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Britain Is Heading Out Of Recession, Says Influential Think-tank Niesr

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http://business.timesonline.co.uk/tol/busi...icle6472439.ece

The recession was declared over by the country’s leading economics think-tank yesterday after it released upbeat estimates showing that growth in GDP resumed in April and May.

The upbeat verdict that Britain’s slump is at an end came from the National Institute of Economic and Social Research after official figures revealed the first gains in manufacturing output for 14 months, adding to a recent spate of signs of recovery.

Estimates of the economy’s overall performance by the institute, based on the manufacturing figures, indicated that GDP bottomed out in March and began to rise again in April and May.

Martin Weale, the institute’s director, said he believed that the recession was now over “as far as I can tellâ€.

“There has been much less downward momentum than we expected,†he added.

The institute’s projections, which have proved highly accurate in the past, chime with the conclusion of a growing number of City economists who now predict that the recession will end in the coming quarter, with some arguing it is already over.

Official GDP data for the present quarter (Q2) will not be published until July 24, and the City will judge the recession to have ended, at least temporarily, if these confirm growth.

Mr Weale stopped short of forecasting that this formal confirmation will appear, however.

He said that since official figures are worked out on a quarterly average, rather than on a monthly basis, they would probably show only that the economy stagnated, with zero growth.

The formal end to recession would then only come in the third quarter as a clear rise in GDP emerged, but the institute said that this made little difference in practice. “The monthly figures are inevitably erratic but the picture is coherent with the broader picture of stabilisation which has emerged since we first suggested that the output (GDP) had stopped falling on 13 May,†it reported.

If the institute is proved right, then the present recession will have seen the economy shrink by about 5 per cent since it began last May and ended in March. This would make it more severe than the early Nineties recession but less severe than that of the early Eighties.

Many economists still fear, however, that recovery could founder and give way to a “double dip†downturn.

So there we have an expert view from a group that probably didn't predict the crash and yet they have accurately confirmed that we have probably come to the end of the recession.

Vote Brown.

He saved the world.

Yet more flawless economic analysis.

10% yoy growth of house prices is just around the corner.

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http://business.timesonline.co.uk/tol/busi...icle6472439.ece

So there we have an expert view from a group that probably didn't predict the crash and yet they have accurately confirmed that we have probably come to the end of the recession.

Vote Brown.

He saved the world.

Yet more flawless economic analysis.

10% yoy growth of house prices is just around the corner.

well of course, some of our top manufacturers are starting production again...the car makers....how long they will continue to replenish unsold stocks though is a mute point .

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well of course, some of our top manufacturers are starting production again...the car makers....how long they will continue to replenish unsold stocks though is a mute point .

Exactly, even if Honda produces 10 cars in numbers terms the growth from the previous month would 1000%, 100 cars would be a 10000% increase over the previous month.

The boom time is back.

The stats don't lie.

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Guest UK Debt Slave
http://business.timesonline.co.uk/tol/busi...icle6472439.ece

So there we have an expert view from a group that probably didn't predict the crash and yet they have accurately confirmed that we have probably come to the end of the recession.

Vote Brown.

He saved the world.

Yet more flawless economic analysis.

10% yoy growth of house prices is just around the corner.

Total insanity

I was chatting with an estate agent friend last night and he says their turnover has gone through the roof in the last 3 months.

Even he doesn't believe it's real. He says he absolutely astonished that it all seems to be starting all over again.

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Does the general public really believe these headlines? Yes, probably they do, they don;t spend all their time here on HPC scrutinising the fundamentals of economy. But surely everyone can see that our 12 year exponential growth was funded by credit......don't they???

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http://business.timesonline.co.uk/tol/busi...icle6472439.ece

So there we have an expert view from a group that probably didn't predict the crash and yet they have accurately confirmed that we have probably come to the end of the recession.

Vote Brown.

He saved the world.

Yet more flawless economic analysis.

10% yoy growth of house prices is just around the corner.

In a completely unrelated event Gordon Brown announced that Mr Weale would be becoming Lord Weale and joining him in the cabinet as minister for research. Gordon Brown said in a statement... Lord Weale has an uncanny knack for reading the figures that come through from research. His research often backs up what I say so its only right that he should now be recognised....... In a new twist the police have said they are looking at new case of peerage fraud... this time its research results for peerages

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Total insanity

I was chatting with an estate agent friend last night and he says their turnover has gone through the roof in the last 3 months.

Even he doesn't believe it's real. He says he absolutely astonished that it all seems to be starting all over again.

It really makes you want to move out of this crazy place doesn't it. (or not logging on here whenever I have a spare few minutes. HPC simultaniously manages to makes you feel empowered, smug and utterly p1ssed off with everyone and everything).

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It's all OK interest rates will stay low; so why is Santander abbey offering 4% on a 2 year savings bond? Is it because they want to offer their customers an amazing deal? If they do then they are probably the nices bank on the high street. ;)

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Why do so many bears here want to see a depression? Just so they can say I told you so?

I want growth it's good for everyone! including bears!

You're funny. :D

I don't want a depression but the more we spend and spend the liklier it became and the tipping point for me was a secretary on no more than 18K a year getting a mortgage for £180K, not sustainable.

We will soon reap the whirlwind of such lax lending practices.

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You're funny. :D

I don't want a depression but the more we spend and spend the liklier it became and the tipping point for me was a secretary on no more than 18K a year getting a mortgage for £180K, not sustainable.

We will soon reap the whirlwind of such lax lending practices.

Hopefully she will pay it off may have to stuggle but I hope she manages!

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15300931.jpg

woah, the Daily Independent Express is having a funny turn.

well lets hope they're right, though try telling this to the cheltenham & gloucester employees at al.

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Out of recession into stagflation and worse.

http://www.crainsmanchesterbusiness.co.uk/.../906119981/1048

KPMG to lay off tax staff

Big Four accountancy firm KPMG is to cut more than 250 jobs, despite its efforts to reduce costs by introducing a four-day working week. Staff have been informed by e-mail that it was in redundancy talks within its UK tax practice, the department most affected by the economic downturn because of a drop-off in demand for tax advice relating to corporate transactions.

http://www.scarborougheveningnews.co.uk/ne...-axe.5355971.jp

250 workers face the axe - COMMENT ON THIS STORY

AS MANY as 250 jobs could be lost at a major Scarborough factory.

Atlas Ward Structures, one of the largest structural contractors in the UK, has already begun consultation with workers.

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Listened to 5Live this am and Verity, who I thought had a bit more about him was gushing about how the doom and gloom merchants were wrong about a depression.

As mentioned above, the people who predicted the crisis are the ones that should be listened to, not those that were clueless then, as they are clueless now.

I am watching the gilts thread myself. :ph34r:

Edit to add: I don't normally listen to 5live apart from the sport, and have stopped again. :angry:

Edited by bobthe~

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This is all so completely and utterly bonkers it defies belief.

Is it the insularity of the British that makes them fail to see the global picture?

Where's the growth coming from when all our trading partners are suffering? Nail bars and tanning salons?

A massive wave of borrowed money has hit the economy - it won't last; neither will the devaluation effect last - we're all 20% poorer against a trade-weighted basket of currencies.

ED: typo

Edited by yellerKat

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Why do so many bears here want to see a depression? Just so they can say I told you so?

I want growth it's good for everyone! including bears!

I would like to see a recovery too. I don't like having to consider that we won't be as comfortable as we have been accustomed to. However, we have an economy based on consumption, which has been based on credit. Too much credit, caused people (and companies) to take on more debt than they could cope with. This problem is still present and it is the elephant in the room which many seem to ignore.

Solutions? What solutions? That is the problem. The debt has to be repaid before more can be borrowed. Even if the banks gave out more loans, it would be giving people more debt, when they are struggling to repay what they have already. Government borrowing and printing money to give to the banks, to loan dangerously can only last for so long - it may prevent precipitous falls in the economy, but for how long?

Can we keep printing? No - it leads to nasty hyperinflation. Can we keep borrowing? Not if we want to keep the cost of credit down, as the (real/market) interest rates are creeping up in response. More printing leads to the same problem. All avenues lead to higher interest rates, which leads to less borrowing, consumption, business struggling in response and so on.

We have been living on borrowed time and we still are. Our growth has been fuelled by cheap credit and it now has to be repaid, or at the very least, no more can be borrowed - the end of credit fuelled growth.

So, how can we possibly think it will be business back to usual? How can the above all have been solved with growth returning? The bigger picture is ugly and it is what makes this faux recovery so obvious IMO.

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Can someone just tell me whether they mean REAL growth, or inflationary growth?

Are their figures adjusted for inflation? If not, they are meaningless.

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National Institute Economic Review

UK Economy Forecast

Wednesday, 6th May, 2009

http://www.niesr.ac.uk/pubs/searchdetail.p...licationID=2246

The economy will shrink by 4.3 per cent this year, and then experience a weak recovery, with GDP rising by 0.9 per cent in 2010.
The unemployment rate will peak at 9.6 per cent in 2011.
Consumer spending will fall by 3.7 per cent this year and a further 1.1 per cent in 2010.
The recovery will be driven by net trade, which will contribute 1.2 per cent to GDP growth in both 2010 and 2011.
The medium-term outlook for government finances is grim, with public sector net borrowing forecast at 8.6 per cent of GDP in 2013-14.
The recession is on track to become the most serious since the 1930s as GDP declines by 4.3 per cent in 2009
. There is a real possibility that GDP will fall more this year than in 1931. The pace of decline to date shows a remarkable resemblance to that of the depression of the early 1930s, though that similarity should be broken as a feeble recovery gets under way in the final quarter of this year. The economy will expand by 0.9 per cent in 2010, picking up to 2.3 per cent in 2011. Unemployment will carry on rising to a peak of 3.1m people – 9.6 per cent of the labour force in 2011. This year’s severe contraction is being driven by falling consumer spending and investment. Private consumption will drop by 3.7 per cent this year mainly because of a sharp rise in the saving ratio, from 1.9 per cent of disposable income in 2008 to 6.5 per cent in 2009. Business investment will fall by 10.3 per cent, private housing investment by 23.3 per cent and a vicious rundown in inventories will contribute 1 percentage point to the overall 4.3 per cent fall in GDP. The recovery in 2010 and 2011 will depend heavily on net trade, supported by a lower pound, as increases in exports outpace those of imports. Growth will be weak in 2010 as consumer spending falls further, by 1.1 per cent, and business investment also declines again, by 8.1 per cent. In 2011, the recovery picks up momentum as consumer spending rises by 1.3 per cent. The outlook for the public finances during the recovery is even worse than the Chancellor set out in the Budget because nominal GDP will rise less than he expects as both real growth and inflation turn out to be lower. Since
money GDP is in effect the tax base, revenues will be smaller than the Treasury is projecting. Public sector net borrowing will thus fall only gradually to 8.6 per cent of GDP in 2013–14 compared with the Treasury’s forecast of 5.5 per cent. Further spending cuts and tax increases will be required to put the public finances on a sustainable footing.
The policy of quantitative easing could be made more effective if the Bank of England revived the market for private bills of exchange, a short-term form of commercial finance, by saying that it was prepared to purchase them. This would directly help businesses unable to get credit at present as well as increasing the monetary base.

-----------------------------------

August 2007 Estimates of Monthly GDP

Our latest estimate suggests that the growth rate of the economy slowed slightly in the three months ending in August to 0.7% after 0.8% in the quarter ending in July. We expect to see a further slight deceleration in the rest of this year as recent interest rates start to bite. However, at present there is no reason to expect any significant impact on the economy arising from the problems that credit markets are facing.

http://www.niesr.ac.uk/pubs/searchdetail.p...licationID=1709

Edited by enrieb

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National Institute Economic Review

UK Economy Forecast

[snip]

Oh well found, Sir/Madam. That does rather put them in their place.

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15300931.jpg

If you read the paper, the columnists are using the phrase "apparent recovery". They do warn it is easy for UK to slip back into recession, and not to expect a rebound into a boom, more over, a limping along type recovery.

Inside the physical paper, there is graph of how past recessions compared to now. The 80s and 70s recessions had false bottoms.

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