Imf Slashes Uk Gdp Forecast

[zugzwang]

They're urging Osborne to be more flexible with his £130bn/yr 'austerity' programme. Presumably they'll be happier with Carney in harness spending indiscriminately to keep public finances under control.

http://www.telegraph.co.uk/finance/economics/9997935/IMF-slashes-UK-growth-forecast-and-urges-George-Osborne-to-slow-austerity.html

IMF slashes UK growth forecast and urges George Osborne to slow austerity

The Government must consider slowing down austerity to boost growth if the public finances are to be brought under control, the International Monetary Fund said as it slashed its forecasts for the UK economy.

By Philip Aldrick, Economics Editor

2:02PM BST 16 Apr 2013

The world’s economic watchdog cut its UK growth estimates for both this year and next by 0.3pc, compared with its January outlook, to just 0.7pc this year and 1.5pc in 2014. Although the IMF’s projection for global growth in 2013 was also weaker than three months ago, at 3.3pc rather than 3.5pc, the UK suffered the sharpest downgrade of any advanced economy across the two years.

Britain’s recovery has stalled due to “lacklustre demand”, the IMF said, as “domestic rebalancing from the public to the private sector is being held back by deleveraging, tight credit conditions, and economic uncertainty”. Weak demand from exports markets, particularly the eurozone, has also hampered growth.

To combat slow growth, the Washington-based institution urged the Chancellor to consider more “flexibility” in his £130bn austerity programme – shorthand for easing off in the short-term and making up the savings later. “Greater near-term flexibility in the path of fiscal adjustment should be considered in the light of lacklustre private demand,” the IMF recommended.

The Bank of England could also be doing more to help the recovery, the IMF said. Rather than use its £375bn of quantitative easing to buy solely government debt, other private sector assets could be purchased, the IMF said in its World Economic Outlook. Specific guidance on how long rates would be held at 0.5pc could also help ease financial conditions, it suggested.

“In the UK, other forms of monetary easing could be considered, including the purchase of private sector assets and greater transparency on the likely future monetary stance,” the IMF said.

[cashinmattress]

Aren't the IMF et al the ones who actually control all nations GDP through manipulation of the money supply?

Prediction means they are limiting or opening the credit spigot.

Edited April 16, 2013 by cashinmattress

[erranta]

They're urging Osborne to be more flexible with his £130bn/yr 'austerity' programme. Presumably they'll be happier with Carney in harness spending indiscriminately to keep public finances under control.

http://www.neweconomics.org/mythbusters-britain-is-broke'>http://www.neweconomics.org/mythbusters-britain-is-broke

Found in the Guardian - if you question their credibility

http://www.guardian.co.uk/commentisfree/2013/apr/04/britain-not-broke

Bit on unemployment and how Govt mis-inform the Nation ie consistently LIE to us in their media to create population divisions and antagonism

http://www.neweconomics.org/mythbusters

[VeryMeanReversion]

“In the UK, other forms of monetary easing could be considered, including the purchase of private sector assets ....,” the IMF said.

Let's take this to a logical conclusion:

1. The government prints money to buy private assets.

2. We end up with ever devaluing paper tax-tokens, the government gets the real stuff

3. The government invests those private assets for us, imagine how effective that will be

4. Without assets, we get to work a lot more to cover our debts and pay more taxes whilst doing it.

I hope my satnav will be able to find the way to the workhouse.

(In the meantime, I'm busy converting my cash to real-stuff and reducing debt)

[RDW]

(In the meantime, I'm busy converting my cash to real-stuff and reducing debt)

Ditto, I'm on a spend it like Beckham mission at the moment.

[erranta]

"In the UK, other forms of monetary easing could be considered, including the purchase of private sector assets ....," the IMF said.

Let's take this to a logical conclusion:

1. The government prints money to buy private assets.

2. We end up with ever devaluing paper tax-tokens, the government gets the real stuff

3. The government invests those private assets for us, imagine how effective that will be

4. Without assets, we get to work a lot more to cover our debts and pay more taxes whilst doing it.

I hope my satnav will be able to find the way to the workhouse.

(In the meantime, I'm busy converting my cash to real-stuff and reducing debt)

• Posts: 3,330

[Bloo Loo]

• Posts: 3,330

beware the Bloo posts.

[erranta]

beware the Bloo posts.

Occ33ultists playing with God's Biblical numbers

[rantnrave]

To be fair to Osborne and co, his original budget balancing plans probably included as much austerity as we've had and then economic growth coming along and making up the rest of the difference.

Where I think TPTB have been utterly wrong is assuming that the current situation is cyclical, ie, if they hold things together long enough, then growth will magically reappear, because that's what has always happened in the past. They haven't grasped the fact that the UK is in a new paradigm of zombification and the sticking plasters to hold things together until growth comes along are actually making growth much less likely.

[Monkey]

I hope my satnav will be able to find the way to the workhouse.

It'll be useless, as they will confiscate your car/bike etc and pick you up in a bus on route to the work house. your job wil lbe recycling cars into metals for Chinas second property building boom

[Stainless Sam]

You are chancellor for a day.

Option 1 - Print money. Spend it on infrastructure and other projects that will stimulate the economy, reduce the unemployed headcount and provide something permanent. Maybe invest in regenerating manufacturing while you are at it.

Option 2 - Print money. Spend it on bank assets to provide cheap money to pump up the equities market. Add cheap lending to prop up the housing market and depress interest rates on savings. Expect the people making no money on their savings to spend the economy out of the hole, aided by the people who have the feelgood factor because house prices begin to rise.

Before you choose, ask yourself which will give you the most negative result if you ladle a good helping of austereity on top, targetted as ineffectively and destructively as you can manage.

Then, just for good measure, just to take the p!$$ a bit, spend £10M on a funeral that ought to have been put out to private tender, with the lowest bidder getting the job.

[macca]

The wealthy have taken all the money and are doing quite nicely out of the current situation so why aren't we seeing growth or is it a case of they are continuing to offshore and spend nowt?

[frederico]

Let's face it, the IMF are making it up as they go along.

[drrayjo]

Great post; can I quote?

(I mean beyond this place)

You are chancellor for a day.

Option 1 - Print money. Spend it on infrastructure and other projects that will stimulate the economy, reduce the unemployed headcount and provide something permanent. Maybe invest in regenerating manufacturing while you are at it.

Option 2 - Print money. Spend it on bank assets to provide cheap money to pump up the equities market. Add cheap lending to prop up the housing market and depress interest rates on savings. Expect the people making no money on their savings to spend the economy out of the hole, aided by the people who have the feelgood factor because house prices begin to rise.

Before you choose, ask yourself which will give you the most negative result if you ladle a good helping of austereity on top, targetted as ineffectively and destructively as you can manage.

Then, just for good measure, just to take the p!$$ a bit, spend £10M on a funeral that ought to have been put out to private tender, with the lowest bidder getting the job.

[interestrateripoff]

Luckily the interest bill isn't going up....

[zugzwang]

Luckily the interest bill isn't going up....

Not vertically, anyway... yet.

[sombreroloco]

IMF want the Pound to go to zero and it will probably happen quite soon. happy days!

[billybong]

To combat slow growth, the Washington-based institution urged the Chancellor to consider more “flexibility” in his £130bn austerity programme – shorthand for easing off in the short-term and making up the savings later. “Greater near-term flexibility in the path of fiscal adjustment should be considered in the light of lacklustre private demand,” the IMF recommended.

".....easing off in the short-term and making up the savings later."

Isn't that exactly what the UK has been doing for the past 30 or 40 years or so, likely a lot longer. In reality and outside of the spin isn't it what the current government are continuing with.

It sounds like swanee economics.

Edited April 17, 2013 by billybong

[fluffy666]

".....easing off in the short-term and making up the savings later."

Isn't that exactly what the UK has been doing for the past 30 or 40 years or so, likely a lot longer. In reality and outside of the spin isn't it what the current government are continuing with.

It sounds like swanee economics.

If your economy grows by 5% a year and the debt goes up 4% a year you are fine.

If your economy grows by 1% a year and the debt goes up 2% a year you are doomed.

All figures nominal, of course.

[goldbug9999]

You are chancellor for a day.

Option 1 - Print money. Spend it on infrastructure and other projects that will stimulate the economy, reduce the unemployed headcount and provide something permanent. Maybe invest in regenerating manufacturing while you are at it.

Option 2 - Print money. Spend it on bank assets to provide cheap money to pump up the equities market. Add cheap lending to prop up the housing market and depress interest rates on savings. Expect the people making no money on their savings to spend the economy out of the hole, aided by the people who have the feelgood factor because house prices begin to rise.

Option 3 - UK to immediately 100% default on all its debts. Impose 100% capital ratio on all private banks. Goverment only allowed to spend what it can collect in taxes + new money that it is allowed to create only in direct response to a GDP increase. Cancel all public sector pension arrangements and replace payouts with a formula based on the mean of prevailing private annuity rates.

[oracle]

maybe it's time they stopped concentrating on purely finance,and took a long hard look at the regulatory environment...not just commercially,but in civil law also.

too much ninnying.

Edited April 17, 2013 by oracle

[interestrateripoff]

Let's face it, the IMF are making it up as they go along.

All policy makers are making it as they go along because they can't admit the truth. They are all in denial.