Jump to content
House Price Crash Forum
Sign in to follow this  
Sancho Panza

The Mirage Of Britain's Economic Recovery

Recommended Posts

Telegraph 6/8/13

'Oh yes, wow, as the following graphic drawn from today's Office for National Statistics press release on industrial production amply demonstrates.

click to enlarge

Some recovery that one. Like all statistics, it's how you tell 'em. Yes, production output grew by 0.6 per cent between Q1 and Q2 and manufacturing grew 0.7 per cent over the same period. The one month tally looks even more impressive – production up 1.2 per cent in June compared to a year earlier and manufacturing 2 per cent.

Unfortunately, this gives a highly misleading impression of what's actually happening. There were fewer working days in June last year, and looking at the figures on a three month basis, both production and manufacturing is well down on the same period last year. Manufacturing is slightly higher than it was at the trough of the recession, but industrial production as a whole is actually lower.

And there's the rub, for though there is undoubtedly some kind of a recovery going on, it's not the recovery – based on business investment, exports, savings, and the "march of the makers" – the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown.

Even unbalanced growth, Eddie George, former Governor of the Bank of England, famously said, is better than no growth. Confronted with the abject failure of policy to conjure up the more balanced form of growth that economists agree is what Britain really needs, the Government seems to have adopted – on the if you cannot beat them join them principle – the same view.

So it has taken steps to boost the housing market, go slow on fiscal consolidation, crunch savers to the point where you would be mad not to spend, and so on.

The same sort of thing used to happen under the last Labour government. Every year, it would produce forecasts which optimistically forecast a big pick up net trade and investment. Actually, the Treasury was remarkably good at forecasting growth during this period, but it was right for all the wrong reasons. When the numbers came in, it was always government and private consumption that was driving the patient forward.

The hope is, of course, that once confidence in economic growth – any form of growth – comes back, then the business investment and "march of the makers" will naturally follow in its wake. It's a bit like waiting for godot.'

Personally,I'll believe the recovery story when alcohol sales are on the uptick.

Edited by Sancho Panza

Share this post


Link to post
Share on other sites

Well alcohol is used to keep the sheeple from thinking about things. No more peer pressure, fitting in with ease, popularity with women, improvement in masculinity etc do they even realise its only legal because it washes their brains of injustice. Alcohol has to be the greatest trick ever played on the human race.

Share this post


Link to post
Share on other sites

Well alcohol is used to keep the sheeple from thinking about things. No more peer pressure, fitting in with ease, popularity with women, improvement in masculinity etc do they even realise its only legal because it washes their brains of injustice. Alcohol has to be the greatest trick ever played on the human race.

Don't disrespect booze. The alcohol content kills bacteria. It was a way of making water safe to drink that emerged culturally before we understood that there were water-borne pathogens that were sensitive to fermentation. Plus it's delicious, (compared to nettle tea), and involves less gathering of firewood.

Edited by ChairmanOfTheBored

Share this post


Link to post
Share on other sites

Don't disrespect booze. The alcohol content kills bacteria. It was a way of making water safe to drink that emerged culturally before we understood that there were water-borne pathogens that were sensitive to fermentation. Plus it's delicious, (compared to nettle tea), and involves less gathering of firewood.

And it makes fat birds attractive.

Share this post


Link to post
Share on other sites

Telegraph 6/8/13

'Oh yes, wow, as the following graphic drawn from today's Office for National Statistics press release on industrial production amply demonstrates.

click to enlarge

Some recovery that one. Like all statistics, it's how you tell 'em. Yes, production output grew by 0.6 per cent between Q1 and Q2 and manufacturing grew 0.7 per cent over the same period. The one month tally looks even more impressive – production up 1.2 per cent in June compared to a year earlier and manufacturing 2 per cent.

Unfortunately, this gives a highly misleading impression of what's actually happening. There were fewer working days in June last year, and looking at the figures on a three month basis, both production and manufacturing is well down on the same period last year. Manufacturing is slightly higher than it was at the trough of the recession, but industrial production as a whole is actually lower.

And there's the rub, for though there is undoubtedly some kind of a recovery going on, it's not the recovery – based on business investment, exports, savings, and the "march of the makers" – the Government was either hoping for or predicting. In fact it is the same old unsustainable form of growth that took place under Gordon Brown.

Even unbalanced growth, Eddie George, former Governor of the Bank of England, famously said, is better than no growth. Confronted with the abject failure of policy to conjure up the more balanced form of growth that economists agree is what Britain really needs, the Government seems to have adopted – on the if you cannot beat them join them principle – the same view.

So it has taken steps to boost the housing market, go slow on fiscal consolidation, crunch savers to the point where you would be mad not to spend, and so on.

The same sort of thing used to happen under the last Labour government. Every year, it would produce forecasts which optimistically forecast a big pick up net trade and investment. Actually, the Treasury was remarkably good at forecasting growth during this period, but it was right for all the wrong reasons. When the numbers came in, it was always government and private consumption that was driving the patient forward.

The hope is, of course, that once confidence in economic growth – any form of growth – comes back, then the business investment and "march of the makers" will naturally follow in its wake. It's a bit like waiting for godot.'

Personally,I'll believe the recovery story when alcohol sales are on the uptick.

I really do love our benevolent traitors in charge.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   215 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.