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Realistbear

Guardian: Unemployment, Imbalances, H P C In U S

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Bears are waking up in Fleet Street it seems:

http://business.guardian.co.uk/story/0,,1764910,00.html

In the short term, there is no suggestion that the economy is going to lurch into recession. The global economy is growing strongly, despite the high price of oil, and that is providing a much-needed shot in the arm for UK exporters. Activity in the housing market is picking up and the economy grew by 0.6% in the first quarter of the year: bang in line with its long-term trend. In the financial markets, there is no longer speculation about the Bank cutting rates - the betting is that the next move in borrowing costs will be up.
There are clouds to this silver lining, of course. Unemployment has been rising for a year and, with rising oil prices and weak earnings growth, that may depress consumer spending.
Gordon Brown believes the weakness in the labour market is temporary and that rising joblessness is a response to sub-par growth in 2005. We shall see.
The second point is that this may be as good as it gets for the global economy. The decision by China to raise interest rates - something it does only rarely - is a clear sign that Beijing is worried about overheating.
In the US, the housing market is on course for a hard landing
.
Finally, there are the imbalances within the UK economy.
Steve Nickell, a member of the Bank's monetary policy committee, noted last week* that from 1955 to 1959 the UK's annual trade deficit in goods averaged 0.3% of GDP, but from 2000 to 2004 it averaged 4.3%. In 1995, the deficit was 1.7% of GDP - by 2005 it was 5.4% of GDP. His argument was that despite the deterioration in the balance of trade in goods, the picture was less gloomy if the current account was looked at in the round. British investments overseas yielded over 2% of GDP a year more than the investments made by foreigners in Britain. Together with the UK's strength in services, this meant the overall current account deficit averaged 2% from 2000 to 2004 - less than half the deficit in goods.

:o

Edited by Realistbear

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RealistBear, just by way of slight recompense for my alleged bear-baiting, I thought you'd like this on the subject of US imbalances:

http://news.ft.com/cms/s/162e1680-d866-11d...00779e2340.html

Written by a Democratic congressman.

These crushing debt burdens are getting heavier fast. According to the report, as recently as 2000, our national obligations were “only” $20,000bn, but they have more than doubled in five years. This trend, which economists politely term “unsustainable”, could destroy America’s greatness. President George W. Bush has already borrowed more money than all previous presidents combined. It took 204 years for America to accumulate $1,000bn in debt, but now we are borrowing that much new debt every 18 months.

Edited by BoredTrainBuilder

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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