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Why Britain Is In The Wrong Type Of Recovery

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http://www.telegraph.co.uk/finance/economics/10513061/Why-Britain-is-in-the-wrong-type-of-recovery.html

Surely any growth is good growth?

Yes and no. While growing household confidence is positive, the risks from a classic British consumer-led recovery is that improvements to Government finances will be driven by rises in household indebtedness. This is neither sustainable nor sensible. We need a Plan B.

The worry is that more Britons have been dipping into their savings to fund purchases because pay packets aren't rising

I think Szu Ping Chan needs to report to the nearest re-education centre, household indebtedness is the plan to boost growth. It's in all the fecking forecasts!

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Anyone notice that the comments to any economics article are mostly sarcastic or pessimistic?

On manufacturing: this week I spoke to a UK resident who's been working at Rolls Royce for 2 years. They're transferring him to Germany for a while in the ramp up to production of the new 4x4 to compete with Bentley's model. He gets paid £1900 a month as a contractor.

The Bentley is priced £120-150k - main markets US & China.

Both marques are owned by German companies - BMW & VW (with some confusing cross-licensing) - which do most of the manufacturing, while Britain does the assembly.

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It doesn't feel like a normal recovery. More like the dog end of the Thatcher or Brown credit booms. We seem to have gone straight from depression to conspicuous excess, whilst missing out all the hard work in between.

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We seem to have gone straight from depression to conspicuous excess, whilst missing out all the hard work in between.

That's what happens when the government take billions from taxpayer and give it to bankers.

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It doesn't feel like a normal recovery. More like the dog end of the Thatcher or Brown credit booms. We seem to have gone straight from depression to conspicuous excess, whilst missing out all the hard work in between.

Straight from the worst depression to boom and not even any green shoots in between.

It's like the economy is suspended in mid air without anything to support it.

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Straight from the worst depression to boom and not even any green shoots in between.

It's like the economy is suspended in mid air without anything to support it.

stats can acheive this.

reality is different though.

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It's like the economy is suspended in mid air without anything to support it.

:rolleyes: You can respect & appreciate the 'Power of Art' even if you cannot see it.

If you can make your economy appear less heavily suspended than others then it will be relatively fluffy & light, & thus be less of a burden on the populace. Rather like a victoria sponge contest at the W.I.

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Straight from the worst depression to boom and not even any green shoots in between.

It's like the economy is suspended in mid air without anything to support it.

Didnt the govt have a look at the stats retrospectively and airbrush 1 or 2 dips into recession out of history?

Listen to Cameron at pmq's every week and you start to realise they believe the their own hype, record levels of employment, deficit dropping like a stone, private sector business being created exponentially, tax breaks for the lowest paid giving them hundreds of £ extra per year, low interest rates for hardworking families, fastest growing GDP in the developed world.

On the street its a very different story. its a dangerous game he is playing.

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Didnt the govt have a look at the stats retrospectively and airbrush 1 or 2 dips into recession out of history?

Listen to Cameron at pmq's every week and you start to realise they believe the their own hype, record levels of employment, deficit dropping like a stone, private sector business being created exponentially, tax breaks for the lowest paid giving them hundreds of £ extra per year, low interest rates for hardworking families, fastest growing GDP in the developed world.

On the street its a very different story. its a dangerous game he is playing.

It`s smoke and mirrors ,cook the books and make the stats look good is the game they are playing

As for the man on the street he`s not the one buying UK gilts

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I don't buy this artificial distinction between physical goods and services. I don't see how it makes a difference whether a company profits by shipping a lump of metal to China or by selling film rights for Harry Potter to a company in California. The money ends up in Britain either way.

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I don't buy this artificial distinction between physical goods and services. I don't see how it makes a difference whether a company profits by shipping a lump of metal to China or by selling film rights for Harry Potter to a company in California. The money ends up in Britain either way.

I agree. At one time Abba was bringing more money into Sweden than Volvo.

Intellectual property seems to be the way to go. Just the problem of what to do with those best qualified to be broom sweepers.

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stats can acheive this.

reality is different though.

All Govt Statistics are highly suspect. THE CRIME FIGURES WERE EXPOSED AS BEING BOGUS - NO SURPRISE. Crime has fallen - but by about 5-10% over the last 15yrs - not 50% as claimed by the govt recently. I KNOW.

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I don't buy this artificial distinction between physical goods and services. I don't see how it makes a difference whether a company profits by shipping a lump of metal to China or by selling film rights for Harry Potter to a company in California. The money ends up in Britain either way.

It depends entirely on how those exports are generated. If you're running a 7+% primary deficit every year while maintaining a 0% interest rate and printing then you're losing money continuously not making it. In fact, the asset price inflation that comes with QE and ZIRP results in even more malinvestment and overcapacity in financial services, reinforcing the economy's existing structural imbalances.

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