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Exports are up but house prices down as the UK economic recovery balances precariously.
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Exports are up but house prices down as the UK economic recovery balances precariously.
Reuters poll of 50 economists predict we will not double dip and just see slow growth..Quote:
Originally Posted by HEXUS
http://uk.reuters.com/article/idUKTRE67932I20100810
but then again who believes them? - I work surrounded by them but personally i think something big could be around the corner. Not sure about UK but i think the US may startup the printing press again soon if current situation negative figures continue.
All the news about a possible second resession really doesn't help, as now people are gonna fear for their jobs, and then just spend even less money. Its the same as the Northern Rock situation, if the media hadn't got hold of it so people panicked then there would most likely never have been a problem at all.
I just hope that it doesn't progress any further, so people are more confident to go out and spend some money.
All I want to do now on my lunch is go out and buy some double dips, sherbet fountains and fizzy flying saucers.
Thanks to Hexus for making me even fatter !.
LOL :hexlub:Quote:
Originally Posted by Fatboy40
As always with economics, you have to be very careful in associating cause and effect, especially if you're going to base predictions on shirt-term changes in trends.
For instance, this bit of that article ....
But why are RICS reporting a drop in house prices? Is it a sign of gloom over economic expectations from cautious buyers, or it is something else? Or is it a complex mix?Quote:
And the signs of weakening domestic demand are coming in thick and fast. For the first time in a year, more surveyors are reporting a fall in house prices than a rise, according to RICS. In other words, house prices fell, but this has coincided with a glut of new properties on the market. Retail sales growth also slowed last month.
For instance, the number of properties going onto the market surged partly in response to the remove of HIPS. And as demand has been cautious, not least due to difficulties getting mortgages,well, what always happens when supply exceeds demand? Yup .... prices fall. But, that element due to HIPS is a one-off market adjustment not a start of a trend.
And then we have the impact of the announcements in the budget of changes to CGT, which with some specific exceptions, will hit people with second homes. There is, according to RICS, a significant jump in people putting their second properties on the market, both in reaction to the budget changes and indeed, in anticipation of them.
Simply put, there;s a CGT annual exemption limit of £10,100, and any gain in capital assets above that are subject to CGT and the rate is going from 18% to 28%. So ... anyone with a large gain in the value of a property that isn't their 'principle private residence' is going to be thinking awfully hard about getting out ahead of that CGT clobbering.
Note - I'm not arguing whether the rise was right or wrong, whether it's fairer or not. I'm pointing out that in going from where we were to where we are now, you provide another motive for property flooding onto the market, which alone will drive prices down and is not, in and of itself, anything to do with the economic outlook. It's merely a reaction to a tax change and, as such, is again a short-term variation not a trend.
On the other hand, there's no doubt from retail figures that consumer spending is down and when the consumer is cautious and (economically) conservative, the last thing they tend to do is move home. That is a trend factor, as is the current throttling of mortgage availability by cautious and retrenching banks.
And on that one, government (especially the last one) had a role to play. If you tell banks "you're over-geared and over-extended, so recapitalise", and at the same time you tell them "lend more to businesses and on home mortgages ", they are going to say "huh?" I'd be confused by that, too. It's akin to the back-seat drivers "turn left, right".
What worries me is the scale of the coming cuts. I (and some others) have been saying on here for quite some time that the pain is still to come and that the "recession", which technically has been over for some time now, was largely phantom, at least to the consumer, because the reduction in interest rates left a lot of people actually better off. So unless you were one of the unlucky few that got restricted hours, reduced pay or, worse yet, laid off entirely, you've probably done quite well in the last couple of years.
But the message is now getting through to people that the next few years, and it is years, aren't going to be fun. And the message should be getting through, because the government have been saying it for long enough.
At the bottom of all this is the one great unanswerable question .... we are going to feel serious pain from all these cuts, and it is going to slow the economy down and does risk a double-dip, but would it be worse if we didn't do it?
The answer to that is that nobody, and I mean absolutely nobody, knows. Lots of people have opinions and theories, me included. The Chancellor does, the BofE does, the IMF, OECD and every economist from first year students to professors and heads of think tanks probably do, but absolutely none of them whatsoever know, or ever will.
What I would say seems self-evident is that there is a problem that has to be dealt with, namely first the deficit, and then the debt. It's like trying to run a marathon in shackles, with an anchor chained to your leg. The question is .... is it right to lose the marathon for the next year or two, or to risk coming 17th in every race for the next decade or two. it'll be very painful if we act drastically, as the government is clearly going to do. But it'll be very painful if we don't. And in no small part, blame that muppet Brown for getting us into this mess.
It's the big concern for myself as well.Quote:
Originally Posted by Saracen
For example the cut backs on school rebuilding, with probably architects/planners feeling the effects first in the massive drop off in work (for those that specialise in this area, there's at least one local to me that I'm aware of) and the ripples going out from there that will last for years, all the way down to the local sandwich van that the builders would have visited.
I've not seen any work done on it, but I'd like to see someone try and predict the amount of redundancies that will occur throughout the entire chain due to all government cuts and not just those civil servants at risk which is all we seem to here about, as I can only imagine that it's going to be a massive amount of people !.
Well you can't take a figure like that with any accuracy, as with the alternative there would be massive borrowing required, which can create issues (look at say Argentina for all the gory details) or massive tax hikes which would reduce the money in circulation, meaning people can't afford the new office for the architect or workers therein or even for those who still have jobs to have enough cash left over for the sandwich van.
Its a balance to strike, that is very hard to remotely accurately predict, on both the micro and macro scale.
Personally I find it absolutely fascinating! It is also why I'm strongly opposed to governmental meddling because they think they can do better on every level.
As you say, the message should be going through. Unfortunately it's not. Most people support government cutbacks and accept they are necessary. Provided they don't effect them. :wallbash:Quote:
Originally Posted by Saracen
The only thing that gave me less faith in the human race was in the run up to the election. Every single person interviewed made it clear that they were voting for what's best for them and them alone. Not their neighborhood, town, region or country. Just them personally. And we wonder why we have politicians that run the country like they do.
I now know why my landlord wants me to sign a 3 year contract at the current rate.
Not a chance me thinks!!!
I think it is finally sinking in, and it's reflected in a general nervousness about the future. People are, in large numbers, being cautious, because they're concerned about price rises and wage restraint, and because they're especially concerned about job security. I think the drip-drip-drip in the last couple of months about cuts here and cuts there is finally getting through, that it is coming, it is serious and it's getting rather imminent. In fact it's started, but so far we've seen is a snowflake perched on the tip of the iceberg. We haven't yet even seen the tip of the berg itself, but people are starting to sense there's something big and dangerous in the waters. And it's making them jumpy.Quote:
Originally Posted by badass