Wednesday, July 25, 2012

UK economy shrinking

British Double Dip Accelerates Following "Terrible" GDP Data

The current incumbents to try and rescue what is basically a capsized burnt out ship, but I am put in mind of the excellent quote "austerity is not an elective action". The UK is going to be poor with a 50% tax rate and a housing shortage, basically like any failed socialist country. Please tell your friends.

Posted by stillthinking @ 02:19 PM (3462 views)
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12 thoughts on “UK economy shrinking

  • I’m with Goldman on this. If the economy is so bad, why is unemployment so low and house prices so high?

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  • because unemployment is actually around 5-6 million if you count all the people on the sick and on benefits full time

    thats more like 20% unemployment and one of the reasons we have a deficit

    houseprices have been propped up with 0.5% interest rates and bank bailouts,however,its starting to pop and when it does my betting is the btl market will crumble and as ftbs buy property as prices fall and banks ease on deposit,it will create a downward spiral for 20 years,just like japan

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  • Just wonder regarding unemployment figures how many people are like me and don’t even show up in the unemployment figures! After accompanying my military spouse overseas made me void of an entitlement to sign on and thus show up in the count on our return to the UK.

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  • We never came out of recession. It took hundreds of billions of pounds to get a couple percent growth, so that is still just smoke and mirrors.

    Take out government sector and you probably find that industry and private enterprise has been in depression since the early 1970’s.

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  • mark wadsworth says:

    It looks like that sensible person has hijacked Libertas’ account again:

    “Take out government sector and you probably find that industry and private enterprise has been in depression since the early 1970’s.”

    Correct. Because the 1970s is when Home-Owner-Ism became the dominant economic policy in the UK.

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  • crash bandicoot says:

    I can remember reading posts on here in 2005 that were saying we’d be better to take a short sharp correction to wipe out the over indebted and poor business models. Well that never happened and so we’re left with the alternative, extend and pretend until you can pretend no more.

    I saw a series earlier in the year about China (I think it was on C4). And basically it said if you want China to be your paymaster you have to work your socks off for little money (beacuse that’s what the average Chinese do) and accept ruthless control from the centeral government (because that’s the only way to hold such a massive body of disparate people together).

    I see a shock coming for western peoples if they don’t sort their own problems out.

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  • Ask yourself this:-

    What do a repressed people, who are used to almost nothing, do?

    What do a manipulated people, who are used to so much but then lose it, do?

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  • “I’m with Goldman on this. If the economy is so bad, why is unemployment so low and house prices so high?”

    One of the basic principles to understand about recessions is that unemployment is a repercussion of a recession that occurs 2-3 years down the line following the actual recession. It’s a pattern reproduced throughout history.
    House prices also follow factors such as consumer confidence, which also tend to follow the state of the economy rather than mirroring it or influencing it.

    To obsess about house prices as an indicator of the health of the economy is to make the same mistake over and over again: house prices, just like the markets FOLLOW the economy. Attempts at doing things in reverse (i.e. inflate house prices to keep the economy going, please the markets to have the impression of a sold economy) ALWAYS fail. The only solid platform for a growing economy (i.e. trying to inflate house prices will only get you so far until the bubble bursts and you have to pick up the pieces) are competitive industries, increased productivity through investment in infrastructure, higher education and increased exports.

    It’s amusing this British obsession with house prices and also amusing how the middle class turned against a government which had built the foundation of its growing economy on inflated house prices and an inflated financial services industry, yet voted in a government which essentially is attempting the same thing.

    It probably is about time that these same British voters accept THEIR responsibility in the state of the economy, THEIR obsession with property and property prices and BTL. Let’s not forget what triggered the whole financial crisis in the first place even before those “rotten bankers” got their hands on it: over-inflated house prices and unsubstainable private debt (not created by the banks). The sooner the British public can accept that, the sooner they can move on, rather than make the same mistake over and over again with a government convincing people that it’s all about pleasing the markets.

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  • stillthinking says:

    I don’t expect the uk people to do anything.

    They are collectively the most heavily milked skinny cow in the world but say nothing.

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  • stillthinking says:

    In terms of share of income, if the UK economy as measured by GDP has shrunk by 14% since 2007, then if there was some x% of income required to -service- existing debts at that point in time, then had servicing costs remained the same then x as a share of income would be 100/86 i.e. a 16% increase.
    Which you can ameliorate by dropping rates very hard. Hence the idiot mp Young saying that people have never had it so good because costs fell so abruptly. But, if /as the UK economy continues to shrink then as we have essentially hit the zero bound already because can’t really go to zero without really causing serious problems, anyway, so if continues then aggregate national debt servicing costs will unavoidably start increasing as a share of national gdp even without interest rate rises.
    So the economy tanking now, with rates where they are, is very very bad and Cameron will squeal and squeal for global investment (as he has already I read) because he is pushed into the corner. Which in turn is unbelievably bad because the denizens of the uk will drop him and vote for labour who offer free bread and circuses. At which point uk is collapse kaput no investment no pensions nothing.

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  • I see a shock coming for western peoples if they don’t sort their own problems out.

    The times are changing, this is the new norm. Britain will be a high debt, low growth country.

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  • when Home-Owner-Ism became the dominant economic policy in the UK.

    Falling house prices are seen as economic oblivion.

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