Thursday, January 14, 2010
UK heads for ‘lost decade’ but not to worry say the economists as house prices are rallying
UK economists warn of British ‘lost decade’
UK economists have warned that the UK faces its own ‘lost decade’ as it comes out of its longest ever recession......................Other participants disagreed and were confident of a turnaround in consumer activity - they argued that most savings over the recession had been channeled into a further accumulation of housing assets, a fact corroborated by the recent rally in house prices. But the optimists conceded that this would not be a speedy process.
Posted by jack c @ 11:54 AM (1235 views)
6 thoughts on “UK heads for ‘lost decade’ but not to worry say the economists as house prices are rallying”
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icarus says:
I thought the ‘wealth effect’ of (house price increases leading to more spending) worked only when everybody was confident that house prices would continue to increase in a market with substantial numbers of transactions.
cat and canary says:
“Other participants disagreed and were confident of a turnaround in consumer activity – they argued that most savings over the recession had been channeled into a further accumulation of housing assets”…
OR…. “Other participants put spin on the findings about consumer activity – and avoided admitting that most savings over the recession had been channeled into paying-off an over-priced asset class which has already dropped in average value to the tune of £15,000”
will says:
A lost decade ‘like Japan’s’ included equities and housing crashing around 80%. So why will we be any different?
estrader says:
@3 “So why will we be any different?”
Well because…idiot!
sneaker says:
this is utter nonsense.
the japanese lost decade was because their existing banking and manufacturing industries could no longer compete.
our banks may be hosed, but we have no appreciable manufacturing industry (in comparison to the past – we are of course a member of the G7). so whilst japan couldn’t do anything about its failing manufacturing sector, we have the perfect void in which to grow a new one.
think about how germany had to rebuild after ww2. no industrial base = MASSIVE OPPORTUNITY.
i despair at people’s desire to be doomy without actually taking note of the most simple basics.
OPEN YOUR EYES AND YOU WILL SEE THE MOST ENORMOUS OPPORTUNITY EVERYWHERE.
QUIT WHINGING. GET ON WITH IT.
Fishbone Glover says:
I can’t help but think that the lost decade scenario was what ‘the powers that be’ were aiming for during the credit crunch phase, working on the basis that banks couldn’t survive a 50% fall in house prices and there was no way that the taxpayer could muster enough cash to bail them out under those circumstances.