Pent Up Posted March 18, 2011 Share Posted March 18, 2011 (edited) UK consumer confidence crashes to record low The Chancellor suffered a setback ahead of next week's Budget, as leading surveys showed consumer confidence has hit a record low while Britons' expectations for climbing prices have reached their highest in more than two years. Nationwide said its closely-watched confidence index last month nosedived to its lowest level since records began in May 2004, meaning sentiment was at a lower ebb than during the recession. Meanwhile, the Bank of England's quarterly survey showed Britons now expect inflation to be 4pc over the next year, the highest rate predicted since August 2008. The findings pile pressure on George Osborne to come up with some feel-good policies to calm fears that the hard-hit consumer could prove the weak link in the UK's recovery, particularly since the Government's austerity onslaught has yet to be felt in full. Nationwide said its index tumbled 10 points on the previous month to a reading of just 38, as consumers reacted to the shock news that the economy shrank 0.6pc at the end of last year. Economists had expected the index to come in similar to last month's 48 reading, still well below the 100 levels regularly seen before the financial crisis. "Unfortunately, the recovery has been sluggish by historic standards," said Robert Gardner, the lender's chief economist. "It is likely that consumers are coming round to the view that the economy faces a slow grind higher rather than a quick return to form." The results confirmed the gloomy picture painted by the rival index from market research group GfK NOP, which in January saw its biggest drop in almost 20 years and has so far failed to bounce back. The danger is if consumers have little faith that their jobs are safe and the economy will keep growing, they will rein in their spending, hurting growth. High inflation, currently double the target at 4pc and expected to rise further, is aggravating households' worries about their finances. More than half (55pc) of those polled by the Bank of England said they would react to their higher inflation expectations by cutting spending and saving more. The Bank's survey also showed long-term expectations were at a two-year high, with inflation expected to still be over target at 3.5pc five years away. Economists said the survey kept up the pressure on the Bank to raise interest rates soon, in case expectations of higher prices are becoming entrenched and could prove self-fulfilling. However, less than one-in-10 of those polled planned to push for higher wages, which will relieve policy makers keen to keep rates low to support the economy. http://www.telegraph.co.uk/finance/economics/8389073/UK-consumer-confidence-crashes-to-record-low.html Maybe this explains the 29% drop in mortgage approvals recently. Looking good for a crashtastic year so far... Edit: added pretty chart Edited March 18, 2011 by Pent Up Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 Current monetary policy is pure poison to the value of earnings, savings, future pensions and the day to day liiving costs in an already horrendously over expensive country. Not surprised confidence is down. More and more people will be running a monthly battle with effectuve insolvency as the cost of even doing the mundane things like getting to work and back, running a house (whether owned or rented) spins out of control. Quote Link to comment Share on other sites More sharing options...
Pent Up Posted March 18, 2011 Author Share Posted March 18, 2011 (edited) Current monetary policy is pure poison to the value of earnings, savings, future pensions and the day to day liiving costs in an already horrendously over expensive country. Not surprised confidence is down. More and more people will be running a monthly battle with effectuve insolvency as the cost of even doing the mundane things like getting to work and back, running a house (whether owned or rented) spins out of control. Yep and now ZIRP isn't even having the desired effect of increasing spending: More than half (55pc) of those polled by the Bank of England said they would react to their higher inflation expectations by cutting spending and saving more. Their inaction has rendered their policy completley counter productive. Edit: wording Edited March 18, 2011 by Pent Up Quote Link to comment Share on other sites More sharing options...
200p Posted March 18, 2011 Share Posted March 18, 2011 We'll I've largely given up looking as a FTB. Our final offer outbid in December. Although prices have come down slightly, nothing is making us EXCITED to dive back in. Work is reviewing working practices in the new financial year, and likely to cut bodies (the rumour is). So anybody left will have to do double the work We've going to have to sign on another 6 month rental, so the window of buying has largely passed us now, unless something comes along in the next week or so. You, vendors had your chance! Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 Yep and now ZIRP isn't even having the desired effect of increasing spending: Their inaction has rendered their policy completley counter productive. Edit: wording Indeed, as predicted companies are continuing to shut down their most expensive / easiest shuttered locations (that's us), pocketing the money for the overpriced land and shifting the jobs abroad. Nothing has been fixed, if anything the situation is worse. Not even a question of choice for most now, they have to stop spending, if it carries on they will have to start liquidating. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 http://www.cnbc.com/id/42130406 US Cost of Living Hits Record, Passing Pre-Crisis High Published: Thursday, 17 Mar 2011 | 4:09 PM ET Text Size By: John Melloy Executive Producer, Fast Money One would think that after the worst financial crisis since the Great Depression, Americans could at least catch a break for a while with deflationary forces keeping the cost of living relatively low. That’s not the case. A special index created by the Labor Department to measure the actual cost of living for Americans hit a record high in February, according to data released Thursday, surpassing the old high in July 2008. The Chained Consumer Price Index, released along with the more widely-watched CPI, increased 0.5 percent to 127.4, from 126.8 in January. In July 2008, just as the housing crisis was tightening its grip, the Chained Consumer Price Index hit its previous record of 126.9 Quote Link to comment Share on other sites More sharing options...
aa3 Posted March 18, 2011 Share Posted March 18, 2011 A few super rich guys dont' buy much. Meanwhile the average person got hit with an avalanche of declining hours, lower pay and many new taxes under the Tories. Regardless of your politics a statement of truth is people just scraping by making basic housing, transportation and food costs are not big consumers to drive the economy. Quote Link to comment Share on other sites More sharing options...
The Masked Tulip Posted March 18, 2011 Share Posted March 18, 2011 Public sector workers are worried about redundancy http://www.walesonline.co.uk/news/wales-news/2011/03/18/public-sector-workers-are-worried-about-redundancy-91466-28358310/ Welsh university lecturers walk out in pensions protest Read More http://www.walesonline.co.uk/news/wales-news/2011/03/18/welsh-university-lecturers-walk-out-in-pensions-protest-91466-28356774/#ixzz1Gw0MKuKz Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 A few super rich guys dont' buy much. Meanwhile the average person got hit with an avalanche of declining hours, lower pay and many new taxes under the Tories. Regardless of your politics a statement of truth is people just scraping by making basic housing, transportation and food costs are not big consumers to drive the economy. A few super rich guys won't want to keep their money in or invested in this country and on the basis of the way many will have earned it it certainly won;t benefit the country. Almost no new businesses of any meirt will be started, the emerging small business sector will effectively have been shut down and locked out, it is not about access to finance - the entry price in most cases is way beyond any economic reality. Start a new business and watch all the seed capital go up in smoke paying for a location to trade. taxes, regulation. Quote Link to comment Share on other sites More sharing options...
aa3 Posted March 18, 2011 Share Posted March 18, 2011 A few super rich guys won't want to keep their money in or invested in this country and on the basis of the way many will have earned it it certainly won;t benefit the country. Almost no new businesses of any meirt will be started, the emerging small business sector will effectively have been shut down and locked out, it is not about access to finance - the entry price in most cases is way beyond any economic reality. Start a new business and watch all the seed capital go up in smoke paying for a location to trade. taxes, regulation. Compare it to France where they have a number of large industrial corporations like Saint Gobain, Renault, Michelin and Alstom.. among many others, and they do continuous investment in France of industrial capital. One thing I would say everyone on HPC forum agrees on regardless of ideology is that we need to make things in the UK. A lot of the rich guys I see where I live got there through BTL, trading at banks, food retailing.. or something that imo adds little or nothing to the national wealth. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 Compare it to France where they have a number of large industrial corporations like Saint Gobain, Renault, Michelin and Alstom.. among many others, and they do continuous investment in France of industrial capital. One thing I would say everyone on HPC forum agrees on regardless of ideology is that we need to make things in the UK. A lot of the rich guys I see where I live got there through BTL, trading at banks, food retailing.. or something that imo adds little or nothing to the national wealth. I posted a list of building sector companies recently - materials, components, bulk materials - nearly all of the companies are in foreign hands now. Ponzi economics has destroyed internal investment and savings. They want more of the same, thus economically thus country is going one way only - down the tubes. Quote Link to comment Share on other sites More sharing options...
aa3 Posted March 18, 2011 Share Posted March 18, 2011 I posted a list of building sector companies recently - materials, components, bulk materials - nearly all of the companies are in foreign hands now. Ponzi economics has destroyed internal investment and savings. They want more of the same, thus economically thus country is going one way only - down the tubes. One popular thing is say a building sector company has revenues of £600 million and profit of £100 million. A private equity company will buy it for say £1 billion. And only put a few million down, the rest of the £1 billion will come in high interest bank loans, and investors. Basically the whole 100 million profit and then some goes to paying the interest on the loans. If by some miracle the company survives and pays off the debt, the private equity company 'flips' it and sells it for £3 billion later. To another group who loads the company up on expensive debt. In the long run all our companies die loaded up with all this debt, as they compete against foreign companies who don't have that burden. The banks keep making insane interest the whole way. For being middle men who conjure up the nominal amount of the buyout. The very end run is eventually the debt overwhelms them, the bank write it off, and a company like Saint Gobain buys up the factories. But we lose all the managerial level jobs, and in addition the French will subcontract out to their own countymen. Quote Link to comment Share on other sites More sharing options...
Ash4781 Posted March 18, 2011 Share Posted March 18, 2011 Its pretty bad in retail maidstone with shops closures accelerating.Peston has done a blog entry on hmv and their future. Quote Link to comment Share on other sites More sharing options...
bendy Posted March 18, 2011 Share Posted March 18, 2011 One popular thing is say a building sector company has revenues of £600 million and profit of £100 million. A private equity company will buy it for say £1 billion. And only put a few million down, the rest of the £1 billion will come in high interest bank loans, and investors. Basically the whole 100 million profit and then some goes to paying the interest on the loans. If by some miracle the company survives and pays off the debt, the private equity company 'flips' it and sells it for £3 billion later. To another group who loads the company up on expensive debt. In the long run all our companies die loaded up with all this debt, as they compete against foreign companies who don't have that burden. The banks keep making insane interest the whole way. For being middle men who conjure up the nominal amount of the buyout. The very end run is eventually the debt overwhelms them, the bank write it off, and a company like Saint Gobain buys up the factories. But we lose all the managerial level jobs, and in addition the French will subcontract out to their own countymen. good post of the destructive nature of PE. the wealth transfers from the 'sale' go to a select few, who then relocate abroad, sucking even more out. Quote Link to comment Share on other sites More sharing options...
rantnrave Posted March 18, 2011 Share Posted March 18, 2011 Given the scale of the problems that became evident in 2008, the UK has only had a phony crash so far. This country was not on the sidelines of the excesses in the global economy but leading the way. The economic pain we deserve through our own stupidity has been delayed as long as possible, but it cannot be avoided. Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted March 18, 2011 Share Posted March 18, 2011 Its pretty bad in retail maidstone with shops closures accelerating.Peston has done a blog entry on hmv and their future. The local economy collapsed after Sibley moved to Thailand. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted March 18, 2011 Share Posted March 18, 2011 (edited) Anecdotally, all my like for like living costs have gone up by quite a bit and I've been offered a 1% pay rise. I've had to move to a cheaper rental just to stand still and there's not many lower rental rungs left for me to take. Despite this I've recently been on a once in a lifetime trip to NY and spent a pretty penny on household goods for a move to an unfurnished property, unleashing savings along the way. I ask, as I'm sure others do, what more do they want from me? Edited March 18, 2011 by daiking Quote Link to comment Share on other sites More sharing options...
sossij Posted March 18, 2011 Share Posted March 18, 2011 Current monetary policy is pure poison to the value of earnings, savings, future pensions and the day to day liiving costs in an already horrendously over expensive country. Not surprised confidence is down. More and more people will be running a monthly battle with effectuve insolvency as the cost of even doing the mundane things like getting to work and back, running a house (whether owned or rented) spins out of control. Me Quote Link to comment Share on other sites More sharing options...
rantnrave Posted March 18, 2011 Share Posted March 18, 2011 Welsh university lecturers walk out in pensions protest Let me guess - they would have driven out, but they cant afford the cost of fuel any more... Quote Link to comment Share on other sites More sharing options...
Dave Spart Posted March 18, 2011 Share Posted March 18, 2011 http://www.telegraph.co.uk/finance/economics/8389073/UK-consumer-confidence-crashes-to-record-low.html Maybe this explains the 29% drop in mortgage approvals recently. Looking good for a crashtastic year so far... Edit: added pretty chart Crashtastrope? Quote Link to comment Share on other sites More sharing options...
Dave Spart Posted March 18, 2011 Share Posted March 18, 2011 (edited) http://www.telegraph.co.uk/finance/economics/8389073/UK-consumer-confidence-crashes-to-record-low.html Maybe this explains the 29% drop in mortgage approvals recently. Looking good for a crashtastic year so far... Edit: added pretty chart Crashtastrophe? Edited March 18, 2011 by Dave Spart Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted March 18, 2011 Share Posted March 18, 2011 (edited) Me Don;t let the bank start ripping chunks, that is when they really have you under their thumb. Seconda hand goods, cut back on everything to prevent that. Either that or borrow a shit load and tell them to go swivel. Even the charity shops are struggling now. The comments say it all about the squeeze on earnings and the fixeds costs which are crippling this country at a personal level and business level, although considering the breaks that charities get their complaints are pretty rich. Edit - many shops are just marking time to the end of their leases - the pent up demand to get the landlord / rates off their back must be pretty large - even the corporates are shuttering as the leases come up for renewal. http://www.thisisgloucestershire.co.uk/localnews/gloucester/Charity-shops-Gloucester-forced-close/article-3318312-detail/article.html Edited March 18, 2011 by OnlyMe Quote Link to comment Share on other sites More sharing options...
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