UK out of recession?

Ok, this increase consumer confidence for stupid people but the biggest problem is that the economy just shrunk by 4%, but it has only grown by 0.1%. We are still a massive way away from being "back to normal".
 
scorza said:
I think that technically there was more than one recession in the early '90s. There was the one caused by the US (surprise :rolleyes: ) Savings and Loans scandal which kicked off a global recession, followed by low and negative growth in the UK when the Conservative government of the time cut public spending to the bone, kept the value of the pound artificially high for the ERM via high interest rates (screwing home-owners, businesses and exporters hard), and gave no support whatsoever to British industries that would actually be quite useful now had they not gone out of business.
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The early 90's recession was actually much milder than both the early 80's and current recession in terms of GDP decline.

http://www.statistics.gov.uk/cci/nugget.asp?ID=2294

The issues around interest rates, and the inability to drop them when we needed to, was a major problem, and indeed entry into the ERM was almost certainly a mistake as we were already struggling somewhat at that point and we entered it far too high against the DM.

The big difference in how we exit recession this time is the sheer amount of state debt involved.
 
Dolph said:
The early 90's recession was actually much milder than both the early 80's and current recession in terms of GDP decline.

http://www.statistics.gov.uk/cci/nugget.asp?ID=2294

The issues around interest rates, and the inability to drop them when we needed to, was a major problem, and indeed entry into the ERM was almost certainly a mistake as we were already struggling somewhat at that point and we entered it far too high against the DM.

The big difference in how we exit recession this time is the sheer amount of state debt involved.
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True but in many ways GDP growth/contraction isn't directly relevant to the average bloke in the street, what is directly relevant is whether or not we're going to stay in a job (consumer confidence). Jonny69 is quite correct to say that this recession doesn't feel as bad despite official figures showing the contrary. Remember that in the early '90s unemployment hit 10% nationwide, today it's only ~6.25% (2.5m unemployed/40m available for work) - still too high though. Not saying that Labour necessarily deserve all the credit for this mind, but if they'd got it as badly wrong as the Conservatives did in the '90s then it's a fair bet that figure would be higher. Unemployment decreased in December, let's hope that trend continues.
 
scorza said:
True but in many ways GDP growth/contraction isn't directly relevant to the average bloke in the street, what is directly relevant is whether or not we're going to stay in a job (consumer confidence). Jonny69 is quite correct to say that this recession doesn't feel as bad despite official figures showing the contrary. Remember that in the early '90s unemployment hit 10% nationwide, today it's only ~6.25% (2.5m unemployed/40m available for work) - still too high though. Not saying that Labour necessarily deserve all the credit for this mind, but if they'd got it as badly wrong as the Conservatives did in the '90s then it's a fair bet that figure would be higher. Unemployment decreased in December, let's hope that trend continues.
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This is true, although partly down to different approaches to measuring unemployment and whether people are 'unemployed'.

It is also worth remembering that companies generally (excluding the public sector) have a lot less 'fat' now that they did in 1990, and hence it is a lot harder to cut people without directly impacting your ability to provide service. The 90's was really the first time when cutting unnecessary people became 'acceptable' and expected, and was really the end of the whole job for life culture.

Everyone has gone into this recession with a very different attitude to the last, and hence the rise in unemployment (which isn't significantly worse than it was in 1990, given the higher starting point of the time) has seemed much less of a problem.

As I said though, the real problem this time is going to be the longer term consequences of the economic management of the last 10 years.
 
scorza said:
Remember that in the early '90s unemployment hit 10% nationwide, today it's only ~6.25% (2.5m unemployed/40m available for work) - still too high though.
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Do those figures include the millions that are on incapacity benefit rather than JSA? I know it doesn't include people like me who are unemployed, looking for work but not entitled to JSA.
 
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I didnt know what everyone was on about to start with I thought malc started the thread, but yeah malc wins the internet.

Does anyone care about the recession now? I'd like to hear more about malcs time travel exploits.
 
The headline unemployment figures are pretty misleading, they only really record a fraction of the economically inactive working age population, there's all sorts of fudge factors around people not being able to sign on until they exhaust their savings etc.

As for the current state of things, the economy has contracted a fair bit in the last couple of years (run the percentile swings through excel, you might be surprised quite how much of a change it is!). Some preliminary guestimates say GDP has increased by 0.1%, but that just means the economy is still dragging its arse around the bottom.

There's a big case to be made for things like the Cash for Clunkers & other expansions in Government spending boosting that GDP change, so the apparent growth is a result of public expenditure; the private sector is still cutting back.

The big problem we're going to face is that public spending is going to get *viciously slashed*, and an even higher tax burden placed on a struggling private sector. Couple that with the threat of a downgrade on Sterling boosting the cost of Public debt and inflationary pressures, and things really do not look good.

So technically, assuming the GDP +0.1% isn't revised downwards then we are out of the recession. Practically, we're going to get hit with more bad news and the economy isn't done correcting downwards.

If you are in a position to, you should be paying down any debt you have.
 
I heard than when you get older time goes slower, malc has gotten so old time has actually started to reverse a little.
 
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