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C E B R : U K Recession Risk Warning

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http://www.bloomberg.com/news/2011-01-14/u-k-economy-has-20-chance-of-slipping-back-into-a-recession-cebr-says.html

U.K. Economy Faces 20% Risk of Slipping Back Into a Recession, CEBR Says
By Jennifer "Jeni" Ryan - Jan 14, 2011 12:05 AM GMT
The U.K. economy faces a 20 percent chance of slipping into another recession as rising unemployment and faster inflation weigh on growth, the Centre for Economics and Business Research said.
The U.K. economy will grow 1.1 percent this year, the London-based research group said in an e-mailed statement today, revising an October forecast for expansion of 1.3 percent. The lower pace of growth raises the risk of a second slump from an earlier assessment of 10 percent, it said.
The revision is due to “persistently weak labor-market indicators and large rises in consumer prices,” said Scott Corfe, an economist at the CEBR. “It is difficult to see where significant growth will come from given that domestic demand is likely to be weak.”
The CEBR said the Bank of England will probably have to expand bond purchases, though doing so will depend on a drop in the inflation rate, which at 3.3 percent in November was above the government’s upper limit. The central bank yesterday held its bond plan at 200 billion pounds ($317 billion) and its benchmark interest rate at a record low of 0.5 percent.

80% chance of NOT going into recession given all the negative going on at the moment. I do not think so. Too much optimism will lead to greater levels of unexpected bad news.

All good fodder for a massive HPC this year.

Edited by Realistbear

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http://www.bloomberg.com/news/2011-01-14/u-k-economy-has-20-chance-of-slipping-back-into-a-recession-cebr-says.html

U.K. Economy Faces 20% Risk of Slipping Back Into a Recession, CEBR Says
By Jennifer "Jeni" Ryan - Jan 14, 2011 12:05 AM GMT
The U.K. economy faces a 20 percent chance of slipping into another recession as rising unemployment and faster inflation weigh on growth, the Centre for Economics and Business Research said.
The U.K. economy will grow 1.1 percent this year, the London-based research group said in an e-mailed statement today, revising an October forecast for expansion of 1.3 percent. The lower pace of growth raises the risk of a second slump from an earlier assessment of 10 percent, it said.
The revision is due to “persistently weak labor-market indicators and large rises in consumer prices,” said Scott Corfe, an economist at the CEBR. “It is difficult to see where significant growth will come from given that domestic demand is likely to be weak.”
The CEBR said the Bank of England will probably have to expand bond purchases, though doing so will depend on a drop in the inflation rate, which at 3.3 percent in November was above the government’s upper limit. The central bank yesterday held its bond plan at 200 billion pounds ($317 billion) and its benchmark interest rate at a record low of 0.5 percent.

80% chance of NOT going into recession given all the negative going on at the moment. I do not think so. Too much optimism will lead to greater levels of unexpected bad news.

All good fodder for a massive HPC this year.

Have we ever really left a recession? Gordans spending bonanza temporarily halted it but in the real world?

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Have we ever really left a recession? Gordans spending bonanza temporarily halted it but in the real world?

While everyone else suffered in the last decade or so UK Plc was seen as a miracle economy. IMO that false economy based on a huge expansion in the non-productive sector including parasitic banksters will have to be paid for in this decade.

As Milton "Uncle Miltie" Friedman warned Gordon before he slipped away to the world beyond--there ain't no free lunch.

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The CEBR said the Bank of England will probably have to expand bond purchases, though doing so will depend on a drop in the inflation rate, which at 3.3 percent in November was above the government’s upper limit. The central bank yesterday held its bond plan at 200 billion pounds ($317 billion) and its benchmark interest rate at a record low of 0.5 percent. [/indent]

Clueless. It stuns me how many economists don't connect bond purchases by the BoE and inflation.

Growth now seems to be dependent on money creation, a pretty dangerous addiction. Will we feed our addiction with further bond purchases (which presumably will have to increase in scope to create further "growth") and inflation? Everything says yes, I think.

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  • 311 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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