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The Uk's Economy Cannot Run On Frothy Coffee For Ever

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http://www.theguardian.com/business/2015/feb/26/uk-economy-cannot-run-coffee-for-ever

When coffee shops are among Britain’s retail stars, it’s not surprising that economists argue the merits of the cappuccino economy versus the flat white alternative.

The latest GDP update shows that froth still dominates (the flat white reference being a nod to a tech/digital economy that has yet to gain ascendancy).

Yes, growth was strong last year, at 2.6%, according to Thursday’s Q4 GDP update, but the more thoughtful will worry about figures showing a decline in business investment back to 2009 levels and a reliance on consumer spending to drive the service sector.

If businesses are too nervous to invest, this means they are operating withoutdated equipment and skills. No wonder productivity is low.

Exports remain lacklustre, and are likely to remain that way when there are precious few opportunities in a slowing global economy and with businesses hampered by a laissez-faire government that does little to support their overseas sales.

More important for the GDP figures is the growing number of baby boomers spending their rising wages and fabulous retirement incomes on weekend breaks and boutique hotels. This is where Britain is booming.

Figures on Wednesday showed the number of people who own their homes outright has jumped above the number with mortgages. It goes to emphasise the point that cappuccino-drinking over-50s are keeping the show on the road.

The young, where they are spending, must borrow fantastic sums. As business secretary Vince Cable said on Thursday, at the launch of a small-scale housing initiative to cut building costs, a colossal number of homebuyers in London – he says 40% – are taking out mortgages worth four times their income or more to get on the housing ladder.

As Chris Williamson, chief economist at financial data provider Markit, said: “Lower levels of business investment are a sign that companies have become increasingly worried about long-term prospects, and puts a question mark over the economy’s ability to continue growing at a solid pace in coming years.

“Business investment needs to revive for the upturn to be truly sustainable. At the moment, the growth outlook appears to be largely reliant on households benefiting from falling prices and higher wages, the latter being far from guaranteed,” he said.

The economy can run like this for several years, but only until the borrowing becomes unfeasible for the young and the next financial shock kicks in.

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Loads do, esp those who can't afford to buy a flat. It makes them feel cosmopolitan innit.

In China I was surprised at how many Chinese people walked around with a Starbucks cup. A local guy I worked with explained many of those people picked them out of waste bins and filled them with water, they thought it made them look more important to carry one. I saw people in Shenzen and Guangzhou go into a Carrefour or Walmart and just buy a pencil, again it was explained to me that they only really wanted the carrier bag, so that their friends and neighbours would think they regularly shopped in western stores.

Funny old world.

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It's the knowledge economy that's the future, not extracting/refining $hit out of the ground and making stuff ie real wealth.

Thatcher/Blair/Osborne said so...

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In China I was surprised at how many Chinese people walked around with a Starbucks cup. A local guy I worked with explained many of those people picked them out of waste bins and filled them with water, they thought it made them look more important to carry one. I saw people in Shenzen and Guangzhou go into a Carrefour or Walmart and just buy a pencil, again it was explained to me that they only really wanted the carrier bag, so that their friends and neighbours would think they regularly shopped in western stores.

Funny old world.

I do that with bottled water. Buy one bottle, fill it up endlessly from the tap. Must try it with coffee too.

Do you have any other top tips SS?

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In China I was surprised at how many Chinese people walked around with a Starbucks cup. A local guy I worked with explained many of those people picked them out of waste bins and filled them with water, they thought it made them look more important to carry one. I saw people in Shenzen and Guangzhou go into a Carrefour or Walmart and just buy a pencil, again it was explained to me that they only really wanted the carrier bag, so that their friends and neighbours would think they regularly shopped in western stores.

Funny old world.

People have been known to buy a packet of cream crackers in Harrods' food hall just in order to have one of those green plastic bags to carry around.

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I don't know who spends £3 and more on hot milk. It tastes disgusting anyway

So how do you know it tastes disgusting????

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In China I was surprised at how many Chinese people walked around with a Starbucks cup. A local guy I worked with explained many of those people picked them out of waste bins and filled them with water, they thought it made them look more important to carry one. I saw people in Shenzen and Guangzhou go into a Carrefour or Walmart and just buy a pencil, again it was explained to me that they only really wanted the carrier bag, so that their friends and neighbours would think they regularly shopped in western stores.

Funny old world.

People do that at Harvey Nicks in Leeds...

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Obviously time to treat coffee the same as alcohol and tobacco and tax them heavily combined with preachy messages about abstaining.

So, next year,

'No Coffee day.'

LA clinics for coffee drinkers wanting to give up.

With all these jobs created, the economy will boom

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Obviously time to treat coffee the same as alcohol and tobacco and tax them heavily combined with preachy messages about abstaining.

So, next year,

'No Coffee day.'

LA clinics for coffee drinkers wanting to give up.

With all these jobs created, the economy will boom

You obviously don't have the mind for business. Sod criminalising coffee, legalise brothels, Ganga etc, watch gdp sky rocket....? Edited by PopGun

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Coffee shops are the new pubs.

Quite. At least four of the independent brewers have bought or created coffee chains - St Austell, Brains, Fullers and Shepherd Name. Costa belongs to Whitbread.

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In China I was surprised at how many Chinese people walked around with a Starbucks cup. A local guy I worked with explained many of those people picked them out of waste bins and filled them with water, they thought it made them look more important to carry one. I saw people in Shenzen and Guangzhou go into a Carrefour or Walmart and just buy a pencil, again it was explained to me that they only really wanted the carrier bag, so that their friends and neighbours would think they regularly shopped in western stores.

Funny old world.

Same principle as a Harrods bag, yesno? People who buy their Grauniad at Harrods just for the bag!

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Quite. At least four of the independent brewers have bought or created coffee chains - St Austell, Brains, Fullers and Shepherd Name. Costa belongs to Whitbread.

Indeed. It's a cyclical rise. The drug of choice of 18th-century Enlightenment was coffee, and the movement thrived in coffee shops everywhere-that-mattered in Europe. And coffee itself was widely seen as a dangerous drug, perhaps largely due to its association with radical free thinkers.

Perhaps the resurgence of coffee shops might be a Very Good Thing. Even if it is coming at the expense of the pub and the greasy-spoon.

Oh, and Whitbread no longer brews beer at all. It was (IIRC) about 2002 they got out of that business, in favour of the up-and-coming coffee-brewing business.

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Same principle as a Harrods bag, yesno? People who buy their Grauniad at Harrods just for the bag!

I already told you - it's cream crackers from the Food Hall. Or, in one case, novelty paper clips.

Not me, I hasten to add.

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People do that at Harvey Nicks in Leeds...

Pretty shocked at the prices in Harvey Nicks restaurant, Leeds...God knows what a flat white would cost there.

As an example of how f**ked up our economy is the wealthier University students help themselves to breakfast, so I am told by a relative who is there.

Basically rich girls get to do the Russell Group rite of passage thing on the taxpayer, some sort of finishing school. Useless degree, may meet a rich boy to marry, also vice versa.

Zero product, debt and getting stuff before you have even started work.

Edited by crashmonitor

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Quite. At least four of the independent brewers have bought or created coffee chains - St Austell, Brains, Fullers and Shepherd Name. Costa belongs to Whitbread.

Always seeing pubs (even in suburbs) that have an illuminated sign outside displaying what brand of coffee they serve.

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