Slowest Uk Growth In 12 Years

[eurows]

The UK economy was growing at an annual rate of just 1.5% in the second quarter of 2005, according to new figures.

The unexpected revision meant that UK growth was at its weakest since 1993.

In the three months to June, UK GDP grew by 0.5% compared to the previous quarter, the Office for National Statistics (ONS) said.

www.bbc.co.uk

[Guest Time 2 raise Interest Rates]

Only a personal view, the way I see it, the Government and the VIs

are trying to keep the average man on the street happy by saying

'no need to worry about house prices, things will be fine. Keep

MEWing and spending'. Then on the other hand, telling those a bit clued

up there may be trouble ahead, the economy's slowing. Brown's just

admitted GDP is likely to be substantially below his forecasts and best cut

your cloth to suit.

[DonnieDarker]

Hm. 1993.

Now if only house prices could behave as they were in 1993.

[brainclamp]

Hm. 1993.

Now if only house prices could behave as they were in 1993.

There is no doubt in my mind that it is not oil that is seeing the economy suffer poor growth, but the double digit money printing and the huge gravitational distortion of the centrally planned economy with insane regulations and public sector inflation creating massive current and future liabilities which are curtailing private investment.

The immense mass immigration scheme has driven down wages inflation in the private sector without raising overall productivity dispite modern day slavery now being a commonplace occurance!

The incrediable policies and breaks for landlords seem determined to change the workforce into tenants and landlords. The massive taxation needed of the private sector to meet all these commitments is going to become crushing even if Brown can borrow (future taxes) for a while yet.

ID cards would be the only device that could force such immense taxes as the private economy shrivels up (as it has started to) and make them inescapable. An economy of Rents and taxes.

[Guest Time 2 raise Interest Rates]

The immense mass immigration scheme has driven down wages inflation in the private sector without raising overall productivity dispite modern day slavery now being a commonplace occurance!

There's a good chance this one could back fire big time. I've got lots of

friends that work in the building trade. Most of them of late are finding

work a bit thin on the ground and complaining about foreign workers willing

to work at big discounts. Which is fine when there's lots of work about but

when it dries up and they find themselves competing with them it's not so

good. Most are saying now that if things don't get much better they'd rather

sign on unemployment benefit than work for the same rates as these guys.

[MarkG]

ID cards would be the only device that could force such immense taxes

Why would people pay insanely high taxes rather than quit and go on the dole? We're already close to the Russian situation with our current tax rates, let alone rates high enough to pay for Brown's boondoggles: 'you pretend to pay me and I pretend to work'.

[Bear Goggles]

Okay before we get back onto immigration and ID cards, I thought this was the most interesting part of the article

"Widespread pessimism about the retailing sector will be reinforced by today's news, further weakening retailing shares and reinforcing a no-change approach to interest rates for some time to come,"

Now I thought that 'Widespread pessimism about the retailing sector' usually prompted the BBC to say interest cuts were coming. There seems to be a subtle yet significant change of words here.

It just makes you wonder who is deciding what we hear... not that I'm paranoid or anything

[crash 2005]

This paragraph appears on the BBC website:

Changes to public administration, defence, and transport and storage of motor cars led to the downward revision of the annual figure.

Does this mean that their are a serious number of unsold cars flooding the market??

If so, isn't this what happened just prior to the last houseprice crash / reccession!!

If this is the case it is very stong indicator of potential house price falls as the two are strongly linked, being major purchases.

Does anyone know or have data on the state of the car market.?? I know last time they used disused airfields to store cars in there thousands.

[brainclamp]

It would not surprise me to see people forced to work in some way to force economic output for rents and ID card taxes out of them by making it all but impossible to claim dole.

The truth is there is very little limit to continued mass immigration driving down wages in many jobs below the minimum wage if enough people are imported who are desperate for work.

It is because of this immigration trend in driving down wages over the last period of globalisation that unions were formed, and the Labour movement begun to create better working conditions!

Jobs and trades were so unstable and shaky then that credit was not extended to the masses and the masses of Labour rented with a landowning class dominating everything.

[Economic Sensation]

The UK economy was growing at an annual rate of just 1.5% in the second quarter of 2005, according to new figures.

The unexpected revision meant that UK growth was at its weakest since 1993.

In the three months to June, UK GDP grew by 0.5% compared to the previous quarter, the Office for National Statistics (ONS) said.

www.bbc.co.uk

And we all know what that means i hope by now, it increases the chance that rates are going to be cut in November and possibly as early as October as the Bank of England looks to stimulate the economy and create jobs. I know inflation is higher than the 2% target but core inflation was only 1.7% in August so there is room to cut rates. And it looks increasingly like there will be at least another cut in Q1, taking rates down to 4%. The poll in this forum http://www.housepricecrash.co.uk/forum/ind...topic=15995&hl= i took on the 22nd showed that of the people who posted thought that by the end of June 2006 rates would be around 4.75% - 5% by then, so i suspect the people who made those projections are going to look a little silly as they seemed to have based them on hopes rather than economic facts

All of the economists after the report also called for a rate cut in November, and lower rates makes houses more affordable and drives up demand, which should correct this gradual slowing of house prices and put all of this silly talk of a house price crash well and truly to bed.

Be well

ES

[Economic Sensation]

If they drop rates how will they stop sterling dropping?

No, it will fall undoubtably, but against the dollar. We do most of our trade with the eurozone and there rates are also very low and don't look like moving so the fall will be less pronounced. Also a weaker sterling is good for the economy because it makes our exports more competitive and slows our imports, which cooincides with lower consumer spending anyway. We have just seen the US economy bounce back very nicely from a massive devaluation of its currency, when the dollar fell from 0.85 against the euro in 2001 to 1.35 in December last year. It helped out its economy and now the dollar is heading back higher again on the back of better growth, despite having such huge deficits.

So lower rates and a weaker sterling look on their way. The main concern is inflation and if that picks up at all, which at the worst will mean rates will stay on hold.

ES

[brainclamp]

No, it will fall undoubtably, but against the dollar. We do most of our trade with the eurozone and there rates are also very low and don't look like moving so the fall will be less pronounced. Also a weaker sterling is good for the economy because it makes our exports more competitive and slows our imports, which cooincides with lower consumer spending anyway. We have just seen the US economy bounce back very nicely from a massive devaluation of its currency, when the dollar fell from 0.85 against the euro in 2001 to 1.35 in December last year. It helped out its economy and now the dollar is heading back higher again on the back of better growth, despite having such huge deficits.

So lower rates and a weaker sterling look on their way. The main concern is inflation and if that picks up at all, which at the worst will mean rates will stay on hold.

ES

Are not all those dvd players measured in dollars? China is on the dollar. You are deluded to think that devalueing against the dollar will not see a big drop in living standards.

Italy took the same route - devaluation and lower interest rates as its unproductive public sector over regulated economy dropped the real wage rate.

Thats what devaluation is about in real terms - dropping real labour costs so companies can compete. It is a mark of economies which are suffering falling productivity against thier neighbours.

Italy seems just one step away from being 3rd world in many places. The UK looks like following.

[BuyingBear]

Are not all those dvd players measured in dollars? China is on the dollar.

The yuan is meant to float against a basket of currencies and is now appreciating against the dollar, whilst our own currency is depreciating against the USD.

We also price silly little things like crude in USD, a 10% drop in the sterling doesn't help exports so much if our native industry is dead and our appetite for oil is unaffected, more expensive imports is simply inflationary, we are certainly not going to stop buying oil or clothes, dvd players and everything else from China.

[brainclamp]

There is a well observed inflationary shock effect from devaluation. We saw this in the lawson bust.

However, then the UK was in a state of ever increasing productivity in both the capital and labour markets, so we soon came out of it without any real affect on living standards as rising productivity pulled us through and made us per capita wealthier.

Whatever you say now, the UK's overall productivity is not growing through capital innovations, but through making the private sector per capita poorer by unlimited extention of the labour pool. An increasing bewildering suffication of incentive by regulations and taxes is making sure capital innovation will contract. Productivity is falling by 15% in the public sector while it undergoes inflation. Central goverment workers have seen wages increase 97% from 1997 to 2003. Council tax has risen 70% from 1997 to 2004.

Thats a big difference in where growth is coming from and do not be surprised if we haed towards a dead desperate economy even worse than Italy.

[Bookerman]

This story is on the front of one of the newspapers tomorrow, I saw it at the end of the ITV news at 10.30pm. A graph covering the whole front page. Think it was the guardian or something.

[TW11]

This story is on the front of one of the newspapers tomorrow, I saw it at the end of the ITV news at 10.30pm. A graph covering the whole front page. Think it was the guardian or something.

I saw a brief glimpse of the front page of (I think) The Independent on Newsnight. I think it was this article:

Independent

The paper edition looks quite dramatic with a lovely big red graph with Brown's face superimposed over the top...

Edited September 28, 2005 by TW11

[Bookerman]

Thats the one, I remember the headline. Well done.

[Economic Sensation]

Are not all those dvd players measured in dollars? China is on the dollar. You are deluded to think that devalueing against the dollar will not see a big drop in living standards.

Italy took the same route - devaluation and lower interest rates as its unproductive public sector over regulated economy dropped the real wage rate.

Thats what devaluation is about in real terms - dropping real labour costs so companies can compete. It is a mark of economies which are suffering falling productivity against thier neighbours.

Italy seems just one step away from being 3rd world in many places. The UK looks like following.

What absolute rubbish. Its called a cycle. The dollar devalued massively against almost every major currency (and was almost actively pushed lower by the central bank) in the world over the past few years and have you seen a massive drop in their living standards. Their productivity was actually still stronger than every other economies even as the dollar dropped. Before that the euro devalued sharply from its launch of 1.2 down to .85 but did they have a big drop in living standards?

Despite the dollar rising again against sterling it is still historically very weak and well above its long-term average of 1.65. I hate to point it out but Italy had various other problems including an outdated social structure that caused it problems.

[SarahBell]

Who's doing the remix? "Things can only get rougher"

[MarkG]

The dollar devalued massively against almost every major currency (and was almost actively pushed lower by the central bank) in the world over the past few years and have you seen a massive drop in their living standards.

The only reason the dollar is this high is because hedge funds and foreign central banks are keeping it that way. For the pound to be falling against a currency that's on the verge of collapse means we're in big trouble.

[Economic Sensation]

The only reason the dollar is this high is because hedge funds and foreign central banks are keeping it that way. For the pound to be falling against a currency that's on the verge of collapse means we're in big trouble.

Poppycock, the US economy, unlike the eurozone or other major economies, has a growing economy and is raising interest rates, which attracts money into the country. The dollar is about as far away from collapsing as it is possible to be and is looking set to head higher and higher against sterling and the euro, but this is from historically very weak levels. Sterling is weakening as interest rates are falling and the eurozone has very low rates anyway and is only holding up relatively well because central banks are diversifying their reserves away from the dollar into the euro. Put away the sandwich board.

Its hilarious on this site because virtually everyone thinks we are one step from disaster, and probably has for the last 5 years!!!

[MarkG]

Poppycock, the US economy, unlike the eurozone or other major economies, has a growing economy and is raising interest rates, which attracts money into the country.

So why is the value of its currency having to be propped up by Asian central banks and hedge funds?

Ah, because it's a declining nation with a huge housing bubble (though smaller than ours in individual terms), vast debts, a huge budget deficit, unfunded liabilities worth several years of GDP, and a huge trade deficit.

Edited September 29, 2005 by MarkG

[Leodhasach]

tax rises?

Economic problems? What economic problems??

C'mon Sensation - explain to us how tax rises will actually help the housing market...

The Centre for Economics and Business Research (CEBR) this week predicted a £5 billion tax rise in the 2006 Budget. It said the Chancellor "will be forced either to scale spending down or to raise stealth taxes".

Only on Monday, Mr Brown flatly ruled out cutting his spending - but said he still did not believe he would need to raise tax. But after spending the last two years borrowing his way out of a spending slowdown, he has already breached the Maastricht debt criteria.

Edited September 29, 2005 by Leodhasach

[MarkG]

Indeed. The whole thing would have come down a few years ago were it not for the insanely low interest rates set after 9/11.

Now the crash will be a whole lot worse as debt is a whole lot higher: I'm guessing America's housing bubble will have popped within six months. If that destroys US consumer spending on Chinese goods, then the Chinese will dump their dollars and the dollar will hit about 4-5 to the Euro.

Oh, and don't forget that Iran is going to start selling oil in Euros (or other currencies) soon, removing yet more support from the dollar.

Edited September 29, 2005 by MarkG

[Won'tGetFooledAgain]

Now inflation is rising in the Euro zone according to yesterday's Telegraph.

http://www.telegraph.co.uk/money/main.jhtm.../cneuecon28.xml

"Inflation stirs in Europe and provokes 'raise rates' demands"

"The ECB said yesterday that household loans in August rose 10.7pc across the 12-nation bloc compared with a year earlier, led by double-digit house price rises in Spain and France."

Too bad for Sterling.