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Blow For Osborne As Exports Fall To Lowest In 18 Months

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http://www.telegraph.co.uk/finance/budget/10697527/Blow-for-Osborne-as-exports-fall-to-lowest-in-18-months.html

The Chancellor was dealt a pre-budget blow on Friday as trade figures showed Britain's exports in goods fell to their lowest in a year and a half in January.

Goods exports fell 4pc to £24.248bn, their lowest level since June 2012, pushing the goods trade deficit to £9.793bn in January, from December's £7.662bn. The volume of goods exports in December fell by 3.8pc in January. Imports rose by 5.8pc.

While economists had expected the goods shortfall to widen in January, since December's figure was boosted by exports of volatile items like ships and cars, they had forecast a gentler increase to £8.6bn.

The dip in exports will fuel concerns the UK economy is failing to rebalance away from its consumption-led recovery.

So you're telling me that this fantastic recovery was driven only by money printing and housing bubble?

Can we put the blame on the EU and the foreigners please?

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I'd say it's a relief for him, no risk of interest rates going up anytime soon now. Or more like no need to come up with excuses why interest rates haven't risen.

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So you're telling me that this fantastic recovery was driven only by money printing and housing bubble?

The evidence for this is fairly mixed; there is a fair bit of empirical evidence suggesting that rising house prices genuinelly do fuel consumption (since a) people who experience rises in wealth have more propensity to consume, and B) equity release etc). But its not clear-cut, and there is enough evidence to also argue the contrary.

So the only real honest answer is probably 'we dont know'.

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The evidence for this is fairly mixed; there is a fair bit of empirical evidence suggesting that rising house prices genuinelly do fuel consumption (since a) people who experience rises in wealth have more propensity to consume, and B) equity release etc). But its not clear-cut, and there is enough evidence to also argue the contrary.

So the only real honest answer is probably 'we dont know'.

Yes Brown's growth strategy worked out well last time. I look forward to how this one works out.

Eventually we will get a banking bust on the Icelandic scale. Maybe if we are lucky we may get a solution like Icelands too B)

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The evidence for this is fairly mixed; there is a fair bit of empirical evidence suggesting that rising house prices genuinelly do fuel consumption (since a) people who experience rises in wealth have more propensity to consume, and B) equity release etc). But its not clear-cut, and there is enough evidence to also argue the contrary.

So the only real honest answer is probably 'we dont know'.

lending always fuels consumption...it is rare for a person to borrow if he doesnt have something to spend on.

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http://www.telegraph.co.uk/finance/budget/10697527/Blow-for-Osborne-as-exports-fall-to-lowest-in-18-months.html

So you're telling me that this fantastic recovery was driven only by money printing and housing bubble?

Can we put the blame on the EU and the foreigners please?

It's interesting that Ireland has unexpectedly shrunk as well.

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The ridiculous thing is, everyone knows that what Osbourne (I actually wrote Brown there!) is doing is wrong. We have an unbalanced economy, that needs less consumption, less borrowing, less housebuilding, higher taxes, more exports. But we all, economists, MPs, commentators, media, cling to the hope that somehow we can sort it how without actually doing any of the unpleasant stuff, like working harder and paying ourselves less.

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The ridiculous thing is, everyone knows that what Osbourne (I actually wrote Brown there!) is doing is wrong. We have an unbalanced economy, that needs less consumption, less borrowing, less housebuilding, higher taxes, more exports. But we all, economists, MPs, commentators, media, cling to the hope that somehow we can sort it how without actually doing any of the unpleasant stuff, like working harder and paying ourselves less.

You wot?

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The ridiculous thing is, everyone knows that what Osbourne (I actually wrote Brown there!) is doing is wrong. We have an unbalanced economy, that needs less consumption, less borrowing, less housebuilding, higher taxes, more exports. But we all, economists, MPs, commentators, media, cling to the hope that somehow we can sort it how without actually doing any of the unpleasant stuff, like working harder and paying ourselves less.

Why do we need less housebuilding and higher taxes?? Can we tax ourselves into prosperity? - it has never worked before.

Surely we need more housebuilding and lower taxes. How can we begin to export more if workers have to pay higher taxes and more for housing due to shortage of supply where people want to live?

Edited by BalancedBear

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When they calculate our exports do they include London housing?

I would say that when we sell houses in Britain to foreigners effectively they are an export. The only difference is when that smart phone,tv and gallon of oil has gone to land fill or burnt. The house and the land are still there.

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I just saw "an economist" on Sky blame our poor exports on the weak Eurozone, and our high imports on our improving economy.

Its a miracle!!

Sat there with a straight face he did.

Champion.

Posted in the 2008 thread but this its rightful home.

I was waiting for his lips to curl in to a big grin as he said it, but no.

He kept a poker straight face.

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Eventually we will get a banking bust on the Icelandic scale. Maybe if we are lucky we may get a solution like Icelands too B)

Oh yes please. When?

I think only when the plebs will start a run on the banks. But they can't because they have a mortgage as well.

In Britain people would rather starve and let starve than default on their mortgage.

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Why do we need less housebuilding and higher taxes?? Can we tax ourselves into prosperity? - it has never worked before.

Surely we need more housebuilding and lower taxes.

:)) I'm with the nimbys. I did initially intend to write "property speculation" but thought I might as well go the whole hog. But the constuction industry is something that by its nature adds to consumption, reduces exports, and exaggerates (causes even) the boom bust cycle. We are not going to rebalance our economy by building more houses.

As to taxes, well it's either taxes or spending cuts, take your pick.

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:)) I'm with the nimbys. I did initially intend to write "property speculation" but thought I might as well go the whole hog. But the constuction industry is something that by its nature adds to consumption, reduces exports, and exaggerates (causes even) the boom bust cycle. We are not going to rebalance our economy by building more houses.

As to taxes, well it's either taxes or spending cuts, take your pick.

It seems rather dogmatic. Consumption to put a roof over someone's head at an affordable price is not in the same league as importing tat from China. We may not rebalance the economy by building houses, but building more houses will make it easier to achieve a re-balancing.

With regard to taxes, I would make further cuts. There are plenty of things that can be cut without actual important services having to suffer. The TPA produced a report a few months back, demonstrating just how much money is still being wasted by government.

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lending always fuels consumption...it is rare for a person to borrow if he doesnt have something to spend on.

Its not just lending; if someone's house goes up in value then it may make them more likely to spend more and save less, since their net worth has now increased.

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We are not going to rebalance our economy by building more houses.

Wrong.

It is an essential part of rebalancing the economy, housing costs must fall dramatically to make our workforce more competitive.

For housing costs to fall, building land supply must rise, we need to build more houses and to control immigration.

We wouldn't need a highish(by global standards) minimum wage and to pay ordinary workers 25kGBP if they could put a roof over their head cheaply.

Edited by swissy_fit

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Wrong.

It is an essential part of rebalancing the economy, housing costs must fall dramatically to make our workforce more competitive.

For housing costs to fall, building land supply must rise, we need to build more houses and to control immigration.

We wouldn't need a highish(by global standards) minimum wage and to pay ordinary workers 25kGBP if they could put a roof over their head cheaply.

Expensive housing is mostly just a transfer though isn't it. Not really a competitive dis-advantage.

Cheaper housing would mean more $$$ spunked on Chinese cr4p.

Sterling rate more important for competitiveness.

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Wrong.

It is an essential part of rebalancing the economy, housing costs must fall dramatically to make our workforce more competitive.

For housing costs to fall, building land supply must rise, we need to build more houses and to control immigration.

True, a fall in asset values and a lower cost base would make us more competitive. But I don't believe building more houses will make the price fall (see Ireland, Spain etc) I realise I am in the minority on that. But price falls would be achieved virtually overnight by increasing interest rates and reducing/reforming/abolishing housing benefit. (That in itself would of course cause other problems)

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True, a fall in asset values and a lower cost base would make us more competitive. But I don't believe building more houses will make the price fall (see Ireland, Spain etc) I realise I am in the minority on that. But price falls would be achieved virtually overnight by increasing interest rates and reducing/reforming/abolishing housing benefit. (That in itself would of course cause other problems)

Eh - you mean the same Ireland where prices fell by about 45% and are almost competitive again, and the Spain where something similar is happening?

Building more wouldn't make prices fall immediately, no, but the biggest single factor in the UK is supply IMO.

Renters and buyers have to fight to get a property in more desirable areas, that's the reality, the result is higher prices.

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Eh - you mean the same Ireland where prices fell by about 45% and are almost competitive again, and the Spain where something similar is happening?

Building more wouldn't make prices fall immediately, no, but the biggest single factor in the UK is supply IMO.

Renters and buyers have to fight to get a property in more desirable areas, that's the reality, the result is higher prices.

Small correction "The biggest single factor in the UK is supply [of land with planning permission]"

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Small correction "The biggest single factor in the UK is supply [of land with planning permission]"

Yes, that's what I meant - if it wasn't true then the problem wouldn't be fixable.

The biggish Bicester self-build project, if multiplied by 1000 and done all around the country, would have a huge effect. Well done Bicester at least.

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