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Uk Deficit To Fall Fastest In The Developed World This Year

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So anybody that thinks that the Government is going to slay the golden goose (HTB2) may have to think again. Short term GDP gains and deficit reduction are all that matter for now.

They may even get back on track with Osborne's original deficit reduction targets if he can engineer a housing spend fest leading to massive stamp duty and VAT gains.

The horizon is 2015 as we have long said on here. Doesn't matter what the long term consequences of Osborne's dash for growth are.

http://www.telegraph.co.uk/finance/economics/10367430/IMF-Britains-deficit-to-shrink-at-fastest-rate-in-developed-world-in-2013.html

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Nah, in the medium term the UK is screwed.

We have heard it all before. 'Reducing the deficit' is now as boring as the phrase 'cutting red tape'.

Even cooking the books as they have done with Royal Mail the government's annual deficit considering the recent growth in GDP is abysmal. Prior to the announcement of a sell-off of Royal Mail the government took responsibility for a large proportion of its pension liabilities. The Treasury classed the acquisition as a benefit to the government's deficit reduction and overall debt without factoring in the longer term cost. Even with that factored in last year was very poor for the government's finances.

And this is just the deficit, no mention of the government's actual debt.

Just keep an eye on the value of Sterling and Gilt prices.

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I agree...but he might get away with it up to the next election.

Yeah I agree.

Though in the long run it doesn't matter who is in No 10 or No11 Downing Street as they all follow the same policies. Gordon Brown and George Osborne are just two sides of the same coin.

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You know an economist is lying to you when he starts using % of GDP as his yardstick. GDP is an overaggregated and heavily manipulated Frankenstein's monster of a statistic.

The government doesn't service its debts or collect taxes using %s of GDP, it needs pounds sterling for both of those things. The nominal spending and tax revenue numbers tell you whether the government is really getting a grip on the fiscal situation.

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All that matters is that it is going up less fast than every other developed country. It's not about being the best. It's about being the least worst.

No it isn't. The deficit is falling, but from a much higher level than most other "developed" countries. Bit of a misleading headline from the Torygraph.

debtoecd2013_zps921aa16f.png

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All that matters is that it is going up less fast than every other developed country. It's not about being the best. It's about being the least worst.

Even that isn't true. In Europe, only Spain, Greece and Ireland have a worse deficit than the UK.

It's going up quicker than in all the other countries.

My link

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Nah, in the medium term the UK is screwed.

We have heard it all before. 'Reducing the deficit' is now as boring as the phrase 'cutting red tape'.

Even cooking the books as they have done with Royal Mail the government's annual deficit considering the recent growth in GDP is abysmal. Prior to the announcement of a sell-off of Royal Mail the government took responsibility for a large proportion of its pension liabilities. The Treasury classed the acquisition as a benefit to the government's deficit reduction and overall debt without factoring in the longer term cost. Even with that factored in last year was very poor for the government's finances.

And this is just the deficit, no mention of the government's actual debt.

Just keep an eye on the value of Sterling and Gilt prices.

If property was such a future great potential money maker why are all the cash rich funds and pension companies piling into the Royal Mail and not buying up every spare property on the market or investing/indebting in building and selling/renting.......simply because property however hard the government would like you to think, is no longer going to be the get rich quick way to riches, buy in haste or forever regret in leisure, be all and end all widow of opportunity, the widow is now closed and broken..... ;)

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Even that isn't true. In Europe, only Spain, Greece and Ireland have a worse deficit than the UK.

It's going up quicker than in all the other countries.

My link

The UK doesn't stand out as being remarkable at all in these statistics.

The deficit is contracting at the same rate as the Euro average (about 1%) and along similar lines to the US.

Japan is probably the stand out with its bold economic experiment. Of the BRICs India is looking interesting.

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The deficit isnt falling.

You either have a deficit or you dont.

Edited by Bloo Loo

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You know an economist is lying to you when he starts using % of GDP as his yardstick. GDP is an overaggregated and heavily manipulated Frankenstein's monster of a statistic.

The government doesn't service its debts or collect taxes using %s of GDP, it needs pounds sterling for both of those things. The nominal spending and tax revenue numbers tell you whether the government is really getting a grip on the fiscal situation.

Especially when govt spending is part of GDP.

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Especially when govt spending is part of GDP.

Even printing is part of gdp... Last year it was 30bn on interest received that was transferred back to the treasury... Ergo more printing results in more deficit reduction... We have achieved the sublime paradox once thought impossible in the real world.. Its the equivalent of the higgs boson..

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it's worth remembering that Gordon McRuin McRecovery kept the deficit in check... for a while.

Well that is really the whole point is it not ?.

Brown was able to point to falling or stable public debt for much of his time as Chancellor while private debt ran out of control.

When the banks failed much of the private debt became public debt and the deficit soared.

Amazing that the IMF and others still like to treat public and private debt as qualitatively different even though the experience of 2008 showed that they are essentially the same.

Debt is debt. The only question is who meets the liabilities when it falls due or is defaulted.

On edit - In this respect Osborne and Cameron are no different to Brown and Blair. Their answer to economic contraction is simply to invite the British public to take on more private debt as we have seen from everything from Student Loans to HTB2 (both interestingly examples of private debt explicitly underwritten by the public so that the profits can be at least in part privatised and while any losses are wholly socialised),

Edited by stormymonday_2011

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Just to make that a bit clearer, when you're stoking up a bubble, the statistics always look good for a while. Ireland and Spain had some of the best financial statistics in Europe prior to it all going wrong.

But even taking the figures at face value, what it says is "things are getting worse at a slower rate than they were last year". Given the economic armageddon being practiced by HMG and BoE, it's actually astonishing that they're still this bad. I forsee bad things happening.

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So anybody that thinks that the Government is going to slay the golden goose (HTB2) may have to think again. Short term GDP gains and deficit reduction are all that matter for now.

They may even get back on track with Osborne's original deficit reduction targets if he can engineer a housing spend fest leading to massive stamp duty and VAT gains.

The horizon is 2015 as we have long said on here. Doesn't matter what the long term consequences of Osborne's dash for growth are.

http://www.telegraph...ld-in-2013.html

Well, it's better than booming house prices and an _increasing_ deficit, like we had under Brown. Not saying it's good exactly, just less awful than the alternative.

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But the debt is still going up?

Here we have a chart of the UK debt adjusted for inflation since 1750, which I found quite interesting. Adjusting for inflation as opposed to GDP makes this peak much bigger than the post war peak..........

http://monevator.com/a-history-of-uk-inflation/ (third chart down)

Edited by crashmonitor

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And private debt? How's that morass doing?

Does the bank of england have a Z1 data release like denninger posts on his blog?

There seems to be a conspiracy of silence in the UK to keep non-government debt figures quiet. Only source ive seen are the apocalyptic McKinsey Charts.

From what I can gather, the US is, at best, standing still. 7% Govt deficit offset by 7% private sector deleveraging.

The UK however, is becoming more indebted in both public and private sectors.

Only time this was ever workable was after WW2, when the private sector delayed investment and consumption and had lots of war bonds to spend. Private debt was very low to start with. This time round we already have a record level of private debt (on which they think they are going to build another bubble to achieve a 'surplus')

Good luck with that georgie boy.

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Yeah I agree.

Though in the long run it doesn't matter who is in No 10 or No11 Downing Street as they all follow the same policies. Gordon Brown and George Osborne are just two sides of the same coin.

I prefer the expression "different cheeks of the same a*se".

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But the debt is still going up?

Is this a statement of fact or a question? It can be one or the other, but not both.

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