Almost there! Unemployment hits 7.1%

Masomnia

Labour will still argue that people are poorer than they were in 2010, probably rightly.

I guess the point is that things are improving, and it'll come down to whether people think things will improve faster under Labour.

mayonnaise

lvader wrote: »

Even debt (as a % of GDP) has fallen,

That's not really correct, is it?

Masomnia

mayonnaise wrote: »

That's not really correct, is it?

According to the BBC it is. It puzzled me too. I skimmed through the ONS release but couldn't see anything about it.

antrobus

Masomnia wrote: »

According to the BBC it is. It puzzled me too. I skimmed through the ONS release but couldn't see anything about it.

What kind of debt?

Household debt is certainly falling as a percentage of GDP. It's possible that public sector debt might be as well. People sometimes forget that GDP is reported in real terms whilst debt is (mostly) nominal.

Masomnia

IIRC it was public sector net debt as % of GDP. Implies to me that growth is now outpacing borrowing, which sounded unlikely!

antrobus

Masomnia wrote: »

IIRC it was public sector net debt as % of GDP. Implies to me that growth is now outpacing borrowing, which sounded unlikely!

Public sector net debt excluding temporary effects of financial interventions (PSND ex) was £1,231.7 billion at the end of November 2013, equivalent to 76.6% of gross domestic product (GDP).

http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/november-2013/stb---november-2013.html

Public sector net debt excluding temporary effects of financial interventions (PSND ex) was £1,254.3 billion at the end of December 2013, equivalent to 75.7% of gross domestic product (GDP).

http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/december-2013/stb---december-2013.html

CLAPTON

antrobus wrote: »

Public sector net debt excluding temporary effects of financial interventions (PSND ex) was £1,231.7 billion at the end of November 2013, equivalent to 76.6% of gross domestic product (GDP).

http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/november-2013/stb---november-2013.html

Public sector net debt excluding temporary effects of financial interventions (PSND ex) was £1,254.3 billion at the end of December 2013, equivalent to 75.7% of gross domestic product (GDP).

http://www.ons.gov.uk/ons/rel/psa/public-sector-finances/december-2013/stb---december-2013.html

which means that gdp increased from 1607.96 to 1656.93 in one month which is about 3%

if this monthly increased were maintained then that would give us a 36% increase in the next 12 months

maybe seasonal xmas effect

MFW_ASAP

In my experience, interest rates rise (AKA tightening monetary policy) because the economy is overheating/booming and the BoE/government want to cool things down. This certainly isn't the case at the moment.

So, can someone please explain why interest rates need to rise? I mean in purely economic terms not in forumnomics "because I think rates are too low" terms.

antrobus

CLAPTON wrote: »

which means that gdp increased from 1607.96 to 1656.93 in one month which is about 3%

if this monthly increased were maintained then that would give us a 36% increase in the next 12 months

maybe seasonal xmas effect

I wouldn't get excited about it. It's just one month. PSND as a % of GDP is still higher now, than it was at the end of the last financial year.

MFW_ASAP wrote: »

....So, can someone please explain why interest rates need to rise? ....

To increase savings and help rebalance the economy so that it is driven more by investment rather than consumption?

MFW_ASAP

antrobus wrote: »

To increase savings and help rebalance the economy so that it is driven more by investment rather than consumption?

Cash savings aren't investments. If we want people to invest in companies, and therefore invest in the economy, far better to keep savings rates low so that people invest in shares and corporate bonds to get higher returns - investing directly in the companies.

Note: this is exactly what is happening - more people are investing in shares, chasing better returns than offered by savings accounts, than ever before.