U K Growth Figures Unexpectedly Revised Downward

[19 year mortgage 8itch]

In answer to the question, it appears that we ate all the pies and continue to do so.

I'm serious.

The simplest interpretation (I never have any other) is that if 0.4% increase the index can be attributed to a 20% increase in price, "Hot Food" that just became VAT-able must be worth 2% of the index.

Is that right?

[Superted187]

I wish they would just get on and raise interest rates.

Have the piss poor GDP figures of the last 3 years not clearly demonstrated that interest rates of ****** all have done nothing to benefit the economy?

[Bruce Banner]

Meanwhile, now that Osborne's 0.8% rise in inflation caused by his VAT hike have dropped out he attemps to repeat the exercise with his rise on pasties.

It's not the oil price you need to worry about it's the Chancellor!

And you think Balls would be preferable?

[zugzwang]

WHAT!!! our economies going to go back in time?

More than a passing resemblance...

[57percent]

I'm serious.

The simplest interpretation (I never have any other) is that if 0.4% increase the index can be attributed to a 20% increase in price, "Hot Food" that just became VAT-able must be worth 2% of the index.

Is that right?

I make the same calculation. Cannot be true.

[JaneTracy]

As many have commented earlier in this thread the use of "unexpectedly"can be questioned. Also the numbers are simply not accurate enough to justify the media headlines as the likely errors are far larger than the 0.1% being discussed. Take a look at these examples.

For real economic growth we need to measure inflation

Here we have another problem as one of the most common complaints by the general public is that inflation is not measured well and is understated. Some economists (which include me) do think that there are problems here. If we just think of the UK then we have two measures of consumer inflation which are CPI (Consumer Price Index) and RPI (Retail Price Index) and they are usually different often by a wide amount.

To get a measure of real output we need to take the output we measure and use an inflation measure to take out the effect of inflation. Actually we do not use the two used above we use what is called a GDP Deflator. This adjusts the nominal figure to give us a real one.

The problem is how accurate this is and there are doubts to say the least. For the UK the 2010 number was 2.86% and whilst it covers the whole economy and not just consumer inflation I have less faith than I used to have that we can rely on it. The catch is that if it was higher then real economic growth was lower (perhaps as indicated by the income measure that some countries use….).

So added to the problems above we have another one.

The accuracy of trade figures is shocking

Using net exports or exports minus imports gives us perhaps the biggest problem for statistics which is that they are very inaccurate and can be revised years and even decades later. Just as an example the figures for the UK current account in the first quarter of 2011 have been revised favourably by £800 million this morning. When you see that exports were revised up by £2276 million and imports by £1476 I hope you see that we are dealing with a number (net exports) which is the difference between two numbers we measure poorly and even worse we are never entirely sure we get right.

http://www.mindfulmoney.co.uk/wp/shaun-richards/the-problems-with-gross-domestic-product-statistics-explained/

That is just two examples from the ones quoted in that article which means that sadly GDP numbers do not stand up to the scrutiny that they are given

[19 year mortgage 8itch]

I make the same calculation. Cannot be true.

Actually, if you go back to ol' Faisal's tweet it say VAT hike AND excises - i.e. cigs and alcohol increases, as well as pasty tax.

Makes more sense now.

Edited March 28, 2012 by SeeYouNextTuesday

[Dorkins]

Faisal Islam ‏ @faisalislam And re UK: ONS says Budget vAT hikes on pasties and excises will add 0.4% points to inflation.... Ouch.

Don't worry, Merv says we can ignore inflation due to tax rises, or inflation due to a fall in the value of sterling causing import prices to rise, or inflation due to upward movements in commodity prices, or inflation due to pretty much anything.

Let's hope private sector rents go up a lot this quarter, because then the calculated imputed rents enjoyed by homeowners will rise and GDP will soar.

[R K]

And you think Balls would be preferable?

We're in the middle of a depression which is now officially longer than the Great Depression.

We need to borrow to invest, put the 1 million+ capable young people who don't have work into work and have an 'industrial' policy. I personally would also slap import taxes on Chinese imports. We're a net importer so it would benefit us.

I couldn't care less who does this.

[pyewackitt]

#austeriteh

It does what it says

RESPEKT MAH AUSTERITEH!

[Bruce Banner]

We're in the middle of a depression which is now officially longer than the Great Depression.

We need to borrow to invest, put the 1 million+ capable young people who don't have work into work and have an 'industrial' policy. I personally would also slap import taxes on Chinese imports. We're a net importer so it would benefit us.

I couldn't care less who does this.

No, that is the last thing we need to do.

[Guest spp]

Unexpected?? That's makes it all ok then.

Monopoly QE Debt fiat system v The Oil/resource dependant economy

Interesting...

[Bruce Banner]

Have we got a Big Fat UK Thread?

We don't need one.

Our problem is simple, too much debt.

When you have too much debt you slash your overheads and pay it down.

[winkie]

Actually, if you go back to ol' Faisal's tweet it say VAT hike AND excises - i.e. cigs and alcohol increases, as well as pasty tax.

Makes more sense now.

Let them eat pasty.

[zugzwang]

We don't need one.

Our problem is simple, too much debt.

When you have too much debt you slash your overheads and pay it down.

The problem isn't too much debt but too few solvent debtors.

Repairing the national balance sheet is anything but simple. The 'overheads' you're keen to slash are a creditor's income stream or pension. And since all wealth is merely prior created debt, debt destruction literally makes us poorer.

Mervo and co. have used ZIRP and QE to nationalise and re-distribute the debt load across the entire population in an effort to facilitate debt creation and extension. Pensioners and generations unborn have been coerced equally, with little obvious success.

So, in fact, you may be right after all! The banksters should have been made to eat the losses first. It wouldn't have been pretty - confiscation and imprisonment may not have saved the country - but at least the interests of natural justice would have been served.

Alas, too late now. Gordo's debt trap is sprung. We'll ZIRP for as long as we're able, see one final run on the pound, then lights out forever.

[Olebrum]

Everyone needs to panic buy right now to drive the GDP figures for this quarter up and to stop us falling back into recession.

Panic and Buy Buy Buy Now!

[wonderpup]

So, in fact, you may be right after all! The banksters should have been made to eat the losses first. It wouldn't have been pretty - confiscation and imprisonment may not have saved the country - but at least the interests of natural justice would have been served.

There is also the fact that those tempted to indulge in speculation might be less casual about risks if they had seen some losses taken- instead we sent the message that the best thing to do is get as big as possible, load up on risk and join the to big to fail club.

[Debbie568]

******ing hell, didn't realise pies were such a large part of the economy. No wonder were such fat ******s.

It's not just any pie. It's a Gregg's pie....and sausage roll.

Could this hike on hot sausage rolls be to try to persuade the fatties that taking a cold sausage roll home is just not going to be the same - so keep the purse closed and the weight off? Or is it instead an attempt to tax the fatties and prop up the NHS, along the lines of "Oh well, I can't stop you feasting on stodge, but that stodge is going to come back to haunt us all when you need the taxpayer to fund your stomach stapling//liposuction. So pay up now, why don't you?!"

On the other hand, maybe our chancellor just thinks there are way too many Greggs and he wants his slice of the action. There are two in our local shopping mall, not even 100 yards away from each other. I hope he craves a steak bake morning, noon and night, mean sod! The poor and the corpulent have few enough pleasures as it is without him having to take away the pleasure of a lovely hot greggs effort on a freezing cold day.

[Debbie568]

We don't need one.

Our problem is simple, too much debt.

When you have too much debt you slash your overheads and pay it down.

That's one possibility, but a better one is increasing your revenues (even if it means temporarily increasing your levels of debt) and profits sufficiently to cover the debt. Especially if you have a cash flow, rather than a lack of profits, problem.

['Bart']

Or am I being too cynical?

Is that possible on HPC?

We need to borrow to invest

Invest in what?

put the 1 million+ capable young people who don't have work into work

Doing what?

Genuine question.

['Bart']

That's one possibility, but a better one is increasing your revenues (even if it means temporarily increasing your levels of debt) and profits sufficiently to cover the debt.

How? By doing what? Profits from where?

Sorry to be such an ornery cuss but politicians and union leaders are forever saying "we must create jobs", "we must stimulate growth", "we must invest", but they never seem to go into specifics.

Jobs doing what?

Growth.... where?

Invest.... in what?

[Guest_FaFa!_*]

How? By doing what? Profits from where?

Sorry to be such an ornery cuss but politicians and union leaders are forever saying "we must create jobs", "we must stimulate growth", "we must invest", but they never seem to go into specifics.

Jobs doing what?

Growth.... where?

Invest.... in what?

Infrastructure and housing would be the main ones I'd go for. I don't think it is really arguable that both of those are seriously creaky in this country. Are you arguing that demand is sufficiently met in this country that no further work is required beyond what is currently done?

[(Blizzard)]

The problem isn't too much debt but too few solvent debtors.

Repairing the national balance sheet is anything but simple. The 'overheads' you're keen to slash are a creditor's income stream or pension. And since all wealth is merely prior created debt, debt destruction literally makes us poorer.

Mervo and co. have used ZIRP and QE to nationalise and re-distribute the debt load across the entire population in an effort to facilitate debt creation and extension. Pensioners and generations unborn have been coerced equally, with little obvious success.

So, in fact, you may be right after all! The banksters should have been made to eat the losses first. It wouldn't have been pretty - confiscation and imprisonment may not have saved the country - but at least the interests of natural justice would have been served.

Alas, too late now. Gordo's debt trap is sprung. We'll ZIRP for as long as we're able, see one final run on the pound, then lights out forever.

Money might be debt, but wealth certainly isn't. It is perfectly possible to become richer, whilst appearing notionally poorer.

Secondly, there is no 'us' or 'we'. The distribution of the losses matter. If our billionaires all became millionaires overnight, then even they probably wouldn't notice much practical difference in their lifestyles.

We've just lived through the opposite process - the decade of house-price inflation that made us appear richer, whilst actually being poorer and concentrated wealth in the hands of a minority. That's what needs to be undone.

[Bruce Banner]

That's one possibility, but a better one is increasing your revenues (even if it means temporarily increasing your levels of debt) and profits sufficiently to cover the debt. Especially if you have a cash flow, rather than a lack of profits, problem.

We don't have a cash flow problem, we have a cash crisis.

[19 year mortgage 8itch]

How? By doing what? Profits from where?

Sorry to be such an ornery cuss but politicians and union leaders are forever saying "we must create jobs", "we must stimulate growth", "we must invest", but they never seem to go into specifics.

Jobs doing what?

Growth.... where?

Invest.... in what?

Don't laugh but pre-election, on tv, Brown promised a million jobs in sustainable energy technolgies which no doubt is the sort of thing RK is referring to (RK = GB?)

Not something that 2 Eds have ever picked up on until now when I've reminded our party snoopers.

Sorry