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Chancellor George Osborne To Miss Deficit Reduction Target, Says Pimco Managing Director Mike Amey

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http://www.telegraph.co.uk/finance/financialcrisis/8792511/Chancellor-George-Osborne-to-miss-deficit-reduction-target-says-Pimco-managing-director-Mike-Amey.html

Giving his take on economic prospects over the medium term, Mike Amey, managing director and head of sterling portfolios, said: "We don't believe that UK real GDP is going to average 2.75pc in 2012 to 2015. We think if things work out reasonably well it will be more like 2pc, which is going to make it quite hard to get the unemployment rate down.

"Realistically we think they are going to push the deficit closure out by a year or two," he said. The Government's current goal is to balance the budget by 2015.

Mr Amey said that although it was very unlikely Mr Osborne would fully reverse his austerity plans, it was likely there would be an adjustment in the pace at which the deficit was brought down.

"It is going to be very hard for [the Government] not to do anything, simply because GDP is quite weak. We think there will be a tinkering with plan A, rather than a reversal."

Does the UK need over 2% growth to generate jobs? From memory I seem to remember in the past the US economy needing around 3% to create jobs.

Considering we are likely entering another major dip, I highly doubt we'll see anything near 2% unless we have suicidal central bank money printing.

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Did then miss off the "-" ?

When the eastern europeans start to leave, the UK is toast.

If they don't leave and if the lazy chavs get hungry they will turn on the eastern europeans and theyw ill leave and the UK will be toast.

If everyone stays and more immigrants come in there is no way to support them and the UK will be toast.

What I'm trying to say is.....

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Economics really is a big old load of nonsense isn't it?

An economy needs to grow because we've borrowed (but what have we actually borrowed) based on the assumption that it will.

The government is running a deficit which means it is not removing as much money from the economy in taxation as it is putting into the economy in spending.

Now the government is trying to balance the budget so that the amount of money destroyed by taxation and put into the economy through spending is the same.

So how is growth achieved? Presumably through an increase in private sector activity? But that surely relies on the assumption that the decrease in public spending is more than matched by an increase in private sector spending (crowding out theory) which has always, to me at least, seemed like a load of unproven horse manure.

I'm not arguing that we should run a deficit but rather that the twin goals of deficit reduction and fast growth are pretty much incompatible in the era of global commerce.

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Peak oil is upon us, and whilst there appear to be some interesting developments in the field of energy, oil still reigns supreme, and its availability and price constrains economic growth.

Growth of 2.75% is pretty misleading too. If we grow by that extent thanks to massive immigration, then our deficit will not be reduced, as the immigrants will bring just as much demand on government spending with them as new taxes for the exchequer.

So just how they are going to achieve that level of growth, when we have massive wage arbitrage in the private sector driving down pay, and no such problems on benefits or in the public sector, is beyond me. It is the private sector that drives growth, and stifled by high taxes and outpriced by foreign competition, I dont see how it can ride to the rescue.

We are going to find out how well the state functions when we either all have a public sector job or rely on public provision for our material needs, whilst at the same time having to balance the budget because we have defaulted on our debt obligations.

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Now the government is trying to balance the budget so that the amount of money destroyed by taxation and put into the economy through spending is the same.

So how is growth achieved? Presumably through an increase in private sector activity? But that surely relies on the assumption that the decrease in public spending is more than matched by an increase in private sector spending (crowding out theory) which has always, to me at least, seemed like a load of unproven horse manure.

Companies borrow to invest in capacity and effeciency increases which allow them pay of the debt but fundamentally they have to sell more stuff to make it work. Its no different for sovereign nations - the only way to sustainable growth is to run a trade surplus, and not only that but a trade surplus that has sufficient margin to pay the interest (*) with some left over - pretty much impossible given our 40bn interest payments (unless we default of course)

Basscially the UK isnt paying its way in the world - we will have to default at some point. If we have leaders with spines we could do it now and leverage the benefits of 40bn less interest to pay and could use that to kick start a semi viable economy.

Edited by goldbug9999

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http://www.telegraph.co.uk/finance/financialcrisis/8792511/Chancellor-George-Osborne-to-miss-deficit-reduction-target-says-Pimco-managing-director-Mike-Amey.html

Does the UK need over 2% growth to generate jobs? From memory I seem to remember in the past the US economy needing around 3% to create jobs.

Considering we are likely entering another major dip, I highly doubt we'll see anything near 2% unless we have suicidal central bank money printing.

..think if we can survive the forthcoming financial Tsunamis with our heads above water ..we will do well...these targets of yester-year are no longer realistic in the context of October 2011 and beyond ...and certainly doesn't need some self proposed smarty pants to state the obvious.... :rolleyes:

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Yeah right isn't he part of the financial sector. Look where the UK is by listening to the financial sector and their pals including those in Parliament.

DO YOU BELIEVE ANYTHING THEY SAY? Well do you? :lol::lol:

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He said the Bank of England had retained policy credibility despite high inflation,..

:lol::lol::lol: utter farce.

Pimco and credibility. Go on, join the BoE at zero :lol:

Blimey they're all just lining up to give people a laugh.

No, no, don't say it Mr Amey, the recovery is "locked in ", 2% inflation in 2 years, credibility, flick your trouser braces, bailout:bailout :lol::lol::lol::lol::lol:

Edited by billybong

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Does anyone know what the budget deficit is currently running at? I remember in Labour's last year it was at around £175 billion.

Fubar.jpg

public sector net debt at the end of August 2011 was £2258.8 billion (146.9 per cent of GDP). This

compares to £2218.1 billion (151.4 per cent of GDP) as at the end of August 2010.

Our net debt went up by 134 billion from Aug 2010 - Aug 2011. :(

Source :- http://www.hm-treasury.gov.uk/d/psf.pdf

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Did then miss off the "-" ?

When the eastern europeans start to leave, the UK is toast.

If they don't leave and if the lazy chavs get hungry they will turn on the eastern europeans and theyw ill leave and the UK will be toast.

If everyone stays and more immigrants come in there is no way to support them and the UK will be toast.

What I'm trying to say is.....

Does this toast come with marmalade or will we be forced to eat it dry? I suspect the latter here :lol:

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Thanks for that info. Looking at the numbers it appears some progress was made during 2010.. but now we are stalled out on the deficit or even slipping back slightly.

hmm, those public sector wage cuts, pension freezes and redundancies are coming thick and fast.....NOT!

And we bomb yet another Country too, bail out some more banks and do all the things a Prudent Country would do

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hmm, those public sector wage cuts, pension freezes and redundancies are coming thick and fast.....NOT!

And we bomb yet another Country too, bail out some more banks and do all the things a Prudent Country would do

Yes we are special here in the UK.

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hmm, those public sector wage cuts, pension freezes and redundancies are coming thick and fast.....NOT!

And we bomb yet another Country too, bail out some more banks and do all the things a Prudent Country would do

Austerity is a good idea for someone else.

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  • 284 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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