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RichM

Limp Leader From Grauniad

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If business confidence needs a boost the government needs to

1) start getting its financial house in order to stave off the otherwise inevitable tax rises that are going to be levied on businesses by measures such as actually implementing the civil service cutbacks it promised & addressing the public sector pension timebomb

2) produce a set of meaningful financial statistics that won't be subject to some major adjustment six months down the line

3) Cut back on the amount of petty regulations & red tape on business

amongst others.......

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Guest Bart of Darkness
The prospect of a fresh cut in interest rates to jump-start the UK's stalled recovery

Recovery? From what? :blink:

You ain't seen nothin' yet!

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Oh dear oh dear. It is FAR FAR too late into the cycle to think you can affect the economy by tweaking the base rate.

Open wide and swallow the bitter pill.

Yes you are going to feel sick for some time to come.

No there is no other remedy. Now, I don't want to see you in my surgery with this complaint again, so take more care of yourself from now on.

frugalista

Edited by frugalista

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They will do anything but admit that the current and forthcoming problems are due to a massive BOOM, exactly what Brown said we wouldn't have.

It's a bit like the dot com thing. I worked for a large American corporation at the time with astronomical growth year in, year out, which became the largest company in the world for a time, as measured by market capitalisation (or capitilization, if you like). All of a sudden, when the whole dot com bubble burst, this company was still making enormous profits but had simply suffered from a drop in sales. This lead to several rounds of widespread redundancies and a huge drop in share price (although not quite of the scale of most others).

What would have happened had the growth been a little more sustainable but still reached the same point as when the problems started, but was still on an upwards trend instead of having dipped?

It seems to me that booms in almost anything are actually really bad, because you have reached a point that is unsustainable and the only way is down from there, eventually.

Nobody who experiences a boom seems to plan for the inevitable bust. Why is this? I think it's just human behaviour.

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The media seems to love titillating their readers with prospects of IR cuts.

So Mervyn King's comments a few days ago has thrown them off course. Even though the prospect of a cut is now a lot less likely, they still think they know better.

This article feels like a little mini tantrum.

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They really need to see that borrowed money has to paid back. If there was 0% interest on borrowed money, you would still have repayments. Or maybe then they would push for permanent interest only 0% loans for all, just to save a few shops. :rolleyes:

The solution is to borrow less, then you have more money to buy what you need, today and tomorrow. To achieve that we need much higher rates to stop such damaging borrowing.

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With the £ slipping to a 3 month low v. the $, and the fed and ecb both raising rates..........and IR cut? They're having a laugh!

Prob is the weaker the £ gets the more inflation we get as imports get more expensive. That means rates have to RISE to shore up the £ not fall!

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This is a particularly crap leader from somebody who evidently takes little interest in the wider picture, and therefore probably wasn't written by Larry Elliott, the Graun's economics correspondent, who is notably more bearish (and better informed).

So business confidence needs a rate cut does it? Oh, that'll fix everything. Because it's obviously lack of business confidence that's the problem, and nothing to do with consumers stopping spending. And the situation doesn't look "a serious recession", even though "most pundits expect that higher oil prices and a sharp drop in consumer spending will mean the current quarter's GDP growth will be negligible if not negative" (second time I've heard that phrase in two days - I get all excited)!

"Despite the UK's short-term problems, the OECD still expects 1.7% growth this year. This is only half of the budget forecast and so dents Mr Brown's economic credibility, but it is satisfactory in context, since there is no hint that the economy is on the brink of negative growth". So the situation's changed since you wrote the previous paragraph has it? "Even so, with consumer spending stalling and house-price inflation evaporating, it is best not to take chances." Of course! Better safe than sorry! Never mind inflation! "A further cut in interest rates might boost business confidence without stirring up inflation." Yes, it might. But then again it might not.

Inconsistent, inconclusive and ill-informed. That's the Graun for you.

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  • 301 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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