2nd Quarter Growth 0.2%

[Uncle Spielberg]

2nd Quarter Growth 0.2%, thats 0.2% in the last 9 months. A virtual grinding to a halt. The figures are very dissapointing.

Are Cameron and Osborne blowing it ?. Are we slipping to a double dip recession ?.

Was Ed Balls right all along ?.

What does this mean to you, if anything ?.

Discuss.

 

[itszamora]

I see they're blaming the royal wedding this time rather than the snow that clearly was the problem in the last quarter. I do think the Tories have/are cutting too far and too fast - consumer confidence is shot to shit because all we hear is bad news and that everything is more expensive due to inflation and the VAT rise. Hence no-one's spending any money, which is killing the economy at present.

 

[Meade's Ball]

I haven't the knowhow to resuscitate a faltering economy, but i hope them in charge are flexible enough to not be stuck in an original plan that seems to fail. There must be a plan B, even if that means their rivals were in part correct.
If an economy and the markets are built largely on hope and possibility, then happenings of the last year and a bit of expenses scandals and politicians notably selling their souls for success will have dented confidence in the "UK" brand internally and worldwide.

 

[beorhthelm]

Was Ed Balls right all along ?.

Osbourne is not doing anything to encourage growth, but Balls constantly trotting out a mantra "...the cuts are too deep, too fast..." isnt "right" and doesnt really constitute an economic policy. if confidence is poor, it doesnt help when some keep on saying how bad things are or are going to be. no one seems to mention that 400k+ jobs have been created in the past year, so somthing is going on.

we have the second lowest borrowing in Europe (behind Germany), largely because we are being seen to do something about the deficit and debt. increased bond rates will only further increase the deficit and debt in the long run.

 

[Uncle Spielberg]

The situation in the Euro and the USA is dire as well. The World economies are now China and India. China is now the new World order and what they say will go for the next few decades. They have the power, the growth, the money, its just the Amercians haven't realised it yet.

 

[vegster]

2nd Quarter Growth 0.2%, thats 0.2% in the last 9 months. A virtual grinding to a halt. The figures are very dissapointing.

Are Cameron and Osborne blowing it ?. Are we slipping to a double dip recession ?.
Was Ed Balls right all along ?.

What does this mean to you, if anything ?.

Discuss.

In Greece, sales and exports of Taramosolata and Tzatziki are already grinding to a halt and as such they ARE suffering a Double Dip recession already.

 

[Hungry Joe]

 

[beorhthelm]

The situation in the Euro and the USA is dire as well. The World economies are now China and India. China is now the new World order and what they say will go for the next few decades. They have the power, the growth, the money, its just the Amercians haven't realised it yet.

not sure about India, but China's economy is nearly wholely export driven with relativly little domestic demand. they will of course increase this over time, but right now and a while yet they need the western economies to consume all the goods they pump out.

 

[Mr C Gull]

not sure about India, but China's economy is nearly wholely export driven with relativly little domestic demand. they will of course increase this over time, but right now and a while yet they need the western economies to consume all the goods they pump out.

Notwithstanding the fact that the Renimbi is being artificially suppressed and a revaluation would cause China to lose its main competitive advantage.

That coupled with raging inflation and opaque/selective disclosure of financial indicators meaning no one really knows exactly what is going on with their economy and it might not be quite as rosy as some in the mainsteam media/long only mutual funds would have you believe.

 

[brunswick]

this means nothing....it is a nonsense number linked to shopping....

....what really matters is that gold has hit $1620.....this is the only number to be watching.......if this goes up to around $1750 (which wall street will do all they can to stop)....welcome to hyper inflation.....and many will be hit unawares and it wont be pretty.

to learn simply about how the economy works in a fun clip - give this a whirl.

 

[brunswick]

China is now the new World order and what they say will go for the next few decades. They have the power, the growth, the money, its just the Amercians haven't realised it yet.

i am not sure this is the reality, it is just a bigger bubble waiting to burst....

 

[sten_super]

2nd Quarter Growth 0.2%, thats 0.2% in the last 9 months. A virtual grinding to a halt. The figures are very dissapointing.

Disappointing but not unexpected. There were several one off events (not a popular answer but the truth); for example the Japanese earthquake had a major impact on the availability of some composite materials which is bound to have a significant impact upon certain manufacturing sectors. There's also the parlous state of European and US finances to take into consideration.

Are Cameron and Osborne blowing it ?. Are we slipping to a double dip recession ?.

Are they/have they made mistakes? Yes. Are we going to have another recession? No.

Was Ed Balls right all along ?.

Ed Balls is about as credible as shadow chancellor as Osbourne was, IMHO. His views on the recovery are also not those held by the Labour leadership, which is why he sticks to his mantra rather than actually talking about policy.

What does this mean to you, if anything ?.

I'd say it makes the application of a 'plan B' more likely. It also means we'll miss the growth targets upon which the Treasury borrowing forecasts are based, so we'll be borrowing more than planned.

 

[Gritt23]

When you look at the problems across the EU being faced by countries who didn't make such radical cuts, I think it's harsh to be too critical of what has been done over here. The situation in the US is looking pretty unpleasant as well, with Congress playing brinkmanship over the raising of the debt ceiling.

 

[SeagullEd]

Wow, there's a lot of ignorance about China.

Firstly, Uncle Spielberg, the rise of China and India are by no means new things. Predictions and acknowledgement of the East rising have been around in its most recent form since the 1980's but don't forget the Japanese threat in the early 20th Century. By many forecasts and analysis, if it wasnt for the destruction that took place especially to Japans infrastructure during the war they would have marched ahead. On this point, we must remember that the same predictions were put forward for Japan. There are also worries with regards to Chinese inflation. India seems to be the more sustainable economy, from what I can see. But they are not, as yet, the most powerful economies. There is still a long way to go.

The point I would dispute is that America haven't realised it yet... there is huge worry in America, American firms are falling over themselves to do deals with China which would sanctioned.

Secondly, MR C Gull, the whole 'overvalued' thing is a bit of a myth. I'm not saying the currency is not overvalued but I dont think so nearly as much as people say. The question is, compared to what? How would you measure the true value of a currency? The thing to remember with China is that whilst the currency is controlled, so too are capital flows. If the currency was no longer controlled this would most likely be accompanied by a loosening of capital restrictions. Therefore, the currency might be expected to appreciate but this would probably be offset by capital outflows from China larger than we are seeing. Their residents would most likely invest in bonds and shares etc in other countries and perhaps purchase more exports. Why? Because China doesn't produce everything they want and moreover the residents want to be seen to be participating in the world economy. I have no doubt that there would be a large offsetting force of chinese currency being sold thereby depreciating the value of the currency.

What is the 'true' value?

I would also dispute the idea of China as a 'bubble' and would more describe it as a sleeping giant. I am sceptical about the predictions being made, but if you look at China on a very basic economic level there is no reason it should not flourish. If you go back to the 1500's etc China was once again dominant, it only fell behind because of its Ruler stopping trading shifts and thefact that most new technologies started coming from the West. This is changing. China was once a flourishing economy and has the potential to be so once again.

 

[Mr C Gull]

It also means we'll miss the growth targets upon which the Treasury borrowing forecasts are based, so we'll be borrowing more than planned.[/QUOTE]

Due to some accounting nuances this isn't actually a foregone conclusion for the year. Yes PSNB has been above the target level for the last 3 months but its very possible that Osbourne and Co could still meet their targeted reduction in PSNB for the fiscal year.

 

[Silent Bob]

Osbourne is not doing anything to encourage growth, but Balls constantly trotting out a mantra "...the cuts are too deep, too fast..." isnt "right" and doesnt really constitute an economic policy. if confidence is poor, it doesnt help when some keep on saying how bad things are or are going to be.

makes me laugh when tories roll out this excuse, partly because it's so feeble (even worse than "it's the snow, stupid") but mainly because of the accidental implication that Balls is more credible than Osborne even out of power....

 

[glasfryn]

I see they're blaming the royal wedding this time rather than the snow that clearly was the problem in the last quarter. I do think the Tories have/are cutting too far and too fast - consumer confidence is shot to shit because all we hear is bad news and that everything is more expensive due to inflation and the VAT rise. Hence no-one's spending any money, which is killing the economy at present.

so they are not blaming the Labour party .................this time its the Royals fault



fecking priceless

 

[Mr C Gull]

Secondly, MR C Gull, the whole 'overvalued' thing is a bit of a myth. I'm not saying the currency is not overvalued but I dont think so nearly as much as people say. The question is, compared to what? How would you measure the true value of a currency? The thing to remember with China is that whilst the currency is controlled, so too are capital flows. If the currency was no longer controlled this would most likely be accompanied by a loosening of capital restrictions. Therefore, the currency might be expected to appreciate but this would probably be offset by capital outflows from China larger than we are seeing. Their residents would most likely invest in bonds and shares etc in other countries and perhaps purchase more exports. Why? Because China doesn't produce everything they want and moreover the residents want to be seen to be participating in the world economy. I have no doubt that there would be a large offsetting force of chinese currency being sold thereby depreciating the value of the currency.


A whole lot of ignorance?

I think i made the point that these would be headwinds in the short-medium term not that China couldnt be considered to be the emerging force in world economy.

If you re-read your response you use the word 'likely' more than once in your response without really substantiating your views with any evidence. You've also failed to mention/consider when you suggest there will be huge net capital outflows, the trillions of pounds of money waiting to get into the country.

Hypothetically speaking (as its never going to happen in our lifetime) they completely relaxed all capital restrictions.

In addition to all the individuals and companies queuing up to invest in China, if you were a cash rich Chinese resident would you want to invest in a domestic economy with double digit growth or would you prefer 'to be seen to be participating in the world economy' even if this meant investing in countries floundering under large debt burdens, stagnated growth and zero interest rates. D

Lets not also forget that most of the countries experiencing decent economic growth outside of China also have hyper-inflation concerns and strict capital controls of their own so its unlikely you find a home for this huge amount of captial outflows that you talk about even if it wanted to get out.

 

[beorhthelm]

makes me laugh when tories roll out this excuse,

im confused what "excuse" you are infering?

 

[Beach Hut]

Good news for interest rates then................