Why them and not us?

I believe Tony Blair was right all along about the WMD's being a threat to this country...unfortunately he just targeted the wrong bloke. The real threat was sitting in No. 11 next door!

What are the chances that this is not a V type recession nor a W type recession but an L ?

6,7,8 or 9 quarters of contraction are possible. But the first time we even get 0.01% expansion in the economy over a single quarter, all the Green Shoots Brigade will be shouting from the rafters. Tell it to the 3 million unemployed and those who've had their businesses closed and their houses repossessed by greedy bankers more worried about their bonuses than helping the economy. Not to mention the spending cuts imminent. Caledonian Comment

Perhaps you might want to consider the impact of credit bubbles on those economies still in recession - US, UK and Spain. It might provide you with a clue as to why the figures wrong-footed economists. Clue: try googling "balance sheet recession."

I'm sorry for being such a Clever Cloggs, but, Stephanie, are we really expecting the US to come out of recovery? Shouldn't that be out of recession?

First one must remember the figures are coming from the very people who were unable or unwilling to see the coming crisis. Secondly, national economist have been given the job of circus barker to promote political stability. Recovery, is a strange word to be using as the unemployment rates, worldwide, do not reflect a recovery. Because the Chinese have a governmental structure that allows for stimulus dollars to get put to work without the cumbersome bureauracies of the West, is not a sign of growth, but rather of governmental efficiency. It is unfair to point out the Japanese simply because they are being honest. We have our friends, the bankers, pushing paper, sorry, digital monies, back and forth, charging each other fees and paying each bonuses and say that this is a recovery. Production, I mean people that actually produce things, not financial services, is still in free-fall. Again, the bean-counters place the beans in the piles they like and do not talk about from where they came or the size of the other piles. Figures don't lie, but liars figure.

Just now, we should be very grateful for those Asian growth figures. Without them, our economy would still be declining throughout 2010.

On a medium term view, though, it should rankle greatly with us that the advanced Asian economies that are as rich as we are continue to grow so much faster. It should rankle so extremely that we seriously try and figure out how they do it; and what we need to do in order to grow as they do. It is not some Asian magic; Japan has lost the trick.

6 successive quarters .. and all this despite the VAT cut and the BoE printing extra money. Labour have really outdone themselves this time, it makes black wednesday look like a bad day at the office. I wonder how long before the IMF come knocking at our door and demand that we slash public spending?

Steph

how can you be so pessimistic?

Gordon told me me we are best placed to weather this storm.

Darling told us we wouldn't be growing until the end of the year. Err didn't he say we would be out of recession and growing strongly by June this year in last years PBR?

I think we are in limbo until after the election. We will not know where we stand until the books are opened up and we can see the true scale of the mountain in front of us.

I would like you to answer one thing.

AFTER THESE IDIOTS HAVE BEEN KICKED OUT HOW MUCH WILL I OWE AND HOW LONG WILL IT BE BEFORE I CAN PAY IT OFF.

Unfortunately these comparisons are worse than useless. How can you compare our numbers with another country, unless you also factor in that to get ours we also have created debt that will take a generation to repay (M. King's words the other day).

This is a naive as seeing 2 neighbours both come home with a brand new car and thinking, cor, they must be doing all right... when one of them bought with cash, and the other on a 4 year credit deal.

The problem facing the U.K. Economy is simply one thing: Where are all the NEW Manufacturing Industries coming from to provide any Re-newed up-turn in Growth, for until we are told just where any Long-Term substainable large based Industries and the Investments urgently needed for any such recovery are to be found then the U.K. will further continue to lag behind the rest of Europe, and the World at Large when it comes to Jobs creation for Long - Term Employment in the future.

The U.K. currently has an "Over-Sized" Service Sector, which at best can only provide Short-Term relief by stimulating inward Growth leading too any short lived rise in overall Sales Growth in the High Streets up and down the U.K., while at the same time we are realising that VAT will be returning to its previous levels of 17 and a half% at the beginning of 2010, which will further dampen down any current signs in High Street Growth figures.

We, also have to take into account the total destruction and the complete failure of the last 30 Years by both the last Conservative Government and the current Labour Administration in calling for ANY Re-newed National Investments for re-newed Manufacturing replacing the Industries of old ie: Steel, Coal and Textile etc, which has lead the U.K. into achieving nothing but pro-longed High Un-employment, which can now only increase over the next 5 - 10 Years.

'But right now, we shouldn't fret too much about "falling behind".'

Thanks for that party political broadcast on behalf of the Labour Party, Stephanie. I thought you were supposed to be impartial?

The 'surprise' at the GDP figures disappointing just isn't surprising for everyone I have spoken to today across the business world up here in the North----- right now everyone feels there is an avalanche of job losses to come as decent small businesses trying to 'last out' this recession just have to give up the ghost...and start making redundancies.

I can remember the stop-go, IMF, seventies that ended up in the car crash of the winter of discontent and for ages now it just seems this is going to be much, much worse but in Londonland we're apparently permanently on the cusp of not-quite-but-nearly-business as usual...

It's this disconnect between the real-world monthly cashflow figures that really isn't recovering. and the continuing refrain of "it's nearly over and we just about got away with it" coming from London that is dispiriting..... it's as if there is real world that just doesn't count and a media/political/big business-chummy one in London that is all that matters....

I keep hearing Darling on TV telling us that he said two years ago that this would be a long recession and that he did not expect a return to growth until the turn of the year.

That is not strictly true.

In the Pre Budget Report, November 2008 Darling said:

"I, too, am forecasting that output will continue to fall in the UK, for the first two quarters of next year.

But then, because of decisions taken in this Pre-Budget Report, I expect it to start to recover."

That was then pushed back in the budget in April 2009:

"But because of our underlying strength, the measures we are taking, domestically and internationally, I expect to see growth resume towards the end of the year."

He now talks of the turn of the year for a return to growth...

Our underlying strength was clearly not as well founded as that of most other major economies.

I don't get it will the economic commentators/scientists/analysts that keep telling like they are hypnotized that a weak pound will solve all our problems. Last January I read in a newspaper that would should be thankful we had the pound and not the Euro and we could devalue it, make it weaker and all our problems would be over. I get the theory that because it is cheaper our imports would be more expensive so we buy less, our exports are cheaper so all the other countries buy our goods and thus we are saved! Please, that argument is so full of holes and if that's the best they come up with to save our economy, no matter we are in such a mess. Maybe less lunch breaks for the bankers and less bonuses, more thinking from the economists and more questions from the journalists/commentators about why and how and where is the evidence. Instead of all three groups repeating each other would help.

We could easily have home grown economic growth without devaluing the pound or stressing too much about exports, the Chinese seem to have growth although their exports have stopped. The Latvians have a trade surplus, yet their unemployment is sky high.

Maybe time the BBC and others try to find some (any) economists that have different ideas? I don't know who they are by the way! But I'd surely like to see some different ideas.

Darling is in denial as he is still hanging on to the growth will resume at the turn of the year (note the word at and not in the last quarter)but if as I am convinced it wont happen he has at least got several months to think a new spin. With little sign of growth there is no case for dramatic reductions in public expenditure. Better case for a programme of public works to kick the private sector into life and no more QE which is funding bonuses. Plus up basic benefits and allow future inflation to erode back to an earnings related trend norm. Increase taxes on higher earners and balance by not increasing VAT in Jan (a regressive tax).

Time to 'let' Brown go.

Sensible stuff from Stephanie as usual.

Personally I couldn't see any reason to expect third quarter growth in the UK. There has been a severe shock to the system and investment (in plant, equipment and people) would be likely to stay low until confidence returns - and meantime the in-pipeline stuff fades out.

Encouragingly, though, if you take the employment statistics (allowing for lag) as a better measure of the state of the economy (I think you should) then the UK looks like it will take a fairly mild hit from all this. Much of the 'hit' on employment occurred before the crash (plant closures due to inflated land prices and off-shore sourcing). If you are the sort who thinks a few tenths on an estimate at all significant then I'm reasonably sure the forth quarter will come out positive. On employment, parts of the UK started growing last quarter.

On international comparisons, don't forget Germany, with its Speenhamland like employment subsidies, and Japan have pumped much more per capita into the real economy, as per Keynes, than the UK, where most goes to transform one sort of virtual money into another, as per the Monetarists.

If employment growth doesn't pick up generally then it will be time for the UK to take similar steps.

It's sad that so many, particularly those who may well form the next government, can't seem to grasp the paradox of thrift, the lessons of living history and the actual facts about UK public financing. I forgive the young bloggers who have been conditioned to believe inflation (with public spending) the ultimate evil (and unemployment anyway only a problem only for the Celtic fringe people), but I can't forgive senior politicians and academics, would-be leaders, expensively educated, who can't be bothered to read it up and think it through.

This crisis has blown away any rationale for laissez-faire capitalism. Also, post-war history (remember the Marshall plans which got Germany and Japan running?), not to mention China and Korea, show how government spending, regulation and industrial support actually increase the national common wealth.

Is there a credible half-way house for a modern economy? I think so, and I think Alistair Darling is looking for it. I would however, prefer we didn't have a doctrinaire monetarist Chancellor in No 11 next May to prove me wrong.

errm because we were so up ourselves for 10 years (cool Britania) we believed we could build long term prosperity out of fresh air. Who needs real stuff when you can create billions in revenue by inventing and trading in new financial instruments.

We were too cool to get our hands dirty as bourne out by a generation of feckless youth who take benefits while watching eastern europeans happy to toil in the fields.

Steph, surely the other point is that the Japanese and German recessions were much sharper because of the inventory effect in manufactures? That is, their economies are much more reliant on manufacturing than ours and when a recession starts firms rapidly deplete their stocks which have a big negative impact on GDP. So Alistair Darling is not quite telling the whole truth. The reason why our recession is more drawn out is because our economy is in much, much, much, much worse shape than anyone else's.

Stephanie,

My suspicion is that whilst the present government and the bank of England (may) have taken the right steps if there was a buoyant export market available - without that export market the timing looks wrong. It is a bit like a battle ship firing off all of its ammunition when the enemy is not within range. (Also note these are the very same people who did the wrong things that created the problem in the first place!)

We do need to be quite careful about how we define a 'recovery'. A recovery 'should' be defined as a return to relatively stable and balanced market conditions - i.e. not a re-inflated economic bubble and of course the savings ratio restored to sane levels (along with interest rates at 5 to 6 percent and a fair exchange rate.) However with politicians in charge(!) there has to be the real risk that they will do anything to achieve the appearance of a recovery even if that involves generating another and even worse credit bubble! We must strive to prevent this, as it will be disastrous.

"After all, the cheap pound can't help British exports - or a long-term re-balancing of our economy - if there's no-one out there who wants to buy."

Oohh ...the 'dogma' is here again. It is not just the liars of NeoLab, it is the whole media that has swallowed the 'dogma' raw: "The British economy is better off outside the euro because a cheap pound will help rebalance the economy by helping British exports"

Well, I would suggest, Stephanie, to undergo a shock treatment to reverse the brainwashing that the officialdom has inflicted on you and most of the rest of the media and British 'intelligentsia' (whenever Sherlock Holmes manages to find it).

How about?

The only way to rebalance the British economy is to abandon the reliance on services (particularly financial casinos) and consumption.

The only way to do that is if you have bread and butter businesses that are able to compete on a level playing field in the largest single market in the world, which happens to be Britain's largest trading partner.

It so happens that all major economies in this single market are inside the euro - thus avoiding exchange rate uncertainty and increasing transparency, plus avoiding lining the pockets of the banks (they always win, don't they, the bastards) with the exchange commissions and fees racket that needs to be paid to them - and inside Schengen, thus making the flow of goods and people in the single market immensely easier.

And surprise, surprise, the German and French economies, which couldn't rely on competitive devaluation to 'rebalance' their economies are doing better than the UK, and they are both inside the euro and Schengen.

Guess which one country is the only one in the EU that is neither in the euro or Schengen?

https://www.ft.com/cms/s/0/a395ccd4-9fb1-11dc-8031-0000779fd2ac.html

https://www.ft.com/cms/s/0/72b1ab96-8dea-11de-93df-00144feabdc0.html

And you want to rebalance the economy of that country with money printing and competitive devaluation?

I think a ten year old would do better than that.

No 7 "It should rankle so extremely that we seriously try and figure out how they do it; and what we need to do in order to grow as they do."

To take Singapore as an example, they have a lean and mean government which contrasts sharply with our extremely bloated one !! In other words, more of their energy and money goes towards driving growth and less on feeding parasites on the body politic !!

The Japanese, too, have a very bloated bureaucracy and they suffer from much of the same symptoms as Britain does. However, their economy is far more healthily balanced towards manufacturing and exports. Therefore, they came out of the recession much faster than Britain can !! Even so, the current Japanese government got swept in on the promise that they will reform (read decimate) the Japanese bureaucracy !!

Take heed, MacBrown, when Burning Woods come to No 10......

How heartening to learn that the US has come out of recession. How pleasing to know that this is confirmed by Fathom Consulting.

It would be interesting to know why Fathom Consulting are deemed a reliable source of information. Enquiring minds may be pondering the repeated warnings delived by Dr. Paul Craig Roberts, a former Assistant Secretary of the Treasury under the Reagan administration.

https://vdare.com/roberts/091020_failed_states.htm

No 8 "6 successive quarters .. and all this despite the VAT cut and the BoE printing extra money. Labour have really outdone themselves this time, it makes black wednesday look like a bad day at the office"

But wait, wait, weren't we supposed to be "Best Placed to Come OUT of the Recession" ?? Or was that just an echo from a figment of someone' imagination ?? Rather along the lines of "I have saved the world !!"

Now, where are the men in white coats when you need them ??

Can't fault Flanders observations but what's remarkable, even about Darling's response, is the degree to which the predicted peaks and troughs on a monitor are used to justify the current situation. There's no mention of any underlying issues, different economic models or indeed whether France and Germany's exposure to the crises has been as great as the UK's.

As long as the monitor begins to peak in 2010 then all's well - even if education and public services have been slashed, millions are out of work or suffering severe hardship and ordinary people pay the real price of a trillion pound hand out to the banks.

The degree to which it's all back to 'business as usual' is perhaps the saddest part of all this.

You have to have something to sell that people want to buy to take advantage of lower pound. What have we got; no large renewable energy businesses, because of government's lack of interest, investment and drive to remove planning delays that means there is no domestic market to grow from; we saw the last Wind turbine factory shut down this year. High speed rail, well UKs current plan is to have our second route by 2030! Mean while, Spain, France, Germany are way ahead of us so again most manufacturing is outside UK; everything else is made in China. China is even driving harder at renewable energy than we are and they will do it far quicker, same with Broadband in Asia the governments there see it as a priority to get high speed wireless & fibre optics.

No 13 "I can remember the stop-go, IMF, seventies that ended up in the car crash of the winter of discontent and for ages now it just seems this is going to be much, much worse but in Londonland we're apparently permanently on the cusp of not-quite-but-nearly-business as usual..."

Actually, it was the "Winter of Discontent" that caused Old Bushy-brows Healey to go to the IMF, not the other way round !!

"Larnden" had always possessed a resilience not readily available to the rest of the country. In the good times, people flock in from the sticks, in the lean years, they just go home where living is cheaper. This gives London a flexibility that helps balance, to a certain extent, any ups and downs !! I believe that, this time, that flexibility has been stretched past breaking point and we Londoners are in for some fun and games soon !!

A visit to that Brand-spanking new shopping mall in Shepherds Bush will show you the truth !! They have more "footfall" than they could dream of. The only problem is they don't have the number of people digging into their wallets to buy something !!

No list of exports then?

Why do we still have a perception that manufacturing is somehow 'healthier' than services? Dont the sharp recessions of Germany and Japan, and the sharp slowdown in china (which would have been much worse if not for govt. control) put paid to this idea?

In the US, they still have some manufacturing...but as I speak the car manufacturers of Detroit are causing huge problems because they simply arent competitive. How would more of that be good for the UK? There is no point saying 'oooh we would like to do this' if you have no comparative advantage in it. And by the definition of comparitive advantage, you always have to have it somewhere. Where for the UK? Its the answer nobody wants to hear: services.

No 14 "Our underlying strength was clearly not as well founded as that of most other major economies."

Perhaps our "underlying" strength was just *lying*, whether it was under or over !!

It seems that our overly educated government had *not* read the story about "The boy who cried 'Wolf'" !! "We're best placed...", "The Green Shoots...", ad nauseum !!

I think nobody in this country was asking the question "why them and not us?" when other developed economies like Germany and Japan were plunged into recessions but at the same time Britain was enjoying a long period of GDP growth between 1992 and 2008.
Unfortunately endless economic growth is not realistically possible and periods of GDP contraction have to be expected. Taking into account that the long period of uninterrupted economic growth created bubbles and imbalances in the economy and well as the fact that the current recession is steep and global, I think that the British economy has done well so far. Unemployment is still moderate compared with other developed nations, public debt is still much lower than that of nations like Germany, US, Japan and Italy, therefore I remain cautiously optimistic about the future.
I don’t say that the recovery will be quick and steep. I don’t think that central banks and policy makers regardless what they say publicly want a quick and steep recovery either, because it could spur inflation which given the current massive liquidity existing in the markets could cause new imbalances in the national economies. Slow but continuous recovery is I think the best way out of the recession and could support sustainable growth. In my view this is the current path that British economy has taken and this is the correct path.
The process will not be easy but will unfold in the right way. You cannot address all economic imbalances accumulated in many years within 1 or 2 years. You need more time and as you do that economic growth will be weak. But this is normal.
Therefore, I do not share the hysteria fuelled by the media and certain politicians about the state of the economy. The economy has been much worse in the past and in periods where recessions had not been as serious as the current. Let’s be a bit more optimistic.

No other country is lumbered with Brown.

No 17 "This crisis has blown away any rationale for laissez-faire capitalism. Also, post-war history (remember the Marshall plans which got Germany and Japan running?), not to mention China and Korea, show how government spending, regulation and industrial support actually increase the national common wealth."

Where were you when the Marshall Plan helped China ?? On the way back from Mars ??

Anyway, China's current stimulus spendings are on *Infrastructure* projects, *NOT* expanding a bloated Civil Service. In fact, they are also in the process of slimming down their bureaucracy; by taking them out and shooting them, if necessary !! "Economic sabotage" is still a major crime and carries the death sentence there !! Strikes and riots are *firmly* dealt with !!

"Is there a credible half-way house for a modern economy? I think so, and I think Alistair Darling is looking for it. I would however, prefer we didn't have a doctrinaire monetarist Chancellor in No 11 next May to prove me wrong."

Well, the previous Chancellor, Gordon "I have saved the World" Brown, had damn near a decade and he still got it terribly wrong !! What do you expect the next Chancellor to be ?? Harry Potter ??

No 19 "So Alistair Darling is not quite telling the whole truth. The reason why our recession is more drawn out is because our economy is in much, much, much, much worse shape than anyone else's."

You actually want the "whole truth" ??? Muahahaha !!

@29 What is services to you that the UK can compete best against every one else? Please be specific what can we sell to others that they would want to buy from us? In services I imagine hairdressers, cooks, car mechanics, gardeners but I can hardly imagine the French coming across for a haircut! That's why having something to export is kind of important.

Sorry to rain on the "..UK falling behind the rest.." doom-gloom sayers, but, any suggestion France is recovering faster than the UK simply does not match up to the Economic statistics.

'France out of recession.' Someone is having a laugh!

France cannot have had the IMF or OECD check its Economic figures before Pres Sarkozy's Economic illiterates announced the good news. France has a unique way of 'bending' the figures whenever politically expedient (just look at its preparations for the Euro): For instance it has massive 'Social costs' but always 'Accounts' for significant sectors of that Public Expenditure as 'investment' and hides the true figures by a very loose and wide-ranging interpretation of the term 'growth'.
In reality, any examination of the figures reveals at best, France's Economy is closer to recovery than the UK.

I suggest the France figures for the last 2 quarters are revisited in 6 to 8 months - - it is usual about that time-lag before the proper, validated numbers have been crunched and an honest picture of the French Economy is actually recorded!

The UK Economy is still in recession, but unlike France at least the figures are genuine - - there is a general upward trend (despite a couple of sectors being almost dormant) - - the next quarter will see the UK emerge from the morass although obviously there is a long way to go before the whole Economy has picked up.
NuLab have led the UK into this dreadful Economic mess and deserve the chasing their getting for being so slipshod with Regulation of Banks and Investment businesses plus the Public' Taxes: That said, I have yet to see any proposals since the 'crash' that offer any genuine alternatives to the policies in place.

Of course, like France , the UK could just 'invent' a 'recovery' and rely on 6 months down the line there actually is one underway, but, it is an ill-advised sleight of hand with the British Economy which traditionally does not have the 'secrecy' and 'double-accounting' so familiar at the Elysee Palace.

Mr Osborne the Shadow Chancellor claimed today the entire Economic strategy of the NuLab Government was "..in tatters" - - for that to be an accurate assessment the whole of the 'western' World's economies would have to still be in recession and that is manifestly not the case - - it was an unedifying sight and sound as Mr Osborne's comments took on a near 'anti-British' tone in his efforts to do down the Chancellor. Cheap shots that the Nation could well do without. His remarks were 'Nationally' unjustified and not those of a Politician who deserves to be rewarded with high office anytime soon IMO.

No 23 "It would be interesting to know why Fathom Consulting are deemed a reliable source of information."

Perhaps they are already 6 feet under (fathom) !! :-)

No 35 "Please be specific what can we sell to others that they would want to buy from us? "

All else failing, there's always the world's oldest profession !!

Why them and not us?

You know the answer. It has something to do with life on debt over a decade.

@36 - ikamaskeip, your narrow mindedness is remarkable and it looks as if you don't let facts to hinder your preaching of message. In fact you make up your own facts. The report above says one thing, but instead you make up your own report and you go on preaching us about the evils that lay just across the channel.

You want alternative approach, here is one. The government should had let the banks sink last year. Used 500,000,000,000 to start 10 new banks that were there to do banking and lend to business and the people. Maybe we would also have some growth today! OK about 15 - 20 thousand very rich people would have lost lots of money and they would be looking for work today, but it would still be less than 2,700,000 people (and growing).

No 36 "The UK Economy is still in recession, but unlike France at least the figures are genuine..."

Ooh !! Are we counting the PFIs, PPIs and other off-balance sheet items, now ?? This should make good reading !!

"Of course, like France , the UK could just 'invent' a 'recovery' and rely on 6 months down the line there actually is one underway, but, it is an ill-advised sleight of hand with the British Economy which traditionally does not have the 'secrecy' and 'double-accounting' so familiar at the Elysee Palace."

Oh no !! That would not be very cricket, old chap !! We just say that we are "best placed to emerge from the recession" without any specification of exactly *WHEN* we will "emerge" !! Next year, next decade, next century ??

Doesn't all this sound rather like an optimist with constipation ?? "It's coming, it's coming !!", quoth he.....

Why is it that Brown and Darling just do not get it?
The British Nation is pulling in its collective belt, saving and spending as little as possible whilst waiting for the news on just how much we are going to have to pay in tax rises and public sector and yet more private sector job cuts.
The sooner we know the sooner we may start spending and bring growth back to the economy. Whilst the Labour idiots who got us into this mess keep running from the tough decisions we will not start to recover and it will not save them at the election either.
No more boom and bust!!! No the biggest ever boom and bust and nothing in the kitty to ease the pain!!

We've reached our limit on our national credit card.

Trouble is the government have just taken out a new loan to pay it off and are busy maxing it out in double quick time.

Our main problem is debt, and the solution is repayment. Not more debt.

Our other problem is lecherous parasites on the productive sector, namely the piggy politicians and bankers looting us as much as they can, the bloated public sector, and millions of welfare scroungers.

Roll back the state, and normalise interest rates to 5% to crash the housing market to make living here cheaper so we can compete with other countries.

35. At 7:22pm on 23 Oct 2009, ChrisArta wrote:
@29 What is services to you that the UK can compete best against every one else?
------------------------------------------------

In the U.K. a "Services" provider within our shores is more in tune with the provision of suppying their Services to single Customers, whereas by creating an Export Drive in Manufacturing is seen as providing a Service of supply in bulk production to places World-Wide.

The current problem in the U.K. is that because there is now so much Un-employment about, those amongst the Un-employed whom have a skilled Trade will in many Cases seek to set-up in business and work for themselves, thus thereby creating a situation whereby there is more competition in a strinking demand Sector for reduced Wages when bidding to supply these "Services", for any over-supply in any one area of Service strains both the capacity to earn a decent level of Wage, and fails too substain the existance of an pro-longed activity in Self-Employment.

This has been seen, and repeated up & down the U.K. in every High-Street whereby small and medium size Shops have gone out of Business due to either an over-supply of too many Shops providing the same businesses, and also whereby large Companies and Firms are offering large Discounts to ensure that they in turn survive, and even these larger establishments are losing out to internet, and online Competition.

The big Question is that if you are in any Business to provide Employment for the future, then this can only be done through the re-course [in the beginning ] to creating a climate for re-newed Exports, by suppying in bulk Goods that can be manufactured at the right price.

The problem is, that currently we in the U.K. do NOT have the capacity to drive any re-newed Exports, because either what is already being manufactured else-where around the World is made cheaper than it is in Britain, or/and also that we do not have enplaced the required Manufacturing based Industries making wanted products for the future, that will be be in demand both here in the U.K., or else-while abroad, for to get ahead in any Export Drive will require many Billions of Pounds in re-newed inward investments to be paid, and made up-front, which in any returns at the very lease will take a number of Years to show a profit, by becoming an established provider on the World Export Scene.

The most likely-hood thing that will happen in the next couple of Years we will be seeing a re-newal of those that can commit to this Area and can make a difference in future ideas, will go where the most money can be earned in the form of leaving Britain in another "Brain-Drain" from the U.K., while the U.K. will still be maintaining too struggle to pay back financal Debts to the IMF.

#35 Dear Mr Arta

You might like to look at Ropelink. Top class. One of the best in class. Used across the world. Indeed, had them hanging off a building I lived in abroad. This team had just come from the far east and were off to Europe. All brits.

Or indeed the guys I overheard in my local shopping mall - off to service some big boilers in the US because the manufacturers nationals 'don't like to travel'.

Or the 80 year old mechanical engineer I met who was off to New Zealand to work on an engineering project for three months.

Or the friend who provided consultancy to a housing project

Or the IT guys who supported a GIS system used overseas

Or the outfit selling information about 'new energy' - companies in the green sector.

Its small, but there's a start

Yrs Mrs Bloggs

It is all very well to expect exports to rise as the pound falls, but even mundane examples show how unlikely this is to happen.

I have just bought a washing machine. I was surprised to find that it is impossible to buy a UK made example. In the ten years since I last bought one UK manufacturers such as Hoover and Hotpoint have shut their UK plants.

If it is not even possible to buy bulky white goods that are UK made, what does this imply for UK exports? Instead I spent 600 pounds on a German made machine, presumably helping their economy out of recession... And every home in the UK will have to do something similar.

There is no spare capacity in the economy waiting to be utilised, the capacity has been destroyed. Hoover, Hotpoint, Dyson, etc wont be building new plants in the UK.

I think the future looks grim...

its not us, because we have a shambles of a government who basically havnt a clue what to do. at least nick griffin tells the truth, and its the truth that hurts.

Maybe looking to economists for the correct answers is the wrong place to start, much as I admire them and have a few of their books on my shelves.

Financial journalist Dan Atkinson often presents a mordant view of our economic prospects and maybe his book 'Fantasy Island' is nearer the mark.

I would suggest that three or four decades of politicians 'experimenting' with the education system has got a lot to do with it.

Some educationalists warned about it at that time when they said you could mess around with the education system but the results would not show for some decades, and they might not be positive.

The failure to develop the third 'technical' education stream has probably resulted in the most damage, in terms of denuding our intellectual capital, than abolishing Grammars has done.

For a developed economy, intellectual capital is the name of the game.

The late author Anthony Burgess (Clockwork Orange) was once asked how he envisaged this country in twenty or thirty years time, and Burgess said that he thought that it would have become a gigantic theme park for the pedilection of foreign tourists.

Unfortunately, thanks to our misguided politicians, we are heading that way.

ishkandar and #41.

Don't know who you referred to with "..we are best placed to emerge from.."?

My prediction is same as almost all UK Economists (they are not in the City which typically of their 'know-all' and 'contemplate-little' mentality were boosting share prices in advance of announcements) and the Chancellor's: Next quarter will see UK Economic struggle continue but it will be out of recession.
Worth keeping mind it was the City 'experts' who never saw the 'crash' coming - - what they know about Economic forecasting is unlikely to fill one side of an A4 Balance sheet - - avarice, over-exposure to unstable markets, excessive desire for short-term gains on the other hand and they become gold medallists!

So it's not 'constipation': It is sound economic/fiscal sense based on the figures just released and assuming the 'growth' in most sectors keeps to the same slovenly rate. The UK is not a shooting star of great prospects but neither is it the damp squib some analysts would have us believe - - again, keep in mind those Media analysts were generally no more useful than the City ones!

Previously, you were asking what the UK could sell to others - - clearly you are unaware 17% of the UK Economy is still 'Manufacturing' based - - I'm pleased to say Thatcher's wholesale butchery of G.B. Industry was incomplete.
It would have been far better to have been above 20% but what there is, is in the main exceedingly skill-based, high tech and in demand around the World. Far from the 'oldest' and up amongst the 'newest' professions.

On another Blog Jukka_Rohilla rightly pointed out the reckless short-sightedness of the failure by successive Conservative and NuLab Governments in the 1980s-90s to support UK's infant Technology companies such as Psion, Amiga etc. However, what is not generally realised is that this situation was reversed to some extent post-1999.

Of course the UK Economy faces very tough times and there are no doubt financial shocks still grumbling up through the system, but, we have to keep cool heads about all this (and Shadow Chancellor Osborne needs to mind his tongue as he can have a debilitating effect if he keeps dragging the UK down as he did today) or risk falling back into a catastrophe not seen since the 1930s.

rvpisneverinjureds and #47.

Re, "... at leats nick griffin tells the truth.."

Did you get that from a corn flakes packet? Probably not as that would involve opening it at the right end!

Among Griffin's gems of absolute tripe:
"Winston Churchill would be in the BNP.." - - Although a firm believer in Empire Churchill disavowed all racism and racist parties time and again in speeches.
"The Holocaust didn't happen.." - - Anecdotally I can say my father was one of the unfortunate British soldiers who discovered Belsen Concentration Camp & then of course there's those inconveniently missing 6,500,000 jews and 5,000,000 others, plus places like Auschwitz.
"BNP is not against coloured people.." - - Today the prize goon said live on television, "London has been ethnically cleansed of whites."
"Immigrants are 'living on benefits'/ 'taking our jobs'.." - - That would be the millions of jobs done by People who moved to G.B. and they or their British children became Nurses, Doctors, Pilots, Teachers, Lawyers, Police, Soldiers, Sailors, Airforce, Bar staff, Bus drivers, Shop assistants... and so it goes on - - what a total load of garbage to suggest they do not contribute to British society.

Well, which is it griffin-supporter: Do they live on the dole or have your job? Make your mind up! Oh sorry, still struggling with the corn flakes, are we!

" @ 29: What is services to you that the UK can compete best against every one else? Please be specific what can we sell to others that they would want to buy from us? In services I imagine hairdressers, cooks, car mechanics, gardeners but I can hardly imagine the French coming across for a haircut! That's why having something to export is kind of important."

Those are indeed services, but there are other kinds, which can be exported. To name a few which have been good for the UK, and are exported rather than consumed domestically:

Insurance, and indeed financial services in general. We sell far far more than we buy. This gets the most press attention.
The creative industries. Have you ever gone to europe and noticed how much music by British (and American) artists is played? Films are a similar story.
Communications (think BT, O2, vodafone; they have large presences in other countries)

Those are probably most important. Of course, manufacturing still accounts for a huge chunk of our exports. But I'm not suggesting shutting it all down, I'm just saying we need to adjust to the idea that services are probably the future for us even in export terms, and this is a general trend in developed economies. How can most manufacturers directly compete with china and india's cheap labour? If only for this reason, we can expect it to decline in economies with high living standards, and this is in fact happening.

This comment was removed because the moderators found it broke the house rules. Explain.

This comment was removed because the moderators found it broke the house rules. Explain.

Last night I asked whether GDP is a useful indicator given the size of government expenditure, the extent of government borrowings and the value of interest payments on these borrowins.

Today, having rooted about in another set of web published information, I have come to the conclusion that GDP is merely a derivative and I'm not sure about the ratings agency.

I am even less sure that I can be certain that when we compare GDPs that the methodology used is comparable or even accurate. Can I be certain that at least 10,000 businesses have been surveyed in any other country.

And its strange that as usual, when you dig and delve the detail is more enlightening. For example in Q2 electricity gas and water reduced proportionately more than other categories. This might be seen by some as a success - reduced use of natural resources.

And it seems as though we really might have saved more as households. That's what many have been advocating - reduce indebtedness.

Does it matter if we buy less stuff from overseas?

And to be frank, I'd turn off the street lights between 11pm and 6am. Well that would reduce expenditure on these areas, wouldn't it and would affect GDP but this might not be bad, overall.

So even if the measure is flawed, unless you are government, dependent on tax revenues, reductions in GDP need not be seen as failings. It might just mean we are not burning the midnight oil.

On that note, I'm off to bed, lights out.

35. At 7:22pm on 23 Oct 2009, ChrisArta wrote:
"@29 What is services to you that the UK can compete best against every one else? Please be specific what can we sell to others that they would want to buy from us? In services I imagine hairdressers, cooks, car mechanics, gardeners but I can hardly imagine the French coming across for a haircut! That's why having something to export is kind of important."

I thought the definition of Services (The Tertiary sector) is something intangible i.e. consultancy, accountancy , architectural services (Look at Norman Foster's current projects) insurance, music and films (not including the medium on which they are stored) or banking etc... so anyone in the world can use our services (no pesky shipping costs) not just our neighbours - I've heard of people from the Netherlands going on boat trips to the Metro Gateshead so even shopping is exportable - I'd like to see more manufacturing, it's nice to see 'made in Britain' but those German cars still need insuring and the ships that transport them to the U.S. - that car finance doesn't necessarily have to be provided by the banks in land of the brave though.

The services supply chain is too narrow to create real wealth across the economy.

It is impossible to compare services with say automotive manufacturing where the supply chain is very broad....

How many people do you know that work for the music industry, or supply the insurance companies or work for a company that supplies banks?

Of course the UK Economy faces very tough times and there are no doubt financial shocks still grumbling up through the system, but, we have to keep cool heads about all this (and Shadow Chancellor Osborne needs to mind his tongue as he can have a debilitating effect if he keeps dragging the UK down as he did today) or risk falling back into a catastrophe not seen since the 1930s.

-------------------------------------

On the subject of the 1930's, I have been watching BBC2 Newsnight where they were reflecting upon events leading up to the past Wall Street Crash of 80 Years ago, too the Day, when many small Bank's in America went under.

I also hear that tonight in our current Recession of 2009, that no less than 100 small Bank's across America have again also gone under, which only sharpens the arguement as to, is this current Recession still at the Starting-Gate, for some Economies around the World, and also, if America catches another cold with any Double-Dipping in their Economy, then where will this lead us too in the U.K. when most of our Profits in Banking is determined by Long-Term Loans, and Investments?

Also, what will may be the next thing for us to contend with?, for will it be a Trade War in Price Protection whereby Countries around the World will seek to promote Trade Barriers looking to keep inward Investments at Home to simulate Growth?

I asked many months ago for either Robert or Stephany to please look into where the QE money was being spent. Simply because the Bank of England "didnt know" where the money was being spent. It doesn't take a fool to realise, like the bank bailout money, this money can quite easily be put into selected hands rather than the most deserving/needy hands - much like a lot of funds or schemes, given to those chosen rather than by right/circumstance.

I'm feeling pretty down to be honest

AGAIN the time has well gone by for any media intervention or populist intervention to try and strike the right balance. The money HAS been spent.

The reason I am feeling so down is because I read an article on FT Alphaville, which I sometimes read just to get a feeling for what is happening broadly in the markets. I have been very much confused as to why QE existed and why there is no direct aid to business - solely the capital markets. I think THIS explains very much why and graphically states the "public" are nothing more than cattle.

There is a link on the site but it wont get past the moderators so I took it off.

May 27, 2009
Liquidity drowns meaning of 'inflation' By Henry C K Liu

"What we will have going forward is not Weimar Republic-type price hyperinflation, but ***a financial profit inflation in which zombie financial institutions turn nominally profitable in a collapsing economy. The danger is that this unearned nominal financial profit is mistaken as a sign of economic recovery, inducing the public to invest what remaining wealth they still hold, only to lose more of it at the next market meltdown, which will come when the profit bubble bursts.*** ...

... ***Debt denominated in fiat currency is borrowed wealth to be repaid later with wealth stored in money protected by monetary policy. Bank deleveraging with Fed new money cancels private debt at full face value with money that has not been earned by anyone, that is with no stored wealth. That kind of money is toxic in that the more valuable it is (with increased purchasing power to buy more as prices deflate), the more it degrades wealth because no wealth has been put into the money to be stored***, thus negating the fundamental prerequisite of money as a storer of value. ...

***Central bankers are savvy enough to know that while they can create money, they cannot create wealth. ... The solution then is to make the working poor pay for the pain of inflation by giving the rich a bigger share of the monetized wealth created via inflation***, so that the loss of purchasing power from inflation is mostly borne by the low-wage working poor and not by the owners of capital, the monetary value of which is protected from inflation through low wages. Thus the working poor loses in both boom times and bust times. "


Then we have the Bank of England explanation of QE,,, which basically says they are looking after the assets of the very rich IMHO. After all,,, if the rich are given the ability to raise money on what were potentially bad performing assets they can then reinvest that money in what amounted to a fire sale - literally out of the frying pan and into the champagne bath.


Moving targets, QE edition
"Charlie Bean, the Bank’s deputy governor for monetary policy, has just made a speech called “Quantitative easing: An interim report”, in which he rather moves the QE goal posts. ***The policy, we are now told, is not so much about getting banks to lend. It’s more about pushing up asset prices to repair banks’ balance sheets.***

Here’s the relevant bit from the speech:
"Fortunately, increased bank lending is not necessary for Quantitative Easing to work. Indeed, it was precisely because the Monetary Policy Committee expected the additional monetary injection not to stimulate bank lending directly at the current juncture, that the Asset Purchase Facility’s purchases were targeted at assets held primarily by the non-bank private sector. So if the Asset Purchase Facility buys gilts from pension funds or asset managers, they will then have to look for another home for their money. As it is not very rewarding just to hold it on deposit, they are likely to look to put their money into other assets, including equities and corporate bonds. Thus not only does the price of gilts rise as a consequence of the Asset Purchase Facility’s initial purchases, but also the prices of a whole spectrum of other assets. That in turn lowers the cost of non-bank finance and encourages increased corporate issuance. ***Also the rise in asset prices increases wealth and improves balance sheets.*** In this way, Quantitative Easing helps to work around the blockage created by a banking system that is still undergoing a process of balance sheet repair. ..."
--------------
Asset inflation got us here, the BoE/Treasury policies of ZIRP/QE are driving the UK straight back there.

Morning Stephanie,
my what an introverted bunch the British are.
Why are we not doing as well as France and Germany (didn't they refuse to follow our dear leaders proposals at the G20)?
Car purchase schemes benefit the 80% of imports that we have (Mandelson was told this but nevermind eh).
Double standards were applied with regard to banks loaning more money (ie we want you to loan more but you must also increase your liquidity ratios).
In the last year I've listened to our Government and gone out and spent more cash with local businesses because I would like to support them and see them survive. However, I'm now being prevented from spending my cash (not credit) on the internet by the Bankers deciding to introduce 3D secure (a commercial product). I have no intention of signing up for this ridiculous scheme (it's badly thought out and poorly implemented).
So, I'm sorry all you internet vendors, I will not be shopping with you and you can tell that to your host banks which enforce these schemes.

Now we move forward a couple of months, Petrol is extremely expensive (due to the weak dollar not to supply of crude oil), the VAT cut has to be reversed and maybe increased by 2.5%, most companies will be putting forward their budgets for next year and in the industry that I was in it was common for layoffs/redundancies to occur just before Christmas (nice). If/when the BOE put up base rates then many households are going to find it hard to meet their utility bills because of a Government sponsored free-for-all with utility pricing, and of course these smart (and not so smart) meters will have to be paid for (and they will not be financed by the utility companies).
Then we have Government levies to pay for faster broadband.
I think the November Budget speech will have a few shocks for ordinary households (Gordon has to claw back some money from somewhere as they can't print it fast enough at the moment).
Now as an economic expert, Stephanie, do you think we will have positive growth figures for the next 3 Quarters (not a chance in my opinion)
As for the comments on the stock market earlier, stock markets look ahead maybe 3 months, from what I'm seeing in volatility indexes, the smart money is heading for the exit, expect the markets here and in the USA to take a sharp dive soon as the smart money gets out.
It was ever thus.

48% of mortgages in the UK were self cert in 2007. Yet less than 10% of the population are self-employed.
Thats an awful lot of people lying about their income on historically high multiples.
No wonder UK banks are marking mortgages and their derivatives to 'fair value' rather than to market.

The BoE can't raise rates without causing rising mortgage defaults invoking govt guarantees etc.

Admittedly a £ carry trade would remove some of the 175 billion QE, but we aren't a manufacturing giant like Japan. It takes decades to build up the manufacturers and infrastructure to make that work.

I'm afraid the Tories are right. Public spending has to be cut massively and the costs our employment legislation puts on job creation removed. We really have no choice. We'll all have to be self employed soon.

No 49 "Don't know who you referred to with "..we are best placed to emerge from.."?"

It was our former Chancellor and current Glorious Leader who said that !!

"Previously, you were asking what the UK could sell to others - - clearly you are unaware 17% of the UK Economy is still 'Manufacturing' based"

Firstly, I'm not sure where your figure of 17% comes from and how old it is, since in the last few months that landscape changed dramatically.

Secondly, how much of those 17% are subsidiaries of foreign companies that manufacture for sale in the UK instead of for export ??

No 51 "Communications (think BT, O2, vodafone; they have large presences in other countries)"

Both BT and O2 have a very small presence outside of the British Isles and Vodafone, while having a bigger presence is on the retreat since they, too, went on a leveraged buyout rampage before getting caught in the crunch and had to sell off a substantial part of their operations.

"How can most manufacturers directly compete with china and india's cheap labour? If only for this reason, we can expect it to decline in economies with high living standards, and this is in fact happening."

Then there is the fact that both China and India are going up the food chain and have "hived off" low-cost manufacturing to many other lower cost countries, how will Britain compete ?? Japan started as a low-cost manufacturing economy and is now out-manufacturing Britain in almost all areas. China is going in the same direction.

For this reason, British manufacturing will have some way to fall unless dinosaur sectors are allowed to fall by the way-side and new, higher tech manufacturing take their places !! The living standard in Britain will fall anyway when both the money and the credit run out !!

No 54 Rather as I have said. :-)

"For example in Q2 electricity gas and water reduced proportionately more than other categories."

Q2 is usually the "doldrums" before the tourists season in Q3, hence the fall in usage. Perhaps a comparison across the years might make it more meaningful.

In addition, there are all those businesses that have shut down and that, too, will influence the figures. For example, there have been an accelerated shut-down of pubs and restaurants who are major users of electricity and water and gas (in the case of the restaurants) !!

"And it seems as though we really might have saved more as households. That's what many have been advocating - reduce indebtedness."

We may be saving more, but I doubt it !! However, there has been clear evidence of paying off debts, especially mortgages. And then, there are the repossessions that will "reduce indebtedness" too !!

"So even if the measure is flawed, unless you are government, dependent on tax revenues, reductions in GDP need not be seen as failings."

But less tax means that there's less money to splurge on pet political projects and feed the voracious appetites of the Civil Service !!

"On that note, I'm off to bed, lights out."

Goodnight and rest assured that, even as you sleep, your pound is working hard to devalue itself !! :-)

No 55 "...I've heard of people from the Netherlands going on boat trips to the Metro Gateshead so even shopping is exportable"

I've had Norweigian friends doing the same too but all that is balanced by day-trippers to Calais by the van-loads, stocking up on booze and fags !!

"it's nice to see 'made in Britain' but those German cars still need insuring and the ships that transport them to the U.S. - that car finance doesn't necessarily have to be provided by the banks in land of the brave though"

They are mostly insured by German companies and shipped by shipping lines other than British owned ones !! And car finance in the Land of the Fee (NO, that's NOT a spelling mistake !!) are usually provided by the manufacturer or an allied company !! The interests and commissions and *fees* on these were what kept American car makers going for longer than they would have otherwise !!

No 56 "How many people do you know that work for the music industry, or supply the insurance companies or work for a company that supplies banks?"

Fixers ?? Drug peddlers ?? Muscle ?? PR ?? :-)

#50 grow up, your very rude.griffen isnt liked because hes not pc and he tells the truth.As we are talking business here how about asking grifen about economic problems and how both labour and tory governments have destroyed the uk economy.He made straw look what he is a pygmy.

This comment was removed because the moderators found it broke the house rules. Explain.

Why do people assume that topsoil is necessary for growing plants/vegetables?

Given an adequate source of electricity, a small amount of water and some nutrients, one could use aeroponics .

No 68 "Given an adequate source of electricity, a small amount of water and some nutrients, one could use aeroponics ."

I've actually both aeroponics and hydroponics and they are not quite as advertised !!

Aeroponics was because my dad had this craze for orchids and a great many of them thrive naturally in the air. Some exist in very, very tall trees, some 50 or so meters off the ground !! I tried growing beans, tomatoes and potatoes aeroponically but the yield is not quite as good as in light to medium soil !!

Hydroponics is as advertised physically and technically but the costs were far too high !! The yields were pretty good though, so I presume that can be used when the needs outweigh the costs - on interplanetary ships, for instance !!

Meanwhile, back in Blighty, farmers are still being paid *NOT* to grow food, in order to keep the prices high !! One of my money-making schemes is to buy some farmland and apply to the EU to *NOT* grow all the foods that they want *NOT* grown. That way, they'll pay me lots of money to *NOT* do any work, so I can spend my remaining years surfing the net !! Ain't life wonderful !!

And people wonder why the European economies are not doing so well as the Asian ones !!

I do so love the definition of "coming out of recession".

Just because you're no longer on the down slope doesn't mean you're not stuck in a hole and much worse off than you were previously.

When we eventually see things levelling out, we may not be falling further into recession (although some will feel the pain later due to various time lags), but only by the economist's definition would really see us as being out of it.

Of course it could be argued that we may be approaching the new norm (once public spending is re-balanced) and the bubble fuelled peak was delusional and unsustainable and as such what we have been experiencing is a correction to that.

Perhaps if we could determine an idea of the sustainable long term level of the economy we would know whether we are now above or below where we should be.

As observers said at the beginning of the collapse, the UK was one of the worst placed countries to deal with recession due to our over reliance on financial services and our dependence on debt.
Some of this was the product of atrocious management of the economy and some the result of strategic short sightedness by politicians of both major parties (e.g. the narrowness of the economy and our dependence on importing necessities).

The oil spike and resultant changes to flows of funds is not the cause of the economic problems. That must be true, for otherwise nations would be controlling consumption, it being better to take bus and train before going broke and wrecking your economy, so what is going wrong?

UK's problem have very little at all to do with that spike in price, we produce the stuff. Honestly, it is a confusing muddle of data and perception that exists and is this really good enough?

But whatever, it is time to consign the petrol engine to the scrap heap and move on. It is no longer worth the trouble it causes us in UK. It is not as though our lives depend on it. They really don't. I was very surprised by the lack of sympathy, support even, for the recent Saudi appeal for recognitions in respect the future and climate concerns. Rather rude from the Brits really, a li'l daft perhaps also. Still we are rather focused elsewhere at the moment. Who is going to pull the economies out of recession, how is it going to occur. Are we going to pull lnvestors and Trade out of hats..... that's actually where rabbits originate.

no 71 "But whatever, it is time to consign the petrol engine to the scrap heap and move on."

But not until it can be replaced by something that is more ecologically sustainable !! Electric engines are not sustainable currently because of the need of high-capacity batteries and frequent re-charging from "dirty" electricity !!

Hydrogen engines are even less sustainable since the manufacture of the containment "bottle" is prohibitively "dirty" and there is still no guarantee that hydrogen will not "evaporate" through the containment bottle and simply blow up !! Perhaps Bin Laden might want to invest in that as part of his strategy to blow up the West !!

And I'd love to see some one walk from John O'Groat to Lands End just for a one-hour interview and then walk all the way back again !!

The $64 trillion (quite literally) question is "what will sustainably replace the petrol (and the diesel) engine" ?? Solve that and you'll be the richest man in the world !!

#27 ishkandar - "Actually, it was the "Winter of Discontent" that caused Old Bushy-brows Healey to go to the IMF, not the other way round !!"

Really? I thought: IMF 1976, Winter of Discontent 1978/9.

From the BBC on the subject: "Jim Callaghan moved into 10 Downing Street in 1976, and was immediately told the economy was facing huge problems, according to documents just released at the National Archives. The world's financial markets were losing confidence in Sterling as the British economy stumbled. The Treasury could not balance the books. At the same time, Labour's strategy emphasised high public spending which it appeared could no longer be paid for."

Deja vu, anyone?

Certainly there was plenty of discontent around all through the Seventies. And the Eighties for that matter, but that's another story!

No 73 "Really? I thought: IMF 1976, Winter of Discontent 1978/9."

I do believe that you are right. I can only blame that on a failing memory !! :-)

Now that I've looked back more closely on that situation, I believe the cause of the 1976 IMF intervention was the loss of confidence in the Sterling and the subsequent devaluation !! The then government simply over-spent and risked all to avoid cuts despite warnings of a devaluation. The rest, as they say, is history.

[Unsuitable/Broken URL removed by Moderator]

"Deja vu, anyone?"

Damn right, it is !!

You can go all the way back to one Margaret Thatcher to find the seeds of the UK's slow crawl out of this latest recession. Her, and the policy of her government was that the UK doesn't need manufacturing, and in that, as in her suggestion that there is no such thing as "society" she was 100% wrong!

Germany fell rapdily into recession because they have a manufacturing industry, and probably too smaller service sector. Because of their reliance on manufacturing, their (rather more generous) car scrappage scheme created a demand for product built in German factories. In the UK, a Kia main dealer told me just 2 weeks ago, something like 70% of all the cars bought under the UK's scheme were Korean (Kia, Hyundai, Daewoo / Chevrolet) and although it has boosted sales, all it has actually achived is to stoke the imbalance in our foreign trade. It will be much easier for Germany to grow their financial services sector, especially as they have the advantage of the Euro, than it will be to rebuild manufacturing here in UK where we suffer from NIBYs and antiquated planning regs.

Ever since those Thatcher days I have been wondering how the UK would sustain an economy where little was manufactured, and factories torn down to be replaced by DIY stores and shopping centres. Where would the "real wealth" be generated. Service industries, especially financial services are little more than making money by juggling cash about - it ain't the real economy, and ain't sustainable.

The future worries me. The UK had / has the opportunity to build new industries so serve the "green economy" - but because of the shortsight attitudes of NIMBYs and local councils, every wind farm that is suggested is fought tooth and nail, and understandably, the wind turbine mnaufacturer sees no advantage to manufacturing them in the UK - so closes down their UK operation. When the UK wants turbines, it has to look abroad = more imports, and yet more deterioration in the balance of payments = weaker pound = higher import costs = inflation = higher interest rates = recession!!!!

Something has to fundamentally change, but I am not sure that any of the main political parties (or the BNP!!!) actually gets it. If they do get it, then they aren't willing to do anything about it.

Why them not us?

I think that Robert Peston has already provided the background to answer this question
>>>>>>>>>>>>>>>

'Should the banks back Britain?'

Robert Peston | 09:15 UK time, Tuesday, 7 April 2009
>>>>>>>>>>>>>>>>
and also see
>>>>>>>>>>>>>>>>

Total and the Wimbledon effect
Robert Peston | 12:51 UK time, Monday, 2 February 2009

'But Wimbledonisation - the notion that Britain is the winner even if none of the economic players are actually British - became official dogma.

But, as Sir John Rose said two years ago, if Britain has become a giant "aircraft carrier" for foreign companies, jobs won't naturally go to British workers - unless British workers have a massive competitive advantage.

This is how he put it: "I think there is a growing recognition that if we believe we are going to be a knowledge-based economy, then not having a world-class education system is a disadvantage."

>>>>>>>>>>>>>>>>

Nautonier.
How painfully poignant are Robert Peston's comments now as we see how the structure of the UK economy or rather the wreckage left by 12 years of Labour's governance has left the UK economy in tatters.

and also see attached link on the truly great man's views on this link:

https://www.telegraph.co.uk/search/?queryText=churchill+colour&Search=Search

The Telegraph Newspaper quotes Sir Winston saying:

'In the recording of his remarkably prescient speech at the college the wartime Prime Minister declared his wish for Britain to continue as a world leader in the fields of science and technology.

He said: “More than any other country in the world, Britain must rely on the enterprise and trained ingenuity of her people. Since we have neither the massive population, nor the raw materials, nor yet adequate agricultural land to enable us to make our way in the world with ease, we must depend for survival on our brains, on skilled minds that are at least proportionately equal to those in the United States and Soviet Russia.'

>>>>>>>>>>>>>>>>>>>

So when the government, public and private institutions write off our young people and unemployed because e.g. they are obsese and/or have a regional accent and/or live in social housing and consign them as second class citizens to receive JSA without any concerted vocational and other training and British companies are actively encouraged to have a direct preference for imported labour, this is entirely against what the great man was talking about.

This is not just a matter of the cardinal economic sin - waste of human resources - it is also a matter discrimination against large swathes of the British population with a huge and growing costs associated with it as these people diminish the UK tax base.

These are just some of the reasons why the UK is lagging behind other EU countries and the gap will get much wider in my view unless we see radical reform of the management of the UK economy.

When the UK government automatically looks overseas for the provision of some if not all of UK's own marine, auto, aero, energy, rail, techonology when the UK was the cradle of industrialisation, innovation and ingenuity - its shows that the current UK government has completely lost the plot.

We need to rebuild and restructure our UK economy and it will take many years e.g. 20-30 years to implement this and we should plan and start when the general election is settled (when the 'danger-mice plague' government is removed).

This year record numbers of students in England have been unable to get places in English colleges and Universities - this is completely against what Sir Winston said that we needed.

Agree with LondonHarris; it is the long term lack of industrial strategy that is the problem for UK. We are simply years behind Germany and France on industrial, renewables and general infrastructure. Look at us, having to buy French nuclear power, we still cannot get on with building renewable energy schemes because of NIMBYs and red tape; Severn Barrage, Wind farms and our second high speed rail line we might get to in 2030!
Meanwhile China and other asian countries are quickly outpacing us as well.

Isn't it funny how many bloggers really *want* things to be worse than they are?

As Stephanie's excellent article points out, the UK experience is neither the best nor the worst of the major Western economies, all of which have suffered the effects of a global crisis. Blame for the crisis cannot be attributed to any one government or individual. It is absurd to suggest that Gordon Brown (for example) is responsible for the bankruptcy of American banks, or the collapse of Japanese exports.

It would be better to think of politicians as fairly ordinary people, without any specialist knowledge, who rely on experts for advice. They react to events, rather than being "in charge" of every minute detail of the economy. If the consensus of experts does not see a problem coming, then one can't expect the politicians to have magical powers and see it. In my view, the government has taken the right tactical decisions so far in response to the crisis.

If you don't like the way politicians have responded, then look for someone with a better economic philosophy. What's to replace the end of laissez-faire capitalism? The Tories??!!

Thanks to Garthking #17 for a very level-headed post.

Hi Stephanie

I think the real issue here is the boasting by Gordon Brown when he claimed we were uniquely placed to come out of the recession and that he had "saved the world". If what he said were true shouldn't we be at the front of the pack not debating if we are at the rear?

We are back on the issues of all the deficit spending, interest rate cuts and QE aren't we? What if they are not working?

To introduce an old Keynesian concept what if we are in his liquidity trap? If we are it would have been better if the Bank of England had used a modern version of his suggestions rather than being "clever" as they have with QE.There is a danger they are merely stoking another boom....

Jadddean and #52.

This is not really the Blog Article to debate these things, so, the reply is short.

Re, "..Try to be more critical of what you are told.."

You are serious aren't you!? You are saying it is all a myth - - the Holocaust etc. - - it was all the fault of the 'war' and 'Russians'! Plus those nasty Democratic Governments conspiring across the World to keep the ordinary People in their place with fear of socialism!

According to you the "DPs" (Displaced Persons) were all returned to east and central Europe after the war in Europe!!!

Here's some information on which to use that 'critical' faculty of yours:

A Fascist dictotorship called Nazism put those thousands of People into Belsen Concentration Camp - - they died of maltreatment and neglect - - they starved, were beaten, hung, shot, worked to death and the remainder so pitifully weak then caught diseases such as Typhus and died.
If they had not been forced into that Camp and literally dozens like it by rascists they would not have died in them.
Belsen was a Labour Camp; all the Labour Camps were linked to central Extermination Camps - the Death Camps using Zyklon B Gas in specially adapted Chambers were at Auschwitz-Birkenau, Belzec, Chelmno, Sobibor, Treblinka - - with the Rail lines taking these 'DPs' having 'priority' over all other rail traffic inc. the German Armed Forces!

It was not Allied bombing, or the Soviets, or some con-trick that killed them (in which all those black and white films of the invasion of Poland, bombing of Rotterdam, conquest of West Europe, Blitz, Dunkirk, Operation Barbarossa, conquest of East Europe, D-Day, bombing of Hamburg, Dresden, Stalingrad etc. were all reality, but, according to people with ideas like yours, some 'international conspiracy' then made up the films about deaths in the camps!?).
They died because of callous, unthinking, uncaring, mindless, brutal, vicious so-called Humans who based their 'racial superiority' ideology on spurious, nonsensical, cobbled-together little gobbets of history and then called it fact. Much as you have!

History is full of horrors - - that Stalin's Soviet regime herded millions of USSR Citizens into Gulags is also fact - - it makes no difference to the grotesque fact of the genocidal policies of the Nazis. The victims of the Holocaust - Jews, Gypsies, Homosexuals, Mentally and Physically challenged, epileptics, 'political enemies of the State', and the 'anti-social's' who could be anyone from an admirer of Jazz music to Dali's Paintings to Thomas Mann's books were also herded into Camps and perished in their millions.


Jewish dead:
Polish and Soviet area (i.e. Baltic States, Ukraine etc.) - 4,565,000 approx
Germany - 225,000 approx
Austria - 65,000 approx
Czechoslovakia - 277,000 approx
Hungary - 402,000 approx
France - 83,000 approx
Belgium - 24,000 approx
Luxembourg - 700 approx
Italy - 7,500 approx
Netherlands - 106,000 approx
Norway - 760 approx
Romania - 40,000 approx
Yugoslavia - 60,000 approx
Greece - 65,000 approx

Incredibly, one could say, those that went straight to the Gas Chambers were spared! Spared from the gross pseudo-science 'experimentation', beatings, gruelling work, starvation, illness, public floggings and hangings...

It really does behove someone as misinformed and misled as yourself to make an extra effort "..to be more AWARE of the REALITY what you are told.."!

#78

So why were was the UK considered the worst placed economy to deal with the effects of global conditions?

Simple facts:
- high pubic sector deficit even in the good times (so no "cushion")
- high dependency on asset speculation for notional wealth creation
- heavy economic dependence on financial sector
- massive reliance on debt
- high visible trade deficit
& you call that good economic management?

The debt and asset bubble factors were always going to cause a multiplier effect in the event of a downturn, whilst the CDOs and resultant credit squeeze made things worse it was inevitable that any downturn would hit us hard.
Of course people with concerns couldn't express them fully, although there were a lot of warnings about debt and the property bubble, as reality would've resulted in corrections in a downturn occurring much earlier, without the trigger of global economic cycles.

It is true that most politicians lack expertise in most things other than getting elected, but that doesn't stop them trying to claim the credit for anything that goes well. Of course that may be considered an indictment of the electorate , all we ended up giving people who weren't up to the job power because we wanted to believe things were better than they are.
The old adage "if it looks too good to be true, it probably is", probably applies to our wilful ignorance in living beyond our means.

"According to you the "DPs" (Displaced Persons) were all returned to east and central Europe after the war in Europe!!!"

Yes, that was the formal agreement.

It is very difficult to be objective when so much was at stake, e.g. the creation of a Jewish state in Palestine. You must try to see what you have been today in terms of geopolitics.

Look at the cases made today for WMDs in Iraq, Iran, N Korea etc. Look to the case made by US PR agencies for the Iraqi solders and baby killing in incubators etc...

There were 15.3 million Jews in the world in 1933 (Jewish Library source). About 6.5 million were in Poland and Western Russia alone. Today there are about 14 million. East Europeans have TFRs in the 1.1-1.3 range, the rest of Europeans not much higher. Look into what that means in terms of population size and change (with 1.1 a population halves in 30 years). Look at how some cities in Europe and even in the UK have shrunk. The number of Jews in UK form 1930s to today has gone down too, from over 300,000 to about 280,000. Was there a holocaust in some English cities?

I am not urging you to deny that deaths or deny war crimes (these always happen in wars) - just to think critically a bit instead of believing all that you are told. Note that today, neither Israel, nor the USA are subject to the UN ICC - ie. the war crimes 'legislation'/rules).... Why not? Note that Israel today is not a signatory to the Nuclear Non-Proliferation Treaty.... why not? Note that racism is something that other groups get up t o, not Israelis/Jewish people...

Politics is a very dirty competitive game. It sometimes gets very very dirty psychologically.

Ishkandar and #61.

The 17% is accurate upto 2007-08 and again, contrary to a lot of the nonsense you are trotting out, the Manufacturing sector of UK has not declined in the last 12 months - - it is the Banking and Investment sectors that took the biggest hits (e.g Insurance, Mortgages, Stockbrokerage etc.) - - whilst many Industries when to short-time working or reduced staff the mass rise in 'Unemployed' came from Offices (i.e. white not blue collar jobs).

I really think you need to settle down a bit, ignore the News paper Headlines, and take a long look at the UK Economy plus the British Isles as an entity.

There are 60,000,000 Citizens and on a daily basis despite the terrible downturn on average some 24,000,000 go to work 4 or 5 days per week (that inc. 'shift-work) - - the majority are Full Time employees but of course many are Part-Time and across the board they are struggling compared to 24 months ago in terms of Pay and Conditions. Productivity on the other hand has hardly been affected - - the figures for the 1st and 2nd quarter of the Fiscal year reveal UK Companies maintained a level of production required to meet the much lower demand both within the UK and Overseas.

Reading your stuff you pack it with all these glib references to firms only being involved in UK or sub-setions of Foreign companies: Don't get misled by the extremely hard times reported for the Automative industry, British Airways, Mining etc. They are heavily Capitalised - Labour intensive industries the Media always refer to and yet are relatively minor parts of the UK's overall Economy (though not of course to those working for them). BA is the 'Flag-ship' airline, but, look around you - - Virgin are opening up a Bank firm as part of a business portfolio that traverses the World - - the UK has many such Companies.
It may be of interest for your 'glibness' to realise UK based firms own or have a part-share in some 14,000+ Companies on mainland Europe and that the UK in turn, even last year, attracted some 9 billion Pounds worth of inward Investment.
In point of fact you are entirely wrong about BT, O2, Vodaphone etc. as any glance at their Company Records reveals - - they are typical examples of UK firms with significant interests-connections in overseas business - - and you will find the same with others. Yes, they are going through tough times and yes some still yet fold if the Financial squeeze and falling demand for their products continues, however, it is important to remember this is also a factual reality for Businesses across Europe (why else would Ms Merkel be bending EU subsidy regs to ensure Opel survive!?).

It is important to grasp the fact the UK is not alone in undergoing a very severe economic crisis. This Blog Article is as misleading as most of the Journalism on this cyclical catastrophe - - it has struck everywhere from China to USA to India to Brazil to South Africa to the EU and to the UK - - emerging from it was never going to be easy.

However, following 4 sets of very bad quarterly figures for one set of Quarterly figures (unverified and certain to change 3 months down the line when the final balance sheets are in) to be used by BBC and other Media plus people like you as representing the be-all/end-all of the UK's Economic prospects is frankly very poor quality judgement indeed.

I am willing to come back on this topic next June-July and we will will look afresh at the UK's figures and see if this 'quarter' really was as bad as you and others would have us believe.

How about it Ms Flanders - - want to REPUBLISH this Article in 8 months - - let us just see then whether or not "Us" i.e. this UK, is really slower recovering than "them", i.e. the EU zone?

Bet you a pint of whatever is your favourite tipple (NOT Chablis!) the UK figures have significantly changed for the better in that Economically very short spacve of time.

JadedJean and #82.

There is no point in attempting serious debate with someone so fed on distortions as to think WW2 was about the "..creation of a Jewish State in Palestine..".

You are so absurd in that first statement as to negate any likelihood of your being open to genuine points of fact on anything else.

I will not reply any further as I agree with the dictum of Thatcher with regards to BNP supporters, "Starve them of the oxygen of publicity." You'll get no more oportunity from this Contributor.

erratum (#82) "You must try to see what you have been told in terms of geopolitics." Politics is about mass manipulation what people think and do, and its modus operandi heavily invests in the techniqes of psychological warfare/public relations. Note his height (feminized brain, CYP21 polymorphism? - The female strategy is the lure - deception - think makeup etc - it is unwittingly done).

You must try to see what you have been told in terms of geopolitics.

The UK economy is in big trouble because it produces little in terms or real and sustainable wealth creation, but is overly reliant on the financial services sector. The fools-led financial services sector itself has failed spectacularly in its long-term planning and showed no understanding of economic cycles (there are very few exceptions). The financial services sector has led the country to the edge of bankcruptcy. (Rich) fools leading the financial services sector and servants to the financial services sector leading the political parties, how do you expect the UK economy to prosper? In addition, the UK is closely linked to developments in the US and matters there are even more corrupt.
You can educate yourself about a long list of Wall Street tricks
by reading the following article:
https://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle/print

To summarise a key insight of this article: if the real economy doesn't produce enough mega-profits to keep the Wall Street fat cats happy, then they will invent an endless and ever increasing stream of artificial products which they trade in ever increasing quantities using borrowed money, until, inevitably, the whole house of cards comes crashing down. The key players usually survive and most have squirreled away enough profits during the boom years to secure their private wealth for life. Who are the main losers? The middle classes and the real economy starved of affordable credit.

#83...ikamaskeip

BT, Vodaphone etc rely almost 100% on overseas developed and manufactured hardware. Your broadband connection will be courtesy of a DSLAM made by the French company Alcatel and their network is dependent on the use of network switches made by companies such as CISCO (American). Vodaphone will sell you a phone made by an overseas company (there aren't any UK ones) ....

This is where we loose value..

This comment was removed because the moderators found it broke the house rules. Explain.

The 17% is accurate upto 2007-08 and again, contrary to a lot of the nonsense you are trotting out, the Manufacturing sector of UK has not declined in the last 12 months - - it is the Banking and Investment sectors that took the biggest hits (e.g Insurance, Mortgages, Stockbrokerage etc.) - - whilst many Industries when to short-time working or reduced staff the mass rise in 'Unemployed' came from Offices (i.e. white not blue collar jobs).
----------------------------------

A few months back TV Current Affairs programmes were citing that here in the U.K. it was White Collar Worker's that were being mainly made redundant as our Recession progresses.
However, Yesterday it was reported that in fact it was Blue Collar Worker's whom have been more affected sofar in this Recession.

Of course the Answer lays somewhere between, depending upon in which regional part of the U.K. that it is that you reside, for as things stand today it matter not regardlessly as to whether you fall into either the White, or Blue sectors of U.K. Society, for if you have lost your Job you are ALL in the same Boat of Un-employment, and this remains however you look at things is set to continue and grow whatever Government we have in Power after the next General Election when a further tightening of Public Spending will be made to pay off our National Debts to the IMF that is growing by the minute.

Don't also forget however, that if we extend further Quantitative Easing, ( and this seems very likely now ), then any extra ammounts will put further pressure on the value of Sterling, which will add pressure to the Trading value of the Pound, which in turn will make Imports in raw materials more expensive, and this will also further lead to Companies going under, thus creating MORE Un-employment.

LondonHarris and #89.

I was right with you until, "..tightening of Public Spending will be made to pay off our National debts to the IMF that is growing all the time.."
Assuming the 'IMF' you refer to is the International Monetary Fund, I can only say the UK is not in debt to it - - it is a net contributor to a Fund that is most often used to bail out 3rd World Nations and more recently Iceland, Latvia, Bulgaria and others - - the UK does indeed have vast debts and some of it is 'international' in origin, but not to the IMF.

It should also be remembered that a part of those huge debts is the Government's loans to bail-out the Banks - - these billions must and will be repaid - - and when the return to solvency-private shareholder ownership by paying back the Tax-payer this will significantly reduce the overall UK indebtedness.

#83 Ikamaskeip. Self delusion will not save you. Full spectrum meltdown is coming, only the prepared have any hope of survival.

Consider this form the ONS

https://www.statistics.gov.uk/cci/nugget.asp?id=198

What do GDP figures tell you anyway? The unprecedented levels of government stimulus are designed to shore up GDP by injecting artificial demand. Changing in accounting rules are designed to hide losses, and to prevent actual contraction from finding a statistical manifestation.

Consider this analysis of Citi:

https://globaleconomicanalysis.blogspot.com/

You mention BT; Consider this:

https://www.independent.co.uk/news/business/news/bt-pension-deficit-soars-to-16358bn-as-profits-fall-1765322.html

You are correct, substantially all other economies are also collapsing. How is this good?

Because the bloated British establishment is too busy snorting "A***h**e" as exemplified by the illegal conduct of BBC staff in the following article:

https://www.broadcastnow.co.uk/news/people/cocaine-use-rife-in-the-media/5007133.article


"A former BBC employee has blown the whistle on cocaine use among the corporation’s TV and radio producers and star performers."

"Sarah Graham told a Home Affairs Select Committee hearing into the cocaine trade, that it is seen as “part of your creative genius or part of your extraordinary personality”."

"She says that instead of being reprimanded, those who take the drug are praised for their “off-the-wall” brilliance."

#78 goodthinkinggeorge. It may be better to "think of politicians as fairly ordinary people, without any specialist knowledge, who rely on experts for advice" but it would not be accurate.

The IMF, for example, issued a number of warnings prior to the crash the UK economy was overheating. All ignored by the UK government.

Plenty of experts are warning today that the Anglo/American economies and political systems have been hijacked by criminal gangsters. These experts are all ignored, not only by governments but also by the media.

Consider Catherine Austin Fitts former Executive Board member at Dillon Read & Co and former member of the Bush 1 administration. She is warning people not to invest in Anglo American stock markets because they are rigged.

Consider Paul Craig Roberts, former Assistant Secretary of the Treasury in the Reagan Administration. He is warning that the US is a falied state.

Consider Bill Black a lawyer, academic and former bank regulator. He has this to say:

"The banking crisis in the United States that started in late 2008 is essentially a big Ponzi scheme; that the "liar loans" and other financial tricks were essentially illegal frauds; and that the triple-A ratings given to these loans was part of a criminal cover-up. He said that the "Prompt Corrective Action Law" passed after the Savings and Loan crisis mandated that ailing banks should be put into receivership. Black also stated that trying to hide how bad the situation is will simply prolong the problem, as happened in Japan's lost decade. Black stated that Timothy Geithner is engaged in a cover-up, and that the administration does not want people to understand what went wrong or how bad the banking situation is today"

There are plenty of experts around - the problem is they are all ignored.

No 78 "This year record numbers of students in England have been unable to get places in English colleges and Universities - this is completely against what Sir Winston said that we needed."

perhaps this is because the government made a deliberate effort to "dumb down" the entrance requirements for universities and, at the same time, reduce the educational budget to those same universities !! They are, in effect, demanding that the universities "make bricks without straw", i.e. produce inferior products and pass them off as the real thing !!

This will, indeed, go against the spirit of you post when you demand that there should be more emphasis placed in encouraging the talents of Britain rather than produce masses of sub-mediocre graduates !!

armagediontimes and #91.

There have always been the 'end of the World is nigh' proclaimers... and oh look, the end of nothing very much at all has actually come about!

Should everything, everywhere and everyone go pear-shaped as you feel, good luck to you, however, if in 8 months you too would care to rejoin this Blog Article debate when the World has shrugged off the worst effects of the crisis and is once again moving forward, please do be prepared to eat some very humble pie: There'll be enough crumbs about for even wholly mistaken doom-laden prophets such as yourself.

Cheers!

No 83 "....contrary to a lot of the nonsense you are trotting out, the Manufacturing sector of UK has not declined in the last 12 months>>...."

"...whilst many Industries when to short-time working or reduced staff..."

How do you reconcile these two statements of yours ?? Either they haven't declined and therefore did *NOT* need to do short-time work OR the *DID* decline because there was over-production and they had to reduce stock by producing less !! In any case, it is *NOT* selling the products that is causing the decline in exports.

It does not matter if you produce a zillion widgets if you can't sell them, then they cannot count as a manufacturing industry. That may count as some one's foolish endeavours !!

No 87 "...and their network is dependent on the use of network switches made by companies such as CISCO (American)"

Actually, Cisco doesn't physically make anything anymore. The manufacturing is contracted out to Chinese companies !! However, they are still very good at their R&D !!

SELF-DELUSION: MODUS VIVENDI

ikamaskeip (#95) Did you watch the first part of Newsnight last night? How about this from Feb 2007, or even from 1996.

Be careful, don't give it any oxygen, it may go straight to your head. ;-)

A reply to #81 Reaper_of_Souls: If you have a look at the stats of the OECD, the BoE, ONS and Treasury websites, you will find that the UK had a low debt to GDP ratio prior to the crisis, at around 40% of GDP, that this was lower than any other large Western economy, and that it was historically low, the average over the last 100 years being more like 80% than 40%. Moreover the current account deficit was low up to 2007 (there was even a surplus in the earlier years of this decade).

To put it simply there was a very good cushion, and since the crisis started the UK has been able to run a very large budget deficit without any problem: low interest rates, government debt sold, no inflation, no IMF etc. The fact that the UK was "well-placed" to weather the storm has in fact now proved to be correct.

#95 ikamaskeip. Maybe the difference in our respective views is that I rely on facts and you appear to rely on rhetoric and self delusion.

Whether "nothing very much has actually come about" depends largely on your vantage point. I would expect former British coal miners to be acutely aware that the coal mining industry has been destroyed. I would expect citizens of Iraq to be aware that their country has been destroyed. I would expect the 10% of the US population that relies on foodstamps to be aware that they are collecting foodstamps, and I would expect the 1 in 50 US children that are homeless to be aware that they are homeless.

So if you think having your livelihood taken away from you, being bombed, being evicted from your home, and having no ability to feed yourself amounts to "not very much" you are delusional.

If you think that having these things happen to other people amounts to not very much maybe you need to examine your own sense of humanity.

You might also ask yourself what makes you so special and why 500 people that have aggregate wealth of $5 trillion are likely to care very much about what happens to you.

Full spectrum meltdown is coming, and you cannot wish it away.