UK economy's mixed signals hard to read for new PM Johnson

[snoop1130]

UK economy's mixed signals hard to read for new PM Johnson

By Andy Bruce

 

FILE PHOTO: Prime Minister Boris Johnson holds his first Cabinet meeting at Downing Street in London, Britain, July 25, 2019 Aaron Chown/Pool via REUTERS

 

LONDON (Reuters) - Rarely has Britain’s economic outlook been so unclear for a new prime minister as it is for Boris Johnson, with strengths such as the lowest unemployment in 44 years contrasting with signs in business surveys of a slowdown or even a recession.

 

More than three years into the Brexit crisis, Britain’s economy probably slowed to a standstill in the April-June period and might even have contracted for the first time since 2012, economists say.

 

At least part of the weakness can be attributed to a hangover from a stockpiling boom in the run-up to the original Brexit date of March 29, when companies brought forward work to get ready for possible disruption.

 

But there are other suggestions of more underlying problems.

 

Below are some important gauges of the health of the world’s fifth-biggest economy.

 

BUSINESS INVESTMENT

 

Business investment has flat-lined since the Conservative Party won the 2015 general election with a pledge to hold a referendum on membership of the European Union. That ended a rise which began after the financial crisis of 2008/09.

 

The malaise looks likely to continue as companies assess the risk that Britain leaves the EU on Oct. 31 without a deal, something Johnson has said he is prepared to do if he cannot strike a new agreement with the bloc.

 

JOBS

 

On the face of it, the labour market is the strongest part of Britain’s economy. The unemployment rate is the lowest since the three months to January 1975 and pay is rising at the fastest rate in a decade.

 

But there are also signs of weakness emerging. Employment growth slowed sharply in the three months to May and self-employment accounted for all the jobs added. The number of employees fell by the largest amount since 2011.

 

ECONOMIC GROWTH

 

Official data showed strong growth of 0.5% in the first quarter from the last three months of 2018, fuelled by the stockpiling boom.

 

The hangover from that rush and earlier-than-usual closures of auto plants in April, also linked to the March 29 Brexit deadline, mean gross domestic product probably showed zero growth or shrank in the second quarter.

 

Official GDP data is due on Aug. 9 but business surveys published recently have painted a picture of an economy struggling for momentum.

 

The closely watched IHS Markit/CIPS survey of the services sector is deep into territory associated in the past with interest rate cuts by the Bank of England.

 

GOVERNMENT FINANCES

 

The new finance minister is under less immediate pressure to fix the public finances than his most recent predecessors but he will have only limited resources to boost government spending or cut taxes, as promised by Johnson in his leadership campaign.

 

Britain’s headline measure of total government debt stands at more than 1.6 trillion pounds ($2.0 trillion), equivalent to 75% of economic output, down only slightly from historic peacetime highs of more than 80% a few years ago.

 

Britain’s budget deficit has shrunk to just over 1% of GDP in the last financial year from nearly 10% a decade ago, but official budget forecasters predicted in March that it will rise again this year.

 

That forecast did not take into account the higher spending and tax cuts pledged by Johnson during his campaign, nor the hit to the public finances that would follow a no-deal Brexit.

 

HOUSING MARKET

 

The housing market slowed after the 2016 Brexit vote, especially in London where house prices fell at the fastest rate since the financial crisis in the 12 months to May, according to official data.

 

But there are signs that the worst of the slowdown may have passed.

 

The Royal Institution of Chartered Surveyors says the housing market showed tentative signs of recovery in June as interest among buyers rose for the first time since just after the Brexit referendum, and sales also staged a rare increase.

 

-- © Copyright Reuters 2019-07-26

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[blazes]

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

[Chomper Higgot]

4 minutes ago, blazes said:

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

I can.

 

And I don’t have a degree in Classics, from Oxford or anywhere else.

 

Though I’be often considered it as a nice way to spend some time and money,

[geoffbezoz]

7 minutes ago, blazes said:

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

He also is conversant in latin. Unfortunately for you and him we are in 2019 at which time both being able to write out the Greek alphabet and converse in Latin are as useless in the UK as he will prove to be as a PM.

[blazes]

45 minutes ago, geoffbezoz said:

He also is conversant in latin. Unfortunately for you and him we are in 2019 at which time both being able to write out the Greek alphabet and converse in Latin are as useless in the UK as he will prove to be as a PM.

Yes, as useless as your opinions expressed in this anonymous medium...

but de gustibus and all that.....

[Bundooman]

1 hour ago, Chomper Higgot said:

I can.

 

And I don’t have a degree in Classics, from Oxford or anywhere else.

 

Though I’be often considered it as a nice way to spend some time and money,

Put your knowledge of the classical Greek alphabet here then, without 'copying' it from the Internet.

 

In other words, your money where your mouth is!

[Bundooman]

1 hour ago, geoffbezoz said:

He also is conversant in latin. Unfortunately for you and him we are in 2019 at which time both being able to write out the Greek alphabet and converse in Latin are as useless in the UK as he will prove to be as a PM.

Ah, a Remainer whinger! Time will tell,  let's wait and see shall we?

[Chomper Higgot]

3 minutes ago, Bundooman said:

Put your knowledge of the classical Greek alphabet here then, without 'copying' it from the Internet.

 

In other words, your money where your mouth is!

If you want to see a performing entertainer, watch Johnson videos, all theatrics and no substance.

 

 

[Bundooman]

2 minutes ago, Jip99 said:

 

 

I will put money on him also having an orange Trump blimp.. ????????????????

 

Sad assess who can only offer negative images, of things they dislike, add nothing to the debate.

Sad that the OP sees nothing different between Trump and Johnson.

 

Classic case of blinkered vindictiveness. 

[Pedrogaz]

I don't know there are too many mixed signals in the UK economy. It seems right there primed for recession to me. And I don't even have a degree in Classics from Oxford. 

[Chomper Higgot]

3 minutes ago, Bundooman said:

So not only does he have a brilliant education, he's a polished performer as well, eh?

 

And you have no idea what this guy can or cannot do yet. 

 

But you do know that you can sneer at him. 

 

Tell me. When did you last rise to the position of Prime minister, or why, with your splendidly perceptive view of him, you weren't even mentioned in the leadership contest?

I’m pleased for you that you believe you are getting what you want.

 

That you believe a proven habitual liar telling you he’ll give you what you want is another matter.

 

Beware the lies you want to hear.

 

....

It seems to have escaped you but I’m not the subject of discussion.

 

 

[metisdead]

Troll posts and the replies have been removed. 

[Laughing Gravy]

Yes same gloom and doom peddling since the Brexit referendum. The UK would lose 900,000 thousand jobs and everyone would be living in cardboard boxes. Whilst back from La la land everyone knows that there is record low level of unemployment and things are not as bad, no matter how much the doom and gloomers, keep wanting us to believe.

 

Typical Reuters rhetoric. Brexit crises. It was the UK are leaving Europe the other day. Obviously not many at Reuters went to school and did geography or they all really believe that the EU is Europe. More probably they just like to publish lies for their EU masters, like the BBC.

 

Unemployment figures are hard statistical data. Surveys from business people are filed with maybe, possible, could  be, might happen.

[geoffbezoz]

3 minutes ago, Laughing Gravy said:

Yes same gloom and doom peddling since the Brexit referendum. The UK would lose 900,000 thousand jobs and everyone would be living in cardboard boxes. Whilst back from La la land everyone knows that there is record low level of unemployment and things are not as bad, no matter how much the doom and gloomers, keep wanting us to believe.

 

Typical Reuters rhetoric. Brexit crises. It was the UK are leaving Europe the other day. Obviously not many at Reuters went to school and did geography or they all really believe that the EU is Europe. More probably they just like to publish lies for their EU masters, like the BBC.

 

Unemployment figures are hard statistical data. Surveys from business people are filed with maybe, possible, could  be, might happen.

That's an extremely simplistic view of reported statistics and indicates a  lack of understanding of basic economic principles that also rely on more underlying trends and data. However I think it is not surprising however that simplistic viewpoints limit Brexiteers comprehension of most things.

[evadgib]

1 hour ago, Chomper Higgot said:

If you want to see a performing entertainer, watch Johnson videos, all theatrics and no substance.

Thankfully not everyone agrees:

 

[Laughing Gravy]

30 minutes ago, geoffbezoz said:

That's an extremely simplistic view of reported statistics and indicates a  lack of understanding of basic economic principles that also rely on more underlying trends and data. However I think it is not surprising however that simplistic viewpoints limit Brexiteers comprehension of most things.

Read the link. It sets out all the polls. Even a high school student can work it out. The polls were wrong.

Have you forgot who won the referendum and who was constantly told that remain would win. How simplistic do you need.

[geoffbezoz]

4 minutes ago, Laughing Gravy said:

Read the link. It sets out all the polls. Even a high school student can work it out. The polls were wrong.

Have you forgot who won the referendum and who was constantly told that remain would win. How simplistic do you need.

Oh dear, how well you prove my point.

[Laughing Gravy]

2 minutes ago, geoffbezoz said:

Oh dear, how well you prove my point.

Oh dear oh dear. You didn't read the link or maybe you were one of those people who actually believed, that remain would win the referendum. Would you like to tell us all who did. Then the point has been proven.

[Rimmer]

Some flames and baiting posts removed

[geoffbezoz]

For the layman the simplistic issuance of basic data such as unemployment figure etc may give heart to the desire to believe everything is "coming up roses".  However there are very many economists with far greater comprehension of the issues and insights than the average layman, and certainly more so than myself and I suspect anybody on this forum, who have concluded from underlying trends and data that the economy is not potentially sound. That frightens investors and with the wide spread belief  in many quarters that Boris Johnson has no intention of leaving with or without a deal, rather just "stoking" it up for when he potentially calls an October election then the signals indeed are not good.

[Basil B]

3 hours ago, blazes said:

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

A degree in Classics is hardly a degree in Rocket Science, and the Greek Alphabet did not his grandfather come from that part of the world?

 

Still think for him even a Enid Blyton's Noddy book would be a hard read...

[soalbundy]

3 hours ago, blazes said:

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

A degree in classics..... would that be as useful in the real world as Merkel's degree in chemistry ?

[Chomper Higgot]

42 minutes ago, geoffbezoz said:

For the layman the simplistic issuance of basic data such as unemployment figure etc may give heart to the desire to believe everything is "coming up roses".  However there are very many economists with far greater comprehension of the issues and insights than the average layman, and certainly more so than myself and I suspect anybody on this forum, who have concluded from underlying trends and data that the economy is not potentially sound. That frightens investors and with the wide spread belief  in many quarters that Boris Johnson has no intention of leaving with or without a deal, rather just "stoking" it up for when he potentially calls an October election then the signals indeed are not good.

There's a by-election next week, I doubt Johnson will make any  decisions on anything Brexit or Election related until the results are in.

[arithai12]

4 hours ago, blazes said:

I would hesitate to call a guy who had a degree in Classics from Oxford a buffoon.

Indeed, I doubt very much whether you would be able to write out the classical Greek alphabet, unlike Boris who could....but of course I could be wrong....

I don't understand why having a degree in Classics excludes being a buffoon. Being a buffoon has no implication on one's intellectual capacities, and frankly a degree in Classics is not a synonymous of brilliant intellect either.

 

As for knowing the classical Greek alphabet, what's the difficulty? I know it since I was a kid, like many do, and it's certainly not something I would mention in my CV.

[geoffbezoz]

1 minute ago, Chomper Higgot said:

There's a by-election next week, I doubt Johnson will make any  decisions on anything Brexit or Election related until the results are in.

Predictions are the Lib Dems will win

 

[geoffbezoz]

1 minute ago, arithai12 said:

I don't understand why having a degree in Classics excludes being a buffoon. Being a buffoon has no implication on one's intellectual capacities, and frankly a degree in Classics is not a synonymous of brilliant intellect either.

 

As for knowing the classical Greek alphabet, what's the difficulty? I know it since I was a kid, like many do, and it's certainly not something I would mention in my CV.

Agree with you but you are not one of those pretending to to be someone you are not, and good for you too if I may say so.

[Nigel Garvie]

4 hours ago, blazes said:

Yes, as useless as your opinions expressed in this anonymous medium...

but de gustibus and all that.....

I have no Latin, or ancient Greek, I think it unlikely that I will meet a Roman or an ancient Greek speaking person (Although I have met some old ones). I can get around in modern Greek. Why study useless dead languages when you could do science or engineering, or IT. It just marks Bojo out as a numpty.

I imagine the gustibus is one of Boris's cardboard toys which he blows along with each lying breath he takes.

[blazes]

1 hour ago, Chomper Higgot said:

There's a by-election next week, I doubt Johnson will make any  decisions on anything Brexit or Election related until the results are in.

 

This by-election (in Brecon and Radnor on the Welsh border) will be irrelevant to speculation about ...well, anything.  It is being held in deeply Lib-Dem (formerly the Liberal Party) territory.  Plaid Cymru and the Greens are not standing so as to help the Lib-Dem vote.

 

And, above all, the disgraced Tory councillor who was "recalled" (and thus caused the by-election) is again standing, even after being found guilty of making fraudulent expenses claims!

 

So, it should be a shoo-in for the Lib-Dems.

 

(And, as if Boris's ear were attuned to the words of one Chomper Higgot, we can rest assured that Boris will not be taking note of the result in the least.) 

 

If I had a vote, I would go for the Raving Monster Loony Party....

[blazes]

1 hour ago, Nigel Garvie said:

I have no Latin, or ancient Greek, I think it unlikely that I will meet a Roman or an ancient Greek speaking person (Although I have met some old ones). I can get around in modern Greek. Why study useless dead languages when you could do science or engineering, or IT. It just marks Bojo out as a numpty.

I imagine the gustibus is one of Boris's cardboard toys which he blows along with each lying breath he takes.

 

I shouldn't be surprised at such breathtaking ignorance, but I am. 

 

The famous builders (imperialists -oh and raaaacccists too) of the British Empire tended to be educated in the Classics.  They did not assume that civilization could be built on a chemistry degree, important as the latter has proven to be.

I suppose such ignorance of the classical roots of modern European civilization is just par for the course for hermetically-sealed Remainer minds.

 

As a ps, I would add that study of Latin, a hugely important source of the English language (and other European languages) would undoubtedly help to stem the tide of ignorance that has finally brought us to text messaging as the finest flower of our civilization.

[tomacht8]

3 hours ago, soalbundy said:

A degree in classics..... would that be as useful in the real world as Merkel's degree in chemistry ?

She has a doctorate in physics.

The title of Angela Merkel's dissertation was: "Investigation of the mechanism of decay reactions with simple bond breaking and calculation of their rate constants on the basis of quantum chemical and statistical methods". In her doctoral thesis, Merkel examined the influence of spatial correlation in bimolecular elementary reactions in dense media and received the rating "very good". With her doctor thesis, Merkel contributed to research in the field of statistical and physical chemistry at the Central Institute for Isotope and Radiation Research.