference is the equivalent of about £920 for each of the 25 million households in Britain.

Sir Mervyn told MPs yesterday that most of the reduction in UK growth was caused by problems in Europe. He predicted that as a result of the eurozone crisis, the UK’s economic growth would probably be “flat or close to zero” over the next six months.

“Going forward we are concerned that problems in the euro area could lead to weaker exports than we expected,” he said. The euro crisis is also threatening Britain’s banks.

The OECD said the economy would shrink by 0.03 per cent in the current quarter and 0.15 per cent in the first quarter of 2012. It also predicted a full recession in the eurozone countries, and cut its forecasts for growth in the global economy for this year and next.

Labour said the OECD report showed that government spending cuts had “choked off” any growth in the UK economy.

A ComRes/Independent opinion poll last night showed that 69 per cent of people want Mr Osborne to slow the pace of cuts in order to help the economy recover

http://www.telegraph.co.uk/finance/financialcrisis/8921894/Slowdown-in-the-economy-costing-every-family-920.html

Really backs up what has been said in other threads.

This is turning into a real political problem for the coalition.

chewmylegoff

So apparently it costs me (shortfall in GDP)/(number of households) if the economy doesn't grow as projected. Pretty sure there's some seriously flawed maths going on there.

Got any stats about how much it costs per household if we just borrow a load more money? Oh that's right, someone else can pay for that later.

Caveat_Mortgagor

Note the clever use of the word 'worth'. GDP is total spending. Worth has a totally different meaning.

Also, using the gdp measure, families have been getting poorer for many years. They just didnt know it.

The problem with GDP is that its a bit like counting the increase in the value of your assets, without counting how much extra debt you took on to acquire them. Assume you bought a £200k house with a £40k deposit and £160k mortgage. Well believing the gdp measure of wealth is analagous to thinking that by buying a house your assets went up from £40k to £200k whilst completely ignoring the fact that you have increased your debts by just as much.

1998 was the last time the Uk economy grew by more than the extra amount borrowed by consumers, companies and government. If all growth is derived from borrowing more than the amount by which the economy grows, then really you are building a house of cards. Effectively we have been concentrating on the 'assets' column in the accounts, without acknowledging that the liabilities has been consistently growing at a much faster pace than assets.

And it is exactly because the one eyed loon was able to get away with such a smoke and mirrors trick that people believed there would be no return to boom and bust. Alas this merely fanned the flames and gave people confidence to borrow even more than they might otherwise have done.

It was the type of confidence trick that you would expect to see explained the by 'the hustle' tv programme.

And that ladies and gentlemen is the abbreviated version of how we got here.

nembot

Pretty bloody obvious its gonna to take more than a couple of years to sort this mess out, anyone expecting a quick miracle fix is kidding themselves!

OptionARMAGEDDON

rate cuts anyone?

macaque_2

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/financialcrisis/8921894/Slowdown-in-the-economy-costing-every-family-920.html
Really backs up what has been said in other threads.
This is turning into a real political problem for the coalition.

I am puzzled by this post. You seem to be implying that the pain of the spending cuts or the potential political fallout is somehow a new discovery. I thought everyone knew about the pain and political fall out that faced anyone who picked up the reigns from messers Brown and Blair.

A lot of people (and this seems to be your position) are looking for another bail out from nanny so that we can go on living beyond our means. Unless we square the books at some point, the UK will find it very expensive to borrow money. We are by some measures, the indebted nation in the world. We cannot go on paying ourselves more than other countries or supporting such a high public sector burden.

Graham_Devon

HAMISH_MCTAVISH wrote: »

http://www.telegraph.co.uk/finance/financialcrisis/8921894/Slowdown-in-the-economy-costing-every-family-920.html

Really backs up what has been said in other threads.

This is turning into a real political problem for the coalition.

So on this basis, if the government borrows oodles of money, every man, women and child in the country will find themselves better off?

I like that. Better just keep borrowing more and more money. We'll all just continually get richer and richer!! Why has no one done this? I think I will stand for parliament. This incumbent lot are a load of blithering fools if they can't work out this very basic solution to all of our ills.

chewmylegoff

Graham_Devon wrote: »

So on this basis, if the government borrows oodles of money, every man, women and child in the country will find themselves better off?

I like that. Better just keep borrowing more and more money. We'll all just continually get richer and richer!! Why has no one done this? I think I will stand for parliament. This incumbent lot are a load of blithering fools if they can't work out this very basic solution to all of our ills.

what you mean apart from the previous government in every year from 1999 to 2010?

Graham_Devon

chewmylegoff wrote: »

what you mean apart from the previous government in every year from 1999 to 2010?

Yes, but they appear to have pulld back? I cannot understand this. Why are they sending us purposely into recession if they can simply borrow more and make us all wealthier!

There must be a reason?! :doh:

ruggedtoast

Lest anyone forget this is directly down to reckless profligacy of New Labour pandering to Boomernomics. Every pound that thief Brown borrowed to buy boomer votes is being sucked from the very marrow of the young.

Kennyboy66

Georgie boy can still find a few quid to squander on this daft idea.

http://www.telegraph.co.uk/finance/budget/8921946/Autumn-Statement-2011-Children-aged-two-to-get-free-place-at-nursery.html

It may make sense if we had low un-employment, but at the moment it is an utter waste.