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Iod Says Uk Economic Growth Will Fall Short Of Forecasts

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http://www.telegraph.co.uk/finance/economics/8135507/IoD-says-UK-economic-growth-will-fall-short-of-forecasts.html

Cutting its growth expectations for 2011 from 1.8pc, the influential trade body said that while "too much doom and gloom" surrounds the austerity measures in the Spending Review, there needs to be "greater realism" about weaknesses in the economy.

It believes the recovery is taking the shape of a "square root sign", representing an uptick followed by flatter growth. If its analysis is correct, the IoD warned that the Chancellor may have to make more cuts or raise taxes to reduce the deficit as planned.

The institute said the robust expansion seen in the second and third quarters of this year is a temporary growth spurt that is set to level off in the face of the fiscal squeeze and households reducing their debt. The IoD's prediction undercuts the roughly 3pc growth the Bank of England has forecast for the next couple of years, as well as the 2.3pc rate the Office for Budget Responsibility (OBR) expects for 2011.

So if there needs to be realism about growth there also has to be realism about tax revenues....

Still I'm sure the deficit will be contained...

Edited by interestrateripoff

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The square root recovery. Because the square root of ****** all has been fixed.

Inflation is biting, it will wipe out demand from the prudent as surely as debt finally clobbered demand from the financial drunkards. Neat trick if they could get both sides equally in the shit, now that really would be something.

Edited by OnlyMe

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http://www.telegraph.co.uk/finance/economics/8135507/IoD-says-UK-economic-growth-will-fall-short-of-forecasts.html

So if there needs to be realism about growth there also has to be realism about tax revenues....

Still I'm sure the deficit will be contained...

Well my prediction is with that of the IOD. Growth will continue to lag government expectations, tax revenues will be down, benefits paid will be higher than expected, and the deficit will grow.

Just how long the bond market will put up with this is anyone's guess.

I just hope that the government have a real plan in their back pockets to put into operation when interest rates rise. Then they are going to have to make the necessary cuts. (Big Clue here government, the real savings are on public sector salaries and pensions, and pension welfare. And dont forget to axe SMI this time too).

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NOBODY who wants to keep borrowing to keep their business afloat will EVER predict a slow in sales.

Its likely to make their banker barf into the Champagne and Canapes.

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I think anytime any group speaks they it should actually have to be explained who they are:

For example - Institute of Directors (a group representing anyone who has registered a business and has enough time not to actually be running it), Demos/Policy Exchange/Tax Payers Alliance (members of political parties who dress up dogma as research and change their name so it looks independent)

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hmm... so instead of the 81bn cuts we should have 100bn cuts? I suspect that won't happen just yet... I think that will be left for the next government to tackle.. i.e. Labour/ Conservative government.

Its interesting to see what growth figures are like over the next 2 years when we see huge cuts to all the public sector areas. I suspect we will see the big society get a clobbering too...

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They need to SLASH TAXES to get growth going again.

AND cut government spending to at least match the tax take....yes?

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I heard Burberry wants to close it's English factories and make it all in China.

Even the luxury brands are fleeing.

There will be no growth until manufacturing returns , this so called growth is just more debt and inflation.

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I heard Burberry wants to close it's English factories and make it all in China.

Even the luxury brands are fleeing.

There will be no growth until manufacturing returns , this so called growth is just more debt and inflation.

As everyone is chasing low wage economies clearly there is only one way to bring manufacturing back.

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Are they only looking at GDP without happiness?

Just imagine when we have happiness included in GDP - news like today about a royal wedding would send it through the roof. HPCers must all be walking around with a smile on their face? Then on the actual day of the wedding it would surge again.

In 1991, the author Michael Frayn wrote a book, A Landing on the Sun, about a British prime minister who tasked his advisers with looking into happiness and what the government could do to promote it. The prize proved elusive, the adviser went mad and died.

Despite the fable, politicians aren't so gloomy about the prospect of knowing what makes us happy – but substitute "happy" with the compound noun "wellbeing". So much so that David Cameron is trying to get the concept up and running even in the midst of public service cuts and soaring living costs.

He is sticking to a policy commitment he made before the economic crash when growth figures were still rosy. He said: "It's time we admitted that there's more to life than money and it's time we focused not just on GDP but on GWB – general wellbeing."

Speaking at the Google Zeitgeist Europe conference, he added: "Wellbeing can't be measured by money or traded in markets. It's about the beauty of our surroundings, the quality of our culture and, above all, the strength of our relationships. Improving our society's sense of wellbeing is, I believe, the central political challenge of our times."

Our times, and previous ones too. Aristotle talked about "eudaimonia" – happiness as human flourishing and purpose to life – rather than the modern hedonistic concept. John Maynard Keynes talked about the "art of life" in 1930, and in 1968 Bobby Kennedy told a student audience in Kansas: "We cannot measure national spirit by the Dow Jones average, nor national achievement by the gross domestic product."

A few years later, psychologist Richard Easterlin showed that after a certain point, rises in national wealth are not matched by increases in happiness.

Right now, in Canada they are able to compare life satisfaction levels between different provinces and see that rich provinces are not the happiest.

The Organisation for Economic Co-operation and Development (OECD) has done a lot of work in the area, but as a politician, French president Nicolas Sarkozy has led the way. One year after the collapse of Lehman Brothers, he launched an inquiry into happiness, commissioning Nobel prize-winning academics Joseph Stiglitz and Amartya Sen to look at how the relentless search for a rise in GDP sometimes trampled over a government's other goals, such as sustainability and work-life balance.

Kennedy raged against the felling of Redwood trees. Now a Downing Street aide says: "GDP doesn't measure lots of things. The BP oil spill was, for instance, associated with activity that increases GDP but we need a measure that would reflect the actual cost of it if things like cleaning up the mess and damage to the environment are factored in.

The government is not about to scrap the concept of GDP, but will instead supplement it with a more sensitive set of data about the parts of the UK GDP doesn't reach. Setting the new questions will be up to the independent chief statistician, Jil Matheson.

....

Questions used by the independent national statistician are likely to focus on "evaluation", "experience" and "purpose" and could include:

1 How satisfied are you with your life these days, on a scale of 0 to 10 where 0 is "not at all" and 10 is "completely satisfied"?

2 Overall, how happy did you feel yesterday?

3 How much purpose does your life have?

4 Are men and women treated fairly in the workplace and home?

http://www.guardian.co.uk/politics/2010/nov/14/david-cameron-wellbeing-inquiry

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