Friday, September 26, 2008

Ireland enters recession – why Britain is next

Ireland enters recession – why Britain is next

Ireland's economy has finally gone into recession. And while many commentators argue that Britain won't be next, those commentators are wrong...

Posted by damien @ 05:29 PM (949 views)
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5 thoughts on “Ireland enters recession – why Britain is next

  • Not sure that the €100,000 bank deposit insurance is any kind of guarantee. Irish banks are probably deep in the merde because of their high exposure to commercial and residential property. If/when they start to crumble the government won’t have the funds to back up this assurance.

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  • planning4acrash says:

    I would suggest that we’ve been in recession since the dotcom crash. Ever since then we’ve relied on fiat money. I spoke to a consultant about entry level jobs in Planning in Bristol today. He said that graduate salaries were 22k last year, down to 18k this year. They were about 20k when I graduated in 2002! He seemed freaked out.

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  • why icarus?

    surely the irish government finances are in better shape than ours? and while their limit is now double ours (although the government insist that after fiddling for month sand months there will be another rise in ours eventually!), there is presumably a realatively small pool of depositors to bail out.

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  • p4ac @ 2 – That could be more to do with the glut of graduates we have created. Instead of apprenticed tradesmen.

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  • japanese uncle says:

    Interesting! Starting salary for the new graduates peaked in Japan circa 1990. Since then it has been stagnating to this day. In the UK unions are even less powerful now than their Japanese counterparts then. Times are totally different from the 1970s. Thus wage-price spiral is most unlikely to happen for the crucial few years to come. Another strong case why deflation rather than inflation is the shape of things to come. If you visit your local super market, you will realize, you can shop food cheaper than a year ago. Morrison in particular, is doing quite good these days offering sizable discounts for a range of items, while TESCO is bombarding their Club Card holders with 10% discount vouchers. As I mentioned more than a year ago, retail facilities that have been growing extensively for the past decade, cannot shrink overnight. Cut throat price competition is already beginning. Full-scale withdrawal of risk money from any volatile vehicles including oil derivative markets could cause oil price to drop dramatically, adding fuel to the price deflation.

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