UK economy growing at fastest rate since 2007…..

UK economy growing at fastest rate since 2007 according to statistics….Woo-****-hoo – lets all buy overpriced property!, so i guess we’ll be able to pay of our £1.5+ trillion national debt sometime soon then?, perhaps i’m being obtuse or perhaps even stupid but how are we as a nation ever going to pay off our debt that’s owed?.

Or should we just say ****-it and write it all off and start again coz i for one do not trust any politician as far as i could throw them….and i’d have no end of fun practising throwing that smug faced tory **** cameron as far as i could…or perhaps i’d have more fun just dragging his smug face round the farmyard.

EDIT : they forget to say the growth is largely due to borrowing (what?….after the last time?) and the service sector rather than manufacturing.

It’s like an interest-only mortgage, we’re just paying the interest. While simultaneously spending more. So the interest payments get bigger. But the economy keeps growing to pay for the bigger interest payments, hopefully.

It’s still got to go very pear-shaped some time, there’s no way such a system can work indefinitely. The whole planet is just writing IOUs to each other – though mostly to the Chinese.

That’s what worries me Ben, and it genuinely does, i’m not just saying this for forum effect or reaction.. apparently we’ve had economic measures in place since 2008 but to be honest the measures have not even scratched the surface of the debt we owe and yet we are borrowing more and more to cover ourselves meanwhile we are meant to be satisfied by glib remarks as above from Gideon and Co?.

I can only see meltdown of the western economic currency and then what?……..

though mostly to the Chinese.

China’s economy is as much a house of cards as any other, it is pretty well known, but no one really wants to push them on it as the knock on effect will goose everyone.

Yeh, although far lower than ours. China is becoming rapidly addicted to debt.

At least according to an article I read a couple of days ago. I’ll post the link if I can remember where it was.

Don’t we still owe much of the debt to ourselves? (Nationally)

Not the article I read, but it’s a starter http://www.ft.com/cms/s/0/bcb4d462-7138-11e3-adbd-00144feabdc0.html#axzz2rlmg1nsH

It’s rather churlish IMO not to celebrate positive economic news, althought it is correct to temper the enthusiasm.

Economic momentum is widening across different, but not all, sectors, the labour market is improving etc. But it remains unbalanced. Re-balancing takes time.

Re debt, very good point but look how people react when attempts to reduce it are announced. Remember the crisis globally is a crisis of debt first and foremost and so-called austerity is only tackling the rate of debt accumulation not reducing the debt itself. But reducing gov spending and or increasing taxation are both withdrawals from the economy and slow growth. So again balance is needed.

How do we intend to reduce it? Financial repression ie, hold interest rates on debt below GDP/inflation and erode the debt that way. It’s an old trick (basically theft) we did it in the 40s-60s.

China, like Japan before it and others in the future, has flattered itself with high levels of debt and superior investments that will never make returns. The imbalances in many emerging economies are unraveling right now.

The good news is that the positive surprises continue in the UK. We should be pleased about that.

Rather generous with your trust there Somafunk. I use the “comfortably spit” unit of measure for politicians, so far I have not underestimated.

Glib comments? Ok, the Tories and the Opposition liked to pretend that we implemented austere policies, but it worked in terms of stabilising markets. Now both parties ( hard to tell with LDs) are committed to achieving budget surpluses albeit with different timescales and methods. Not that glib IMO.

Just a theoretical question – what would happen if all debt, everywhere, was written off?

If we all owe it to each other, doesn’t it just cancel out?

I really don’t know why I didn’t get the head of the Bank of England job…

Those with surpluses lend to those in deficit – at any level (country, regions, banks even individuals). The “assumption” being that those in deficit pay those in surplus back for the “use” of their surplus funds. If you simply cancel the debt out, you are in effect stealing off the first party. It’s not an innocent transaction however simple it ” may” sound.

Having said that, history tells us the creditors ( the guys in surplus) often do have to take some form of a hit. The UK has defaulted in debt before, not just the Argies. It’s hard the see a resolution in Europe without that happening at least partially and at some stage however much the Germans oppose it.

You don’t have to pay off the debt, you just have to service it. That’s why defaulting is a bad idea, as you then become a credit risk and the cost of borrowing will go up.

Now we are starting to do better it’s time to start cutting government expenditure.

…or raising taxes!!!!! Or both – a double withdrawal from the economy at the same time??????

You may have to pay off the debt if others refuse to re-finance you. “Servicing” debt sounds quite innocent to me (although point taken).

I don’t think we’re anywhere near out of danger yet. From what I gather there is still a shit storm a-brewing in the Euro zone.

http://www.telegraph.co.uk/finance/financetopics/davos/10590134/Crippled-eurozone-to-face-fresh-debt-crisis-this-year-warns-ex-ECB-strongman-Axel-Weber.html

Until people actually see some benefit in their pockets- by which I mean, not merely a return to the mean but something to offset the losses of the last 6 years- it’s not a recovery that’s going to convince many people I think, let alone impress.

Yeah you could raise taxes, but we are getting to the point of little headroom for that. There might be some room to mess around at the margins, and certainly simplifying the tax system would be a plus. In one go we’d reduce ability for tax avoidance and also make the tax collection system more efficient. I still think there would be more to be gained by cutting government expenditure than raising taxes.

I don’t disagree dragon, merely noting recent policy announcements!

NW, tricky isn’t it. The top earners suffering the worst and the lowest earners being the only ones to see incomes rise since the crisis. Bloody Tories, eh?

But come the yes vote, you guys will be ok because you can increase spending and cut taxes at the same time. Must be lovely living in la la land. Pity Carney will be bringing some reality to the debate today.

Money – like energy – can’t just disappear. OK, so we all lose a few quid down the sofa during our lifetimes and debts do get written off, but generally speaking money or, perhaps more correctly, credit, is just passed from one to another. In my simplistic view this means that someone somewhere is accruing all the world’s wealth (for want of a better description).

It reminds me of this 😆

Is there an election coming up soon…..I’ll not hold my breath for any long term benefit to the masses.

It’s rather churlish IMO not to celebrate positive economic news

Well that depends on whether it is actual positive economic news? Because from where I’m looking it doesn’t look like actual economic growth at all. It looks like politicians artificially inflating a credit-fuelled housing bubble, then using the usual smoke and mirrors to make it look like this is a good thing

No rebalancing has taken place in the UK economy, which everyone with half a brain knew was essential. No help or promotion of manufacturing, or anything other than ‘financial services’. And look where they got us last time!

Its just more of the same, complete with the eminently distasteful clamouring for increased bonuses in the city. And the end result will be exactly the same as last time, if these half-wits are allowed to carry on with utterly moronic, yet politically expedient nonsense like Gideons Help to Buy lunacy! Studiously ignoring the ‘real’ economy, and yet STILL pussy-footing around the banks, caving in to their self-interested lobbying at every turn, as they once again bury their snouts gleefully in the troff, and bollox to the rest of us! This may feel like a recovery in the Square Mile. Believe me… it sure the **** doesn’t feel like one in the North West of England! And it really really really ****s me right off that they’ve got the audacity to be asking me to celebrate it like it is. The ****s!!!! 😈

… and breathe!!

Money flows (rather than simply passes) from surplus nations (eg china) to deficit ones (US). Current account deficits (see all the currency nightmares so far this year in Argentina, Turkey, SA etc) are compensated by capital account surpluses which is how it all balances out in the end.

Breathe Binners, relax then read. There is evidence of some rebalancing (eg yesterday’s data) albeit not enough. The two big sectors of growth in the so-called boom – financial services and public sector – have both contracted. Yes, manufacturing and construction remains weak as are exports despite deliberate policy to weaken the £. Still, not correct to say that things have not recovered, hence the panic in Balls’ eyes.

Don’t forget that with 15 months to go the election we’re going to get drenched with coalition propaganda BS relying on selective use of questionable statistics. As Ben said, six years on the economy is still effectively on state life support, and there are ominous signs that another bust is on the way…

On state life support? I thought we lived in a free-market capitalist hell!?!

teamhurtmore – Member

The top earners suffering the worst and the lowest earners being the only ones to see incomes rise since the crisis.

Real world rises? Including the newly unemployed and underemployed?

The idea that the top earners are “suffering the worst” is absurd and frankly offensive. They may be paying a greater cost, but that doesn’t equate to greater suffering.

teamhurtmore – Member

Money flows (rather than simply passes) from surplus nations (eg china) to deficit ones (US)…

does it? – sounds like it moves the other direction if you ask me…

otherwise it’d work like the xth rule of thermodynamics, and everything would tend toward the same temperature/wealth.

Debt down
Borrowing down
Unemployment down
Repossesions down

Construction up
Manufacturing up
Stamp Duty up
Record car manufacuring
Record car sales

No help or promotion of manufacturing

Really, based on evidence?

How about the £1billion AGP funding being made available for UK aerospace?

How about the work done on easing red-tape on investment from Asia.
UKTI money being made available for re-shoring.

Easy to be negative when you want to be.

binners for PM

I thought we lived in a free-market capitalist hell!?!

WE do. The state socialism is only applied to the banking sector. A great article by Larry Elliot in yesterdays Guardian, repeating a very apt comparison that still applies….

Is RBS the new British Leyland?

Seems like it, eh?

LHS – Member

Easy to be negative when you want to be.

ok, isn’t personal borrowing up?

(in other words, this ‘growth’ is being funded by an increase in personal debt, why does that sound familiar?)

NW as absurd as it may sound, check the data on income inequality from the independent ONS. In income terms, neither absurd not offensive, simply fact. (Edit, tbc, I was talking about income trends rather than quality of life, but income inequality has narrowed in the UK and elsewhere since the crisis.)

Ahwiles, yes countries with surpluses (china) finance countries with deficits (US) – look who holds US government debt.

ok, isn’t personal borrowing up?

All figures suggest it is stanated for the last few years after a significant decrease during the height of the financial crisis.

The growth, in part, is being funded by the reversal of the steady decline from the majority of UK households being givers (paying more in taxes than they receive in services) to being takers (the opposite). This reached a pinacle under the labour government when over 50% of households became takers and the reforms we have seen have started to turn that around.

teamhurtmore – Member

Ahwiles, yes countries with surpluses (china) finance countries with deficits (US) – look who holds US government debt.

exactly, ‘debt’ – it’s not a gift.

I was under the impression Binners that the government employed people outside the banking sector?

Joking aside, how the majority shareholder thinks approving bonuses at loss making companies with a track record of destroying shareholder value is a good idea beggars belief. The good employees will run away. Really, the good ones jumped ship a long time ago.

It’s a terrible comparison, millions of people depend on RBS, whereas BL made sh*t cars no one wanted. Typical rubbish analyisis you’d expect to see in the papers and why they are losing money as fast a BL did.

Money – like energy – can’t just disappear.

Entirely the opposite – money can just disappear (all those written-off sub-prime mortgages) and it can just appear from nowhere (quantitative easing).

Money couldn’t be less like energy.

teamhurtmore – Member

NW as absurd as it may sound, check the data on income inequality from the independent ONS. In income terms, neither absurd not offensive, simply fact.

Oh FFS.

“The top earners suffering the worst”

The top owners may be paying the most; they are not “suffering the worst”. Tell you what, nip down the local food bank or job centre and tell the people there how lucky they are not to be one of the top earners.

Money can, does and will disappear. Just watch as governments use inflation to do exactly that.

Ahw, I don’t understand the point, sorry. I know it’s not a gift, but it still flows by definition otherwise you cannot balance the balance of payments.

Oh FFS ONS

…what’s the expression? FTFY.

See edit on previous page. Then tell me if income inequality is higher now than in 2007 or lower?

Why does the EU let the Amazons et al get away with tax avoidance?
There’s a ton of money ripe for the picking.

why does the EU let the Amazons et al get away with tax avoidance?
There’s a ton of money ripe for the picking

Two-fold

The law enables them to
They employ tens of 1000’s of people.