Friday, July 24, 2009

More data

GDP shrinks at fastest rate for 60 years

Britain’s economy contracted in the second quarter, marking a full year of decline sharper than any since the 1930s barring that of second world war and its aftermath.

Posted by devo @ 01:11 PM (3905 views)
Please complete the required fields.



16 thoughts on “More data

  • A total fall of 5.7% is pretty large but a depression is defined as a 10% fall or 3/4 years consecutive decline.

    The first quarter saw a 2.4% contraction and the second quarter saw a .7% contraction. Taking a left-field look at it, that’s a big improvement There is clearly more pain ahead and I don’t imagine we’ll see growth this year but the second quarter next year is a fairly safe bet for weak growth. I would have thought that we’ll eventually see a total contraction in the region of 8%, which is skirting pretty close to the 10% depression mark. The big question is how much of the economy will be lost forever and is 8% enough to make a serious dent in “that part of the economy that was the product of unsustainable debt growth” (uncle tom earlier). Personally, I think we’ll have replaced most of the 8% loss by 2012 which is when house prices will finally stabilise. Of course that also means that unemployment wont start reducing for a few years. If you can keep hold of a job then things will be pretty good for you. I remember doing quite well in the early 90’s when it was exciting shopping for cheap holidays, cars, houses etc. Even plumbers had to charge less. If you lose your job, then heaven help you because I think benefits will eventually be reduced. I think we’re headed for the old, haves and haves not, two-speed economy

    Reply
    Please complete the required fields.



  • and back to the real world.

    UK and its lick-a-like Ponzi US cousin are two cheeks of the same Bubble butt. The fairytale laid above is just that, good only for entertaining children, perhaps. Any so-called recovery in UK and US economies will come at the expense of rampant inflation. US had had c.$25tn funny money pumped into it and UK proportionately similar(i.e. ~ £2-3tn). At the first signs of a recovery the oil price will break out above $70 and consumer prices take off, back into double digits. US CPI for June was already pointing at that. There will be no recovery in US/UK. Investors will use the recovery to move out of UK/US debt. The only option will be open and blatant money printing to monetise all debt, sovereign debt and private debt. This is the result of ‘confidence’ based enonomies, i.e those that are not real, genuinely wealth creating but are either in total, rampant, speculation booms or total flatout busts. Casino economies. The best part is ‘the recovery’ is actually the most dangerous for these economies and what will finally bring these failed parasites to their knees.

    Reply
    Please complete the required fields.



  • need-a-crash says:

    @1. flashman – “If you lose your job, then heaven help you because I think benefits will eventually be reduced. I think we’re headed for the old, haves and haves not, two-speed economy”

    While I do sympathise with anyone who loses their job, haven’t we had a “haves and have not” economy for the last 8yrs based on people who have property and those that haven’t got property?

    Reply
    Please complete the required fields.



  • need-a-crash. Yes we have but it’s a matter of degree. I think it could end up more:- have a good life/dont have enough to buy a pint or replace my worn out trainers

    Reply
    Please complete the required fields.



  • This is the most significant data to come out for some time. All these surveys of house prices are a bit airy fairy and whether they go up or down it doesn’t really change the fact that no one really knows what any house is worth. On the other hand, it takes a brave person to say that house prices will rise while the economy is posting such poor figures. For me, this marks the end of the bull market, the end of any pretence of green shoots and the start of a move towards cheaper houses.

    Reply
    Please complete the required fields.



  • charlie brooker says:

    “FT: GDP shrinks at fastest rate for 60 years”

    They didn’t mention that on the Beeb today, did they?

    Reply
    Please complete the required fields.



  • britishblue says:

    Flashman @1. Very good points. A severe recession is also very good for budding entrepreneurs who start up when the bottom is reached.
    However, the biggest social costs of this recession will be borne by the lower middle class who lose their jobs and become debtors by default (because they don’t have deep pockets). I agree that the growth will be replaced by 2012, maybe slightly earlie due to an Olympic boost, but I do think large swathes of the lower middle classes will be scarred for a generation.

    Reply
    Please complete the required fields.



  • peeping tom says:

    [email protected], agreed re the property-owning have/have not society, however the danger is that when property prices have fallen by 50%, still the only people able to buy will be landlords using cash purchases. I don’t mean the amateur BTL idiots, I mean the old-style professional landlords who foresaw a few years ago where the market was going and sold off some of their portfolios to the BTL idiots, whose misfortune they will cash in on. Meanwhile many of those who have been prudently saving for a large deposit will find themselves needing to dip into it in order just to survive the recession.

    Reply
    Please complete the required fields.



  • [email protected]

    Do you honestly think that there will be an Olympic boost?

    I hope I’m wrong but my bet is that the games will be another fiasco like the dome.

    No one seems capable of organising a p*ss up in a brewery in this country anymore, let alone an event on the scale of the Olympics.

    Reply
    Please complete the required fields.



  • letthemfall says:

    “I think we’re headed for the old, haves and haves not, two-speed economy”

    I think we’re already there.

    Reply
    Please complete the required fields.



  • paranoia blue says:

    If you could highlight any particular brewery, I’d only be too glad to come alone and support!
    NB Re: The UK economy – it will be epitomised by my natural functions after “same-highlighted indulgence!”

    Reply
    Please complete the required fields.



  • Michael1william says:

    The dome is a great success now! Come on, yes we are in a very bad recession, but we might as well be positive and get the best out the olympics…..we can’t go back now. I don’t think a Conservative government will help in any way….that’s what I dread

    Reply
    Please complete the required fields.



  • Britishblue says:

    Mr G @7 Every country that has an olympics has an olympic boost. But often afterwards they have a downturn. Greece is a prime example of this. Coming up to the olympics the propaganda machine will be in full flow (whatever party is in), and there will be a feel good factor.

    Not sure what you mean by, ‘No one seems capable of organising a p*ss up in a brewery in this country anymore, let alone an event on the scale of the Olympics’. Maybe you need to start mixing with different people. Just because we are having a recession doesn’t mean that we don’t have a lot fo intelligent, hardworking and talented people in this country.

    Reply
    Please complete the required fields.



  • Have to agree with Saps @ 2. Well said.

    Reply
    Please complete the required fields.



  • novice pete says:

    Saps @ 2 That is possibly the best summarisation of the current stuation that I have read anywhere.
    What do you forsee?

    Reply
    Please complete the required fields.



  • novice pete says:

    oops, situation

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>