UK economic recovery worse than Great Depression, and no sign of improving

nearlynew

Telling people to fill their cars with fuel is one way of "improving" the gdp figures at the end of this quarter.

Same with stamp price increases.

More spin and bullsh1t.

ILW

StevieJ wrote: »

At least you are consistent, with your deflation is good message

It is good for some.

I would love to see the price of food, petrol, rent, heating, council tax, etc fall. Would that really be so bad?

wotsthat

kabayiri wrote: »

I'm interested in the 'perception' of a continued slump, as much as the reality.

If we have relatively lower growth; continued erosion of the value of savings - a middle/older class effect; and high unemployment - then what are the political impacts ?

Voters always seek the easy win; the voice with the clearest solutions. Will we see the rise of extremist views, or are we embedded into middle-ground politics.

It's opinion but I think we're heading for a rise in more extremist views and increased nationalism as the 'need' for someone, other than ourselves, to blame evolves.

We're seeing it already. It's the lazy Greeks, benefit scroungers, Germans wanting to run Europe etc. etc.

I don't think it's any coincidence that Scottish independence, for example, has been well up the agenda recently. Nothing like a poor economy to help polarise views.

lemonjelly

nearlynew wrote: »

Telling people to fill their cars with fuel is one way of "improving" the gdp figures at the end of this quarter.

Same with stamp price increases.

More spin and bullsh1t.

Heard a great conspiracy theory that it was interesting that the current government have "encouraged" people to fill their tanks with fuel, & therefore spend lots in the last 2-3 days of Q1 of 2012, in the aim of keeping us out of official recession.

Whilst undoubtedly boolsheet, it made me chuckle.

In other news, the notion of austerity being a cause of things being bad isn't quite right. Yes there have been cuts. However these cuts have only amounted to 12% of the total of planned cuts! This is going to be spending on things such as infrastructure (see balfour beatty & their recent statements). Because many know more cuts are on the way, both from personal and professional perspectives, confidence is nearly shot...

Where is growth going to come from? I can't see anything causing growth at the moment...

HAMISH_MCTAVISH

lemonjelly wrote: »

Where is growth going to come from? I can't see anything causing growth at the moment...

Spending causes economic growth. There is no other possible cause.

Kickstart spending and you kickstart growth.

For as long as spending remains constrained, then growth will be too.

Itismehonest

Yes, I agree that spending is the problem.

I don't know about the 30s but, in the more recent recessions, interest rates remained at a much higher level. Where this, obviously, caused repossessions etc. it left savers with money to spend.

During the recession of the early 90s we were in the tourism business & "the recession years" were actually among the best. People were taking many more holidays & short breaks. They came & spent money which meant businesses & staff in this area had money to spend, too.
The extended period of low interest rates this time may have helped homeowners &, presumably, what exporters we have left but they certainly haven't helped most people have ready cash to spare.

HAMISH_MCTAVISH

Generali wrote: »

Lots of people seem fixated on 'solving the problem' but that is to misunderstand (IMHO) where we are.

The deleveraging process is well underway, and just like after every other recession in modern history, it will continue for a good few years yet. The average is 7 years from memory, but it usually doesn't start for 18 months or so after the crisis begins. By my reckoning we're around 40% of the way through the process.

That it is happening and will continue to happen is beyond debate.

And to the extent that deleveraging on some level is necessary, then current levels of economic or asset price stagnation are not "kicking the can" or "failing to solve the problem", they are instead a clear signal that the underlying problem is indeed being fixed.

The real argument lies around the pace and trajectory.

Well of course it's all the fault of the Tories and their austerity right? Ermm, think again

Posen would disagree.....

http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech560.pdf

michaels

So gdp was artificially inflated by 6% by borrowing to consume. In that case surely we should reset benefits to the level they were when gdp was last at current levels as otherwise those on benefits are relatively better off with all the consequences in terms of reduced incentives that produces.

I think I was the first person on the bbc hys to mention the gdp pull forward conspiracy theory - apologies.

Wookster

HAMISH_MCTAVISH wrote: »

Spending causes economic growth. There is no other possible cause.

Kickstart spending and you kickstart growth.

For as long as spending remains constrained, then growth will be too.

It appears you cannot do basic arithmetic. Spending is enormously depressed because everyone is paying off debt, especially mortgages on historically expensive houses (relative to earnings).

Itismehonest

Wookster wrote: »

It appears you cannot do basic arithmetic. Spending is enormously depressed because everyone is paying off debt, especially mortgages on historically expensive houses (relative to earnings).

Yet many are paying off mortgages early or re-mortgaging for BTL?
Some poor souls are in negative equity but many certainly aren't.
Some don't have mortgages.
It's more complex than paying off debt, I think. Even many of those without debts have no spare cash to spend.