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City Taken By Surprise As Bank Of England’s Figures Herald End Of Recession

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http://business.timesonline.co.uk/tol/busi...icle6802722.ece

Britain has emerged from the worst recession since the Second World War, new Bank of England figures suggested yesterday (see Commentary, facing page).

Detailed forecasts published by the Bank showed that gross domestic product (GDP) will rise by 0.2 per cent between July and September, marking the first economic expansion since the first three months of last year. The Bank expects the economy to continue to expand in the fourth quarter, by 0.4 per cent, and sustain the recovery throughout next year.

These growth figures have been extrapolated by economists from data published by the Bank in the wake of last week’s Inflation Report. The Bank expects the economy to grow by 2.2 per cent next year, its central forecast shows. That is greater than the Treasury’s forecast of 1.75 per cent, which is seen as extremely optimistic by City analysts, who expect the economy to grow by only 0.8 per cent.

Even taking into account the downside risks to growth, the Bank still expects Britain to grow by 1.3 per cent next year. The economy has been shrinking for the past 15 months and is believed to have contracted by as much as 5.6 per cent over that time.

The upbeat forecasts take into account last week’s surprise £50 billion boost to the economy announced by the Bank’s rate-setting Monetary Policy Committee (MPC). It emerged yesterday that Mervyn King, the Governor, and two other members of the committee favoured injecting a further £75 billion. They were outvoted by a majority of six, the victors wanting £50 billion extra, taking the total to £175 billion.

Debt is wealth.

Clearly you do fix a debt crisis with more borrowing and funny money.

Why didn't we fix recessions like this before it's so much easier and all this good news just at the conference season is about to start.

Labour good for Britain good for debt.

Rejoice people, rejoice it's all over the recession is over the BoE accurate forecasting model says so and it only took printing free money.

Viva Labour

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http://www.bloomberg.com/apps/news?pid=206...id=aOfi1fTZAFEo

King Changes Tune as Deeper Recession Prompts ‘Activist’ Stance

Aug. 20 (Bloomberg) -- For the first time in his career, Bank of England Governor Mervyn King wants a more expansive monetary policy than his colleagues.

King’s push to expand the central bank’s bond-purchase program to 200 billion pounds ($329 billion) was overruled by the Monetary Policy Committee, minutes of their Aug. 6 meeting published yesterday showed. On the 14 other occasions that King has lost a vote since the central bank was given rate-setting independence in 1997, he opted for tighter policy every time.

King, who led a global push by central banks to start buying bonds in March, argues that too timid an approach may undermine optimism that Britain is recovering from its worst recession in a generation. The vote for an even looser approach than his colleagues prefer defies King’s image as an advocate of tight monetary policy with a track record of backing interest- rate increases. The pound dropped after yesterday’s report.

“It proves he’s not just a hawk, he’s more of an activist,†said George Buckley, an economist at Deutsche Bank AG in London. “He’s not afraid to vote against the rest of the committee if he thinks it’s the right thing to do.â€

The MPC voted 6-3 to increase bond purchases by 50 billion pounds to 175 billion pounds, the minutes showed. King was joined by Timothy Besley and David Miles in voting for an increase of 75 billion pounds. All nine opted to keep the benchmark interest rate at a record low of 0.5 percent.

‘Less Severe’

The pound weakened against all of the 16 most-traded currencies tracked by Bloomberg after the report. The danger from doing too much stimulus is “less severe†than the cost of being too cautious, the minutes said.

The pound fell as much as 0.8 percent against the dollar before rebounding later in the day.

“The bank is clearly taking the view that the recovery isn’t very sustainable,†said Jamie Dannhauser, an economist at Lombard Street Research Ltd. in London. “There’s very little damage that can come from doing too much stimulus.†:o

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Guest sillybear2

debt = wealth

spending = investment

inflation = growth

Edited by sillybear2

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Detailed forecasts published by the Bank showed that gross domestic product (GDP) will rise by 0.2 per cent between July and September, marking the first economic expansion since the first three months of last year. The Bank expects the economy to continue to expand in the fourth quarter, by 0.4 per cent, and sustain the recovery throughout next year.

These growth figures have been extrapolated by economists from data published by the Bank in the wake of last week’s Inflation Report. The Bank expects the economy to grow by 2.2 per cent next year, its central forecast shows.

my bold

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“The bank is clearly taking the view that the recovery isn’t very sustainable,†said Jamie Dannhauser, an economist at Lombard Street Research Ltd. in London. “There’s very little damage that can come from doing too much stimulus.†:o

You just lack the nulabour doublethink ability.

Once you have mastered this skill you will see the above to be true.

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The only thing he's done is turn a short, very sharp recession/correction into a long drawn out depression for most people.

But that was the intention... as long as enough people believe things are OK up until the date of the next General Election, the plan has worked.

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http://business.timesonline.co.uk/tol/busi...icle6802722.ece

Debt is wealth.

Clearly you do fix a debt crisis with more borrowing and funny money.

Why didn't we fix recessions like this before it's so much easier and all this good news just at the conference season is about to start.

Labour good for Britain good for debt.

Rejoice people, rejoice it's all over the recession is over the BoE accurate forecasting model says so and it only took printing free money.

Viva Labour

Seems strange when it was only last week that Merv declared Recession Will be the Worst in Modern History

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Guest KingCharles1st

"In other news today, a man from North Hertfordshire was laughing so hard at something he read on the internet, he ruptured his spleen and had to be flown by air ambulance to Hospital. Unfortunately the cost of this mercy mission to the NHS has all but wiped out the small growth in the U.K. economy as reported earlier this week."

F F S!

The only way this economy will ever genuinely grow is by KILLING THE ABILITY TO GET INTO DEBT!!!

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The only thing he's done is turn a short, very sharp recession/correction into a long drawn out depression for most people.

But that was the intention... as long as enough people believe things are OK up until the date of the next General Election, the plan has worked.

thought you were in the 'it's just a recession camp' ?

when did you change to acknowledging it's a depression ?

so many posters slipping in 'well we knew all along it was going to be a depression' type posts, when the 2 years previous they have been arguing, stating that it's not that bad & sterling is strong. ;)

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wow, the Economists have finally caught on...they've discovered government spending affects GDP...oh yes, it does....and look, Government spending is at an all time high.....and look, doesnt matter how bad the economy, they can spend a little more to put the GDP thing positive...only costs a few billion, and wow, its like winning the World Cup.

GDP is now a very discredited measure.

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“There’s very little damage that can come from doing too much stimulus.â€

That's funny, I thought it could make you go blind.

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gross domestic product (GDP) will rise by 0.2 per cent between July and September

Hang on! Is it just me, or have we seen that 0.2 per cent figure before? (clue: headline claiming France, Germany coming out of recession). Just co-incidence?

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If you factor in totally unsustainable government spending. Fantastic! At least we are growing on our way to bankruptcy and default.

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They can't get away with it, surely?

Then again they did for a decade with a mix of consumer (MEWing/credit cards) and government debt driven consumption allowing the boast of 60 (?) quarters of continuous GDP growth.

Please, media peeps, this illusion has to be exposed. The lies and the smoke and mirrors cannot go on.

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Printing 9% of GDP and borrowing 12% of GDP - for a 0.2% uptick?

Fail, as they say.

Quite so.

This is the equivalent of a scrap yard owner getting stock by buying new cars from a showroom on borrowed money and claiming his scrapyard is profitable because he is selling a lot of scrap.

I have seen it done by mobile phone companies and media groups prior to IPO to boost stock price too. They virtually give phones and subscriptions away to boost subsciber numbers on which company value is based. Three weeks after the IPO the new subscriptions are all cancelled.

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