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Bank's Posen Sees Risk Of Renewed Recession

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http://www.nebusiness.co.uk/business-news/latest-business-news/2010/07/12/uk-may-return-to-recession-says-mpc-s-posen-51140-26837107/

THERE is a "chance" the country may fall back into recession, says one of the country’s leading financial decision-makers on a visit to the North East today.

Bank of England Monetary Policy Committee member Adam Posen also said the banks need to be broken up so businesses can get the capital to begin investing and growing.

And he went on to say he had been left disappointed by the UK’s recent export performance, as he arrived in Newcastle for a two-day North East visit today.

Mr Posen, who has been on the MPC for little over a year, said: "There is a chance we could slip back into recession. I hope it is not the case.

"There is going to be a lot of drag on the economy, with the problems of the eurozone and the public sector contraction in the UK.

"However, the recovery has been under way for almost a year, although it has been slow. We hope it will continue but it cannot be guaranteed."

He went on to say new regulatory tools are needed to prevent a repeat of the recent property asset price bubble, which was at the heart of the global financial crisis.

He added: "Light touch regulation did not work. We all messed up."

He repeated his calls for a cyclical real estate tax which would be designed to take the steam out of the property market if it began to overheat.

With the coalition highlighting exports has been one of the key drivers of the country’s future economic performance, he said he had been left "disappointed" by our recent overseas trade performance.

"There is room to do more," he said. "The eurozone is our major trading partner but we need to look elsewhere. The BRIC (Brazil, Russia, India and China) countries are on an amazing course and will continue to be at the forefront of global economic growth.

"This is good news for the UK. We need to look at shifting our over-reliance on the US and the eurozone to the emerging economies."

Read more in tomorrow's Journal

I wonder what more exciting insights there will be tomorrow.

Is the ground work being laid for yet more QE to be given to the bankers?

It's almost comical him talking about the "recovery" which has been "slow" and yet he fails to mention it is purely down to govt deficit spending.

Still he's a highly paid expert so he knows what he's doing.

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http://www.telegraph.co.uk/finance/economics/7885727/GDP-figures-UK-would-still-be-in-recession-without-Government-spending.html

It also confirmed that GDP grew by 0.3 per cent during the first three months of this year, a slight dip on the 0.4 per cent of growth in the last four months of last year.

However, the figures for the first quarter, revealed the economy was worryingly reliant on Government spending, while consumers had stopped spending.

There was a 1.5 per cent rise in Government spending, adding 0.4 per cent to the total growth figures. Meanwhile, household expenditure actually fell by 0.1 per cent. The ONS said the fall in household expenditure was particularly marked in transport, culture and recreation – suggesting people had cut back on flying, holidays and trips to the cinema.

This means that without Government spending on the NHS and social services, the economy would have technically been back in a recession during the first three months of the year.

Economists warned that with the Treasury planning severe public sector cuts, and families appearing to tighten their belts like never before, the economy was in a perilous position. Brenden Barber, the TUC general secretary, said that spending cuts were "the worst medicine possible for a sickly patient".

Still it's contained...

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Yes, and yes. The question is, August or November? I think November to coincide with the US.

Is the ground work being laid for yet more QE to be given to the bankers?

Still he's a highly paid expert so he knows what he's doing.

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http://www.nebusines...51140-26837107/

I wonder what more exciting insights there will be tomorrow.

Is the ground work being laid for yet more QE to be given to the bankers?

It's almost comical him talking about the "recovery" which has been "slow" and yet he fails to mention it is purely down to govt deficit spending.

Still he's a highly paid expert so he knows what he's doing.

Time to shut down the banks and lend direct to industry.  The banks are rubbish at building wealth, all they ever do is scream for more paper tokens to cover their bad investments. They are incapable of creating wealth, and do nothing more than collect money tokens that devalue the real wealth in the economy.

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  • 258 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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