Uk Facing Financial Stagnation As World's Biggest Economies Are 'close To Grinding To A Halt', Says Think Tank

[interestrateripoff]

http://www.dailymail.co.uk/news/article-2035074/UK-facing-financial-stagnation-worlds-biggest-economies-close-grinding-halt-says-think-tank.html

The world's biggest economies are close to grinding to a halt as uncertainty across the financial markets hampers growth, an influential think tank has said.

The Organisation for Economic Co-operation and Development has forecast that the UK economy is facing near stagnation if the OECD's central forecast GDP growth of just 0.3 per cent in the final quarter of 2011 turns out to be correct.

This would be a severe drop from 2.5 per cent growth in 2010's third quarter.

Still at least this won't affect the UK's austerity drive, govt projections to be met...

[interestrateripoff]

http://www.guardian.co.uk/business/2011/sep/08/uk-economy-oecd

Alan Clarke, UK economist at Scotia Capital, described the forecast as "grim", pointing out that it amounts to quarterly GDP growth — the way the health of the economy is usually measured by the government — of zero to 0.1% in both of the last two quarters of the year.

He said this was particularly worrying, given that the OECD usually presents a more upbeat forecast. "This is likely to reinforce pessimism if the usually pretty conservative OECD is now more pessimistic than the most pessimistic amongst us."

The OECD sees the gloom spreading right across the world's major economies, with the US expected to record annual growth of just 0.4% in the fourth quarter, Germany -1.4% and Japan zero.

"The risk of more negative growth has become higher in some major OECD economies," it warns, though it does offer the reassuring caveat that, "a downturn of the magnitude of 2008/9 is not foreseen."

More printy printy needed....

[interestrateripoff]

http://www.oecd.org/document/25/0,3746,en_21571361_44315115_48633433_1_1_1_1,00.html

OCED Press conference

Edited September 8, 2011 by interestrateripoff

[Simon Brown]

"The world's biggest economies are close to grinding to a halt as uncertainty across the financial markets hampers growth, an influential think tank has said"

What utter nonsense. There may be little growth but over here on the continent the economies are bopping along very nicely.

Daily Mail - who would admit to reading that garbage?

[whoami]

"The world's biggest economies are close to grinding to a halt as uncertainty across the financial markets hampers growth, an influential think tank has said"

What utter nonsense. There may be little growth but over here on the continent the economies are bopping along very nicely.

Daily Mail - who would admit to reading that garbage?

Most of HPC by the look of it.

[geezer466]

"The world's biggest economies are close to grinding to a halt as uncertainty across the financial markets hampers growth, an influential think tank has said"

What utter nonsense. There may be little growth but over here on the continent the economies are bopping along very nicely.

Daily Mail - who would admit to reading that garbage?

That will be Germany then will it the powerhouse of the whole continent?

German exports fell by 1.8% in July, much more than expected, official figures have shown.

Note the story is not on the DM.....

[MrFlibble]

More printy printy needed....

What happened to the green shoots of recovery, not heard talk of those in a while, did they blossom into a tree, that subsequently got hit by the bulldozer of reality?

All we need are free cookies, then everything will be right as rain

[stoobs]

What happens if growth disappoints?

“We have all had to revise down our short-term expectations over recent weeks” said George Osborne to a City audience on Tuesday, preparing the ground for a likely downgrade of growth forecasts by the Office for Budget Responsibility in November.

This would be the fourth downgrade by the OBR since Osborne’s emergency budget last June.

So what if the downgrades just keep on coming and growth continues to undershoot? What happens, in that case, to the nation’s public finances?

Dr Tim Morgan, head of research at the financial firm Tullett Prebon, has done a projection (p 24-25) in a new (ultra-bearish) report on the UK’s economic future.

Here’s what happens to the deficit if trend growth turns out to be 1.4 per cent per annum over the next four years (about half the rate currently projected by the OBR):

And here’s what happens to the levels of public debt as a share of GDP under those circumstances:

So if growth is that disappointing, the Chancellor will enter the next election borrowing more than 8 per cent of GDP and with debt levels at more than 100 per cent of GDP and rising.

Morgan argues that there’s nothing that the Chancellor can do to avoid this fate. Ed Balls and Labour say it would be a result of cutting too much, too fast.

Whatever view one takes on policy, if this bearish view is realised (and remember that the macro bears have been proven right so far), that is going to be a pretty tough record for the Government to defend in 2015 having promised Britain the sunlit uplands of sound public finances.