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Bank Of England Mpc Member Warns Uk Faces Years Of Weak Growth

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http://www.guardian.co.uk/business/2013/may/24/bank-england-mpc-paul-fisher-weak-growth

Fears that Britain faces years more weak growth were raised by a leading Bank of England policymaker when he warned that adjustment to the tougher post-crisis climate was only two-thirds to three-quarters complete.

Speaking in Cardiff on Friday, Paul Fisher said there had been nothing to compare with the recent sluggish performance of the economy since modern quarterly growth data was first produced in 1955.

"It is as if the different groups within our society – households, businesses, banks and the government – have all decided that their future financial positions, on average, will be worse than they thought before the crisis", said Threadneedle Street's director for markets.

Fisher added that the willingness of people to accept cuts in their living standards was explained by their downbeat view of the future.

"One possible household reaction to lower expected incomes is for people to try and work harder, and certainly to avoid unemployment if at all possible. This means being willing to stay in (or find) work even though the benefits from that – real wages – are being squeezed.

"The acquiescence of the UK labour force in accepting lower real wages is quite remarkable for those of us who grew up during the wage-price spirals of the 1970s and 80s. It explains in part why unemployment has stayed much lower than we would have expected, given the weakness of output growth. Much of the labour force has priced itself into work."

Carney has certainly priced himself into work....

So output growth is weak but people are working harder? That doesn't appear to add up.

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How do all the post Labour inspired economics casualties, aka out of work people, 'work harder'?

The actual UK unemployment rate is over 6 million which is significantly more than reported by our very untrustworthy ministers.

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UK may be three quarters of the way through debt purge - Fisher

Britain may be as much as three quarters of the way through the process of working off the high debt levels which have weighed on the economy since the financial crisis, a top Bank of England policymaker said on Friday.

Paul Fisher, one of nine members of the bank's rate-setting committee, said growth would remain weak while Britain's households, public sector, banks and other companies sought to get themselves back to financial health.

"In my view we are maybe two thirds to three quarters of the way through in each case, varying both across and within sectors," Fisher said in notes for a speech.

"There is nothing scientific or ‘official' in that assessment," he added. "It's just a personal best guess on the back of how the economy is behaving plus some direct knowledge of the progress of the banks with their deleveraging plans."

3/4 of the way through and no mass repossessions of property.... Equally no mass develeraging either and it's "nearly over".

It would appear we've missed it all.

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UK may be three quarters of the way through debt purge - Fisher

3/4 of the way through and no mass repossessions of property.... Equally no mass develeraging either and it's "nearly over".

It would appear we've missed it all.

If the debt purge is almost complete why does this jackass keep voting month after month for a debt extension?

"There's nothing scientific in that assessment." Quite.

As for missing it all, on the contrary. Without a genuine private sector deleveraging there can be no recovery.

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Didn't Sir Mervyn say just a week or so ago that the UK is already well on its way to recovery (mind you he has been saying that for years now :rolleyes: ).

Seems there's some double speak going on from within the BoE - as well as much confusion within their ranks.

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http://

www.

investincardiff.com/whats-on/cardiff-bfast-club-paul-fisher-bank-of-england-p267571

Monthly business breakfast networking event featuring a key speaker. This monthly event is sponsored by Western Mail, Morgan Cole and Cardiff & Co.

Prices

Ticket Type Ticket Tariff

Adult £30.00 per ticket type

Ticket price is correct at time of publication

There wasn't much in the way of details in the guardian article - except that he had been "speaking in Cardiff on Friday",

Edited by billybong

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The actual UK unemployment rate is over 6 million which is significantly more than reported by our very untrustworthy ministers.

I think it is even worse than that - Labour Market Statistics for May-13 count it at 9.00 million ("There were 9.00 million economically inactive people aged from 16 to 64, up 47,000 from October to December 2012." - http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/may-2013/index.html).

We have a very, very sick economy but even sicker are the guys pulling the levers of that economy. The fact that I voted for the blue lot in May-10 makes me even more sick.

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"If QE has contributed to inflation still being somewhat over-target at around 2.5% now, that seems to me a much better outcome than the alternative of a deeper recession and a greater risk of deflation stuff getting cheaper," he said.

Inflation a better outcome? More detail from him on that would be good to explain how impoverishing most people is "much better".

If you say so Mr Fisher but it's not that long ago that inflation was supposed to be extremely bad - or so everyone was being told then even by the BoE. In those days Germany was held up as a prime example of how rejecting inflation was good for an economy and indeed looking at Germany now who could say that resisting inflation is wrong. It certainly seems to have been beneficial to Germany.

At least he refrained from saying something like "inflation is the right thing to do" or "celebrate inflation" - or at least he's refrained for the time being.

Likely those paying £30 a head to hear Mr Fisher speak could afford to pay a bit more, likely their taxes have just recently gone down and likely they have been getting more than most in the way of pay rises so they're matching inflation and maybe even better - along with those in the BoE.

Edited by billybong

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Even the BoE link doesn't mention that it was at the St David's Hotel & Spa or the £30 per head or Cardiff's B'fast Club ;) .

Edited by billybong

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Someone posted a link a few weeks back (telegraph link) saying that the decline in north sea oil alone explains lethargic growth) If it was producing what it produced 10 years back, GDP growth today would be the same as ten years ago...

Consider MEW was a percent or so on GDP 2001-2006 also.

Fewer workers (full time at least) and more dependents/retirees.

Dont know whats so hard to accept, this is normality. I much rather they focus on individual wage purchasing power, returning GDP from speculation to wages, rather than the red herring that is 'growth'

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Inflation a better outcome? More detail from him on that would be good to explain how impoverishing most people is "much better"

+1. Sometime around 1970, they all lost their way. Economics stopped being about improving the lot of the average person and mutated into mindless GDP worship....who cares if the top 1% got all the spoils, so long as GDP grows in aggregate, we wont worry about such nuances.

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I think it is even worse than that - Labour Market Statistics for May-13 count it at 9.00 million ("There were 9.00 million economically inactive people aged from 16 to 64, up 47,000 from October to December 2012." - http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/may-2013/index.html).

We have a very, very sick economy but even sicker are the guys pulling the levers of that economy. The fact that I voted for the blue lot in May-10 makes me even more sick.

I thought it was nearer 9.5mn...its never mentioned, but even in the depths of the early 90s recession, total economic inactivity was in the range of 5-6mn...now we're approaching twice that.

Obviously what is needed is another few million Romano-garians.

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I think it is even worse than that - Labour Market Statistics for May-13 count it at 9.00 million ("There were 9.00 million economically inactive people aged from 16 to 64, up 47,000 from October to December 2012." - http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/may-2013/index.html).

We have a very, very sick economy but even sicker are the guys pulling the levers of that economy. The fact that I voted for the blue lot in May-10 makes me even more sick.

Add in the proportion for all the people who only work part of a day and part of a week and that effectively adds in a few million more unemployed compared to when people generally worked full time. If all aspects are taken into account real unemployment could be in the region of about 40%.

It is important to know the real level of unemployment if only to be able to compare current unemployment with when people generally worked full time.

Edited by billybong

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Someone posted a link a few weeks back (telegraph link) saying that the decline in north sea oil alone explains lethargic growth) If it was producing what it produced 10 years back, GDP growth today would be the same as ten years ago...

Consider MEW was a percent or so on GDP 2001-2006 also.

At peak (and this is from some base assumptions) some 9% odd of nominal GDP was mewed at peak (in a year) and given the distribution of spending, e.g. Retail comprising 2/3 GDP, helped add 6% to GDP during this peak.

Happy to discuss this further, its been a while since we talked about GDP and MEW, pre 2008 maybe?

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I thought it was nearer 9.5mn...its never mentioned, but even in the depths of the early 90s recession, total economic inactivity was in the range of 5-6mn...now we're approaching twice that.

Obviously what is needed is another few million Romano-garians.

Looking at the data table A01 (http://www.ons.gov.uk/ons/publications/re-reference-tables.html?edition=tcm%3A77-263579) it seems that the economic inactivity level reached a maximum of 9.407mn in Apr-10 and has been reducing and was below th 9mn figure for Dec-12 and Jan-/Feb-13 ... I cannot see where it goes as low as 5-6mn but then again who knows what revisions / reclassifications they have made in this time - as in all government data (and accounting data), what do they want to show?

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Add in the proportion for all the people who only work part of a day and part of a week and that effectively adds in a few million more unemployed [...]

Yes, underemployment is underreported and under-understood!

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'Together with David Miles and Sir Mervyn King, the Bank's governor, Fisher has been pressing for an additional £25bn of quantitative easing – electronic money creation – to boost growth.'

if Posen hadn't left the MPC committee we'd be gettimg more QE now

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At peak (and this is from some base assumptions) some 9% odd of nominal GDP was mewed at peak (in a year) and given the distribution of spending, e.g. Retail comprising 2/3 GDP, helped add 6% to GDP during this peak.

Happy to discuss this further, its been a while since we talked about GDP and MEW, pre 2008 maybe?

http://www.housepricecrash.co.uk/forum/index.php?showtopic=80904

Didn't think it was 9% but even 2-3% is a large chunk of 'growth' at the time.

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Is he a liar, a fool, or both?

debt-sector-2007.png

Someone tell fantasist Dr Mibbles thats what his austerity/debt delervaging looks like. Overall money supply has NOT contracted. There is no debt deflation. If there is not growth its not because there isnt enough credit, its because its going to the wrong places.

Corp, Household, personal debt all NOT FALLING by any meaningful amount.

Govt Debt RISING

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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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