I don't belive it... I still don't believe it!

Graham_Devon

Article on thisismoney suggests we could be witnessing signs of Stagflation, a disasterous combination of high inflation and static growth.

Figures this week will confirm growth for the first quarter. Many looked at the -0.2% in disbelief, however, it's now believed that actually it could be worse than thought, at -0.3%, with the construction figures not holding up hopes of dragging us to 0% growth (and out of offical recession).

Howard Archer, who suggested the initial figures were treated with caution as they couldn't possibly be right, now suggests this can't possibly be right either.

So....how "bad" is stagflation if that pattern truely emerges, as it seems it is?

http://www.thisismoney.co.uk/money/markets/article-2146829/Latest-figures-expected-growth-price-rises-signs-stagflation.html

Meanwhile, making stagflation probably worse, Mervyn King refused to rule out intervention in the exchange rate, to put a cap on the strength of the pound.

michaels

Anyone would think we had seen a supply side shock in commodities like the 70s...oh no this is completely different, a global financial meltdown...or is it just more of what we have seen before but we are blinkered to think 'our crisis' is much worse than any other 'crisis?!

HAMISH_MCTAVISH

The article is pretty clear Graham.

The construction figures are bad, worse than expected.

Construction is an important part of the economy, and unsurprisingly, that sector is in terrible shape.

That's sort of what you'd expect when house building is at 100 year lows and falling again.

purch

Graham_Devon wrote: »

So....how "bad" is stagflation if that pattern truely emerges, as it seems it is?

Think what the last 3 years have been like.

That's how "bad" it'll be.

Wookster

michaels wrote: »

Anyone would think we had seen a supply side shock in commodities like the 70s...oh no this is completely different, a global financial meltdown...or is it just more of what we have seen before but we are blinkered to think 'our crisis' is much worse than any other 'crisis?!

I think the problem is that rather than letting insolvents go bankrupt, we have bailed them out, creating zombies who are now slaves to servicing debts, unable to consume.

Pobby

Bit of a shame that the construction industry is so important to our wealth. Not against it as we need a lot more homes but homes that people can afford to buy as it was 30 years ago, Exports are pretty good bets, with 40% of our exports going to Europe, I see another storm blowing up if sterling is suddenly much stronger. I think if the pigs default we might see 2 euros to the pound.

Times that are uncertain.

RenovationMan

purch wrote: »

Graham_Devon wrote: »

So....how "bad" is stagflation if that pattern truely emerges, as it seems it is?

Think what the last 3 years have been like.

That's how "bad" it'll be.

Martin_Lewis wrote:

Here are 10 things everyone needs to know about economic downturn.

1. Beware recession scaremongering. Recession reflects what's already happened, it's not a prediction. So the announcement we're now in one doesn't change a thing. Unlike past recessions when things plummeted, this time the economy's flatlined for years, so it's likely to be more of the same.
   
   So focus on your circumstances. If you've a stable job in a strong company, little's changed. If redundancy looms, preparation's crucial. If you're on benefits or unemployed, it's about continuing the struggle.

As purch and Martin say, the announcements we hear now don't change a thing. Just ignore the scaremongers and get on with your life.