UK economy growing at fastest rate since 2007…..

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  • UK economy growing at fastest rate since 2007…..
  • Premier Icon somafunk
    Subscriber

    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.

    bencooper
    Member

    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.

    Premier Icon somafunk
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    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?……..

    Premier Icon MSP
    Subscriber

    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.

    piemonster
    Member

    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)

    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.

    Premier Icon Sandwich
    Subscriber

    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.

    bencooper
    Member

    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.

    dragon
    Member

    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).

    retro83
    Member

    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

    Premier Icon Northwind
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    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.

    dragon
    Member

    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.

    Premier Icon stilltortoise
    Subscriber

    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 😆
    [video]https://www.youtube.com/watch?v=y6QgHUJIQ5Q[/video]

    Premier Icon seosamh77
    Subscriber

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

    Premier Icon binners
    Subscriber

    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!?!

    Premier Icon Northwind
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    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.

    Premier Icon ahwiles
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    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.

    LHS
    Member

    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.

    Premier Icon kimbers
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    binners for PM

    Premier Icon binners
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    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?

    Premier Icon ahwiles
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    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.

    LHS
    Member

    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.

    Premier Icon ahwiles
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    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.

    dragon
    Member

    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.

    bencooper
    Member

    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.

    Premier Icon Northwind
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    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?

    Premier Icon zippykona
    Subscriber

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

    LHS
    Member

    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.

    It’s not illegal
    There is no fiscal harmonisation across Europe
    Some countries like to compete on the basis of low tax rates
    Companies “locate” to those places

    This is what wee eck wants to do in Scotland among other things

    olddog
    Member

    teamhurtmore – can you post a link to the ONS stuff on income inequality please

    Will do, but ONS website is playing up on my iPad at the moment. Will post it when I can.

    Really, who gives a shit about income inequality thm? Tell us about wealth inequality? Who’s got all the dosh? Does anyone even know where it’s stashed? Can we even believe te income figures for the top earners anyway? How much does Philip Green earn? How much does his wife earn?

    Top earners “suffering”. I’d laugh if it wasn’t so unfunny.

    Premier Icon binners
    Subscriber

    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.

    millions of people depend on RBS? Surely that just goes to show how utterly dysfunctional our ‘too big to fail’ banking system still is

    RBS is/was at best utterly incompetent, and at worst (and IMHO definitely) utterly and completely corrupt! This is why it ended up financially as well as morally bankrupt. If it had a business model worth keeping alive, it wouldn’t continue to haemorrhage tens of billions of (our) cash

    What we have here is state dependent socialism for the banking sector. We the taxpayer are acting as de facto guarentors of an insular, self-interested out-of-control system, that seeks only to line its own pockets. RBS is ****ed because in some situations it actually drove businesses to the wall, to profit from it. It actively mis-sold (conned) its own clients, again to profit itself. Theres a whole list of its appalling actions. And they just keep coming. Does anyone think this is the end of it? Seriously?

    And we deem this behaviour worthy of state support? FFS!!! It has actively hindered the British economy! And continues to do so. While rewarding the people who do it with utterly obscene salaries and bonuses

    And lets not even get into QA?! Whose benefitted from that then?

    Capitalism, red in tooth and claw for the rest of us though. Not of this state supported socialism. Everything else, including the NHS, must (and will) be privatised. But th state-owned banks will continue to leech tens of billions per year off us

    Capitalism is ****ing brilliant, isn’t it?!

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