Tomorrows Another Day

[bluemonday]

Clicky

The UK economy could decline for another year and take a further two years to recover, according to a respected think tank.

[GD4ELI]

Clicky

The UK economy could decline for another year and take a further two years to recover, according to a respected think tank.

Bet it takes even longer than that - don't forget that on the world stage Sterling has lost 30% to 40% of its value, I doubt that will ever be recovered.

 

Some very respected analysits are suggesting five years before the economy swings again - and that's hoping that the environment doesn't collapse in the meantime.

[Chinahand]

Not really true GD4ELI - on trade weighted terms the pound is at about 95% of its 1990 level.

Its basically where it was after it came out of the ERM in 1992 - which about makes sense - increasing our export competitiveness!

 

Check the broad effective exchange rate here.

[manshimajin]

IMO a big problem for the UK is that even if global economic circumstances start to improve in 2010 or 2011 the UK Government will need to start paying for its current vast borrowings by increasing taxation in 2010 or 2011. This will slow down any UK recovery by dampening disposable income.

 

There is also likely to be a spike in inflation too as oil and other resource prices move up and UK interest rates increase again. This will further slow down any recovery. Not sure that the London Olympics will save them either.

 

If Darling is talking "2012" and "worse than I expected" the likely scenario is "even worse than I expected when I said it was worse than I expected" and "2014".

 

On the bright side we are now experiencing the reduced levels of economic activity, consumption, travel etc etc that will cut CO2 emissions enormously. So the recession should have a very positive environmental effect as it is delivering the sort of reductions in activity that the experts say we need to fight global warming!

 

There is a fine irony in the fact that when we are achieving this result world governments who lecture us on the environment are now trying to pump up consumption!!!

[GD4ELI]

Not really true GD4ELI - on trade weighted terms the pound is at about 95% of its 1990 level.

Its basically where it was after it came out of the ERM in 1992 - which about makes sense - increasing our export competitiveness!

 

Check the broad effective exchange rate here.

If you look at the Sterling / Euro / CHF rate over the last few years then what I stated is correct. Coparing over the last twenty years produces even worse figures.

[Albert Tatlock]

On the bright side we are now experiencing the reduced levels of economic activity, consumption, travel etc etc that will cut CO2 emissions enormously. So the recession should have a very positive environmental effect as it is delivering the sort of reductions in activity that the experts say we need to fight global warming!

 

There is a fine irony in the fact that when we are achieving this result world governments who lecture us on the environment are now trying to pump up consumption!!!

I've just put £50 on at Betlose.com, that all this is an IPCC conspiracy to quickly cut world emissions. The fat cats have now taken enough money out of the system and are happy enough to sit back for a few years, whilst the rest of us in the meantime are being convinced by world governments that events are out of their control and we're being led by the nose into recession

Maybe the makings of a thread to rival even the MF 9/11 conspiracy thread.

[manshimajin]

Maybe the makings of a thread to rival even the MF 9/11 conspiracy thread.

Stand-by for Darling saying that due to unforeseen circumstances there will never be a recovery.

[slinkydevil]

Richard Butt should be penning another letter - "but Mr Darling you said it wouldn't be this bad, you did, you did and it's not fair MUMMY!!! I want my mummy!"

[manshimajin]

Richard Butt should be penning another letter - "but Mr Darling you said it wouldn't be this bad, you did, you did and it's not fair MUMMY!!! I want my mummy!"

Ireland today...UK in 2 years?

 

 

[Rog]

It’s all well and good to write about the UK paying off the huge debts that have been taken on but first the UK must sort out the balance of trade, and move to where it actually starts to have a current a/c surplus.

[Cambon]

Bet it takes even longer than that - don't forget that on the world stage Sterling has lost 30% to 40% of its value, I doubt that will ever be recovered.

 

Some very respected analysits are suggesting five years before the economy swings again - and that's hoping that the environment doesn't collapse in the meantime.

 

Not really GD4ELI. For years the the £/$ rate has floated around $1.7 mark. After the US 2007 crash we were looking at $2.10, but that was an extreme. The dollar has recovered and the pound has crashed at the same time. But if you consider the difference between the current $1.47 and the $1.70 average the difference is 15-16%.

 

The big issue is the Euro which is yet to crash, but it will. The problem is that the ECB is yet to admit that Europe is in dire trouble, but it will come. I just hope that the pathetic UK government can get it's act together before this happens so we can take advantage of teh current situation.

[manshimajin]

As always we are waiting for the United States to recover so that Asian and EU economies will start moving again.

 

I read this morning that German exports are down 23% - not a good sign. I guess, Cambon, that it would be a good thing for EU competitiveness if the strong euro was to weaken but could be a challenge for the UK which currently has an exchange rate advantage over €zone exporters.

 

Is there much evidence of UK exporters taking advantage of the weak pound to significantly increase their exports?

[Sebrof]

As always we are waiting for the United States to recover so that Asian and EU economies will start moving again.

 

I read this morning that German exports are down 23% - not a good sign. I guess, Cambon, that it would be a good thing for EU competitiveness if the strong euro was to weaken but could be a challenge for the UK which currently has an exchange rate advantage over €zone exporters.

 

Is there much evidence of UK exporters taking advantage of the weak pound to significantly increase their exports?

 

I am sure they are trying, but who's buying?

 

We (UK and IOM) should really be trying to promote tourism this year. Apparently foreign holidays (by Brits) have not declined as much as many had feared.

 

S

[manshimajin]

I am sure they are trying, but who's buying?

 

We (UK and IOM) should really be trying to promote tourism this year. Apparently foreign holidays (by Brits) have not declined as much as many had feared. S

That is no doubt right - but what was that about 'when the going gets tough, the tough get going'? IMO little will happen until the USA economy starts to pick up.

 

S. I fear we will get into a circular debate about tourism:

 

£ is weak, this makes IOM more attractive to UK and € travellers, but cost of getting here is uncompetitive versus 'package' destinations, therefore poor tourism levels achieved in IOM, but £ is weak....

[pongo]

The big issue is the Euro which is yet to crash, but it will.

 

Based on what? And crash against what?

 

Unlike the $, the € is not tied up in any sort of mechanism where its value is supported by the Chinese.

 

I know that some €zone countries face economic difficulties and would welcome devaluation - but what do you see as the threat to the actual value of the € against other countries ? Such that it would constitute a crash of the currency ? What would be the mechanism ?