Read more.The UK managed GDP growth of 0.1 percent in Q4, but that could get revised down.
Read more.The UK managed GDP growth of 0.1 percent in Q4, but that could get revised down.
This will change once taxes are up and the cuts start happening. This is just the calm at the centre of the storm, not the end of it.
Man I need some escapist media now.
Don't mention the war!
[GSV]Trig (26-01-2010)
Well thank god thats over...
Hmmm, I see construction is up, that'll be all the bankers and politicians spending there bonuses and the stuff for the 2012 games then...
Certainly seeing picked in our industry - just to put a damper on the "oh no it's not claims". TBH as a company we're pretty positive about the coming year and we're in manufacturing so make of that what you will.
Personally I think the worst is over but that's subject to people actually being positive - always a problem eh?
It will be interesting to see what impact the poor weather has had on the economy for Q1 2010. If the recovery is as weak as it appears, the days of trading lost to snow may be enough to slow the recovery down.
Erm - isn't construction massively down on last quarter (well, 0.1%, anyway )? The big change looks to be in "Business Services and Financial", which provide a 0.25% *reduction* in GDP last quarter, against having minimal impact this quarter. The contribution of "Distribution, Hotels and Catering" has actually gone down from last quarter: but it no longerhas big deficits from other areas to offset, hence the growth.
Society's to blame,
Or possibly Atari.
I don't .... or at least, I'm far from convinced.
First, even if these provisional figures are maintained once the full figures are in, it's very tentative and well below expectations. Remember, whether we are technically out of recession is actually pretty immaterial. What matters is the recovery, it's growth figures, it's the extent of growth, whether it is maintained and the medium and long-term trends.
Don't get me wrong, even tiny growth is better than continuing decline, so this is good news compared to what might have been, but still poor compared to expectations.
But here's the problems :-
- what about unemployment? I know there was a small fall last month, but what about when you remove government massaging of figures, such as with "training" schemes? What about the increasing trend of those that want full time work taking part time (and hence coming off the figures) because they couldn't get full-time. If you take one full time job, split in into two part0time jobs and take two people off the unemployment figures, has unemployment really fallen by two? The hell it has, and the truth is in growth figures and output.
Oh, and for pre-Christmas unemployment, what about the extra taken on for the pre-Christmas and January retail rush? Round about now, that will disappear. Feb and March figures will be interesting.
- That last point applies to growth too. If you get people to bring forward spending plans, all you do is change the timing, not overall expenditure. Retail sales might well be up in December, but what about once the sales are over (as they pretty much are) and especially, once the VAT hike kicks in?
- We have been cushioned from the full impact by absolutely unprecedented levels of government expenditure, partly on the VAT cut, partly on schemes like the car scrappage scheme and, of course, on "quantitative easing".
The trouble is, even with all of that, and allowing that much of it takes time to feed through, we still only barely managed to get back into actual growth, and even that, provisionally. And all that spending is a bit like a credit card binge - you can protect your lifestyle by paying the mortgage from the credit card, but sooner or later, you have to repay the credit card bill too, and that is when things get really tough.
- we know that years to come are going to be hard. Far from governments spending money hugely, like the last year or two (or even the decade before that), whoever wins in May (or whenever we get the vote) government spending is going to be cut back hard. We know this is going to be very painful, if for no other reason than that none of the parties actually have the balls to be honest and open about it, and put real figures in it.
We face what really is a binary choice :-
- do it the Tory way, cut harder and sooner, and have the recovery shallower and perhaps dip back into recession, in order to get debt down
- do it the Labour way, spend more (than the Tories) and cut less and less aggressively, but at the expense of the debt remaining high, meaning huge costs of financing it for a lot longer.
Either way, taxes are going up and public spending is going down. We can expect to see unemployment rising, especially in the public sector, as government cuts spending, as either government is going to have to do, and quite viciously, whether they'll admit it before an election or not. And it's not just unemployment going up (which of course, reduces the spending the consumer does), or even cuts in public spending .... it;s also turning off the money tap, both on QE and on schemes like the car scrappage scheme.
- and even all that, bad as it is, is assuming we get no more nasty shocks from the banking sector, and that lending starts to increase and that the housing market doesn't collapse further. I wouldn't bet my shirt on any oif them not happening.
I think there's a wide-spread perception that as the "recession" wasn't, after all the hype, that painful, that we dodged a bullet. My perception is that the bullet is still in the air and on the way, and it's in the form of an absolutely huge debt problem.
We just about managed to get out of recession (if the provisional figures are right) and that's with huge government spending, and that can't carry on much longer. It can't carry on much longer because the bond markets and credit agencies won't let it. And it won't carry on much past the election, whenever it is, because politically, the need to maintain a brave face will be past.
So when government spends itself stupid and manages to just about get actual positive growth, what happens when the money tap is turned off, unemployment goes up again and taxes rise?
I hope and pray you're right, Dangel, and that the worst is over, but my perception is that the next decade or so is going to be where we pay for the excesses of the last one, and that it is going to be very painful for a lot of people .... unless you're one of the lucky few receiving those multi-million pound banking bonuses of course.
At least nobody's mentioned depression yet.
It really gets me down when they do..
I agree though - we have a lot to pay back but I do think things could of been an awful lot worse had the banks gone to the wall etc etc. I think it's safe to say a lot is unknown though and I'm certainly not convinced it's dramatically going to change my own life - got a good job, business is good, orders are up, don't have a massive mortgage round my neck, house prices on the up again (the drop still left me with 4 times the value of my mortgage on the price tag) and i'm still buying pointless toys.
Is life that bad? Not for me mate, and that's the only valid opinion any of us can give I suppose.
Oh I agree, things for many of us could have been a lot worse. But the reality is ... they yet might be.
Some people have been hit hard (job lost, house repossessed, etc), and others have so far done fairly well, especially if they're on a tracker mortgage and are paying less than they were.
So far, as long as you weren't on the receiving end of job losses or, worse yet, repossession as well, then the feeling is somewhat ..... what was all the fuss about???
But that's why I question whether "the worst is over", and I'm not convinced we are. My suspicion, and I hope I'm wrong, is that the real pain is yet to come. And despite having a job now, and house prices being on the up again now, it's far from guaranteed that either situation will continue, at least, for most people.
The government's plan is largely based on "growing" our way out of debt, and so far, every time the Chancellor predicts projected growth, he's been overly optimistic. If the internatio0nal markets come to the point that they don't believe his plans for repaying our debt are credible, we risk losing our credit rating and interest rates going up. And the signs are they don't think it's credible, but are holding off, perhaps until the election. If rates rise, bujsiness will get harder, jobs will be lost, rates will rise, mortgages will get more expensive and, quite possibly, the housing market will decline again.
Obviously, none of this is cast in stone. After all, if any of the knew precisely what was going to happen, we'd be billionaires or running a country somewhere .... perhaps this one.
Suffice it to say, without being overly pessimistic or depressing, that we are a very long way from in the clear yet, and it is without doubt that a lot of the pain has been deferred but not eliminated by the massive spending and QE of the last year or year and a half. Perhaps a total collapse has been prevented, and it sure looks like that, but now, as QE gets choked off and taxes start to rise, now comes the unpleasant bit that will be felt by most people, to one extent or another.
The perception of "what was all the fuss about? It wasn't that bad" is about get changed .... as soon as someone gets elected for a 5 year run, and can do and say things without worrying about scaring the kids.
Yes, I agree with Saracen, after the election there could be some slightly less rosy pictures painted, and action taken to boot, like no more free milk in schools for k...wait a minute!
Phage (27-01-2010)
You might well be right (hope not too) but OTOH not having labour in might do a lot to boost confidence too - the 'obama' effect perhaps? The current lot have a proven track record in buggering up the economy and our prime minister is a buffoon. Not that i'm overly optimistic about cameron but at this point i'm with the 'anyone other than brown' majority by a long way. Either way it's a guessing game, pessimistic or optimistic, but that's all it is right now because we find ourselves in a unusual situation versus the last recession to say the least.
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