UK tips into recession in huge blow to Rishi Sunak

[JayClay]

Just now, noobexpat said:

 

Its basically flat ...but the word recession sells news

 

No reaction from the stockmarket which i think tells a story ie. largely expected, rather than a big surprise.

 

Yes it was expected that we might enter recession, although the level of the contraction has been a bit of a surprise to everybody. Yes growth is essentially flat over the course of a whole year.

 

But I still don't understand what point you were trying to make..?

[Chomper Higgot]

14 minutes ago, noobexpat said:

 

Its basically flat ...but the word recession sells news

 

No reaction from the stockmarket which i think tells a story ie. largely expected, rather than a big surprise.

The report on the economy comes from the Office of National Statistics, it’s an official UK Government report, the word ‘recession’ is the official Government assessment of the state of the economy. 
 

Absolutely nothing to with selling news.

 

Yes the stock market has factored in the mismanagement of the economy.

[noobexpat]

17 minutes ago, JayClay said:

But I still don't understand what point you were trying to make..?

 

Wasn't my post.

[noobexpat]

4 minutes ago, Chomper Higgot said:

the word ‘recession’ is the official Government assessment of the state of the economy. 

 

No, its not an official anything. Its a generic term adopted by various countries and the definitions vary between countries!

 

[thaibeachlovers]

14 hours ago, dunroaming said:

The Conservatives are pretty much dead in the water after the last few years of screwing up everything they have touched.  Two by-elections on Thursday in what should have been safe Conservative seats and Labour wiped the floor with them.  But be clear people were not voting Labour in, they are voting to get rid of this shower of inadequate imbeciles.  

 

 

Seems to be a pretty common British political situation. Blair had 2 huge majorities and still stuffed it up, Gordon was a bad joke, the conservatives IMO only survived in power because Labour was worse (and still is IMO ).

 

For whatever reason, seems that British politics is so dire that no decent people with a brain cell want any part of it.

 

I don't see it getting any better, either.

[candide]

1 hour ago, JayClay said:

 

I'm not sure what point you're trying to make...

 

Are you disagreeing with the definition of "recession"? Or are you claiming that, despite being in recession, the UK should be proud of having an economy which has "grown" at the mammoth rate of 0.1%?

I am surprised that the sum of the 4 quarters is -0,2  while the article states  "GDP expanding by just 0.1% over the entirety of 2023".

[youreavinalaff]

5 hours ago, mrfill said:

 Bank of England raised interest rates and kept them high.

Interest rates were raised. However, current interest rates are not high. They are not even at average levels over the past 50 years.

[Scott Tracy]

Do you wonder, as I do, who invented the definition of recession and why so much significance is attached to the word?

 

What's the word defining 2 consecutive quarters of positive growth?

[mrfill]

56 minutes ago, youreavinalaff said:

Interest rates were raised. However, current interest rates are not high. They are not even at average levels over the past 50 years.

They're way over the average of the last 15 years - basically the tenure of the so-called 'party that is good for the economy'. Its been economic lunacy ... and Liz Truss....

[youreavinalaff]

3 hours ago, mrfill said:

They're way over the average of the last 15 years - basically the tenure of the so-called 'party that is good for the economy'. Its been economic lunacy ... and Liz Truss....

Interest rates have been artificially low for too long. Right now they are still a little low.

 

6% base rate is about right.

Edited February 17 by youreavinalaff

[Chomper Higgot]

2 minutes ago, youreavinalaff said:

Interest rates have been artificially low for two long. Right now they are still a little low.

 

6% base rate is about right.

Are they twice low? 

[stevenl]

20 hours ago, noobexpat said:

Corbyn & abbott would have saved the day 555

 

10 hours ago, noobexpat said:

Corbyn & abbott. Never forget the alternative.

 

 

7 hours ago, noobexpat said:

Terrifying...

 

6 hours ago, noobexpat said:

 

And thank god, says the whole nation.

Got no issues with starmer and the current labour gang. I don't hate, just because ...like so many do.

 

Almost impossible job whoever runs the country. Try their best is all i expect!

Your earlier posts make a laughing stock of the 4th one here.

[noobexpat]

2 hours ago, stevenl said:

Your earlier posts make a laughing stock of the 4th one here.

 

Not really ...can't think of any politicians that compare to those two.

Even labour voters recognised that ludicrous few years.

[thaibeachlovers]

7 hours ago, youreavinalaff said:

Interest rates have been artificially low for too long. Right now they are still a little low.

 

6% base rate is about right.

Any interest rate above the less than 1% interest I got on my money would be a higher rate. I suppose I was lucky that they didn't make me pay to not give me much benefit at all.

[JayClay]

19 hours ago, candide said:

I am surprised that the sum of the 4 quarters is -0,2  while the article states  "GDP expanding by just 0.1% over the entirety of 2023".

 

Ahh. Now I feel stupid.

 

21 hours ago, noobexpat said:

 

Wasn't my post.

 

Ahh.... Now I feel stupid!

Edited February 18 by JayClay

[RayC]

15 hours ago, youreavinalaff said:

Interest rates have been artificially low for too long. Right now they are still a little low.

 

6% base rate is about right.

 

Why 6%? Would you raise rates now? If so, that's a .75% increase at a time when growth seems to be stagnant at best. I can't see how that helps the economy recover.

[youreavinalaff]

10 hours ago, thaibeachlovers said:

Any interest rate above the less than 1% interest I got on my money would be a higher rate. I suppose I was lucky that they didn't make me pay to not give me much benefit at all.

You clearly haven't followed the thread.

 

Your comment is inane.

 

If you were getting less than 1% on your money, you should have moved it.

[youreavinalaff]

2 hours ago, RayC said:

 

Why 6%? Would you raise rates now? If so, that's a .75% increase at a time when growth seems to be stagnant at best. I can't see how that helps the economy recover.

In my long experience of being both a borrower and a saver, I just feel 6% is a happy medium.

 

Of course, interest rates are not and cannot be fixed for ever and will vary. 5.25% is not far off and probably a decent rate for the current economic climate. 

 

I wouldn't raise interest rates right now and I certainly would not think about cutting them.

[Chomper Higgot]

2 hours ago, youreavinalaff said:

In my long experience of being both a borrower and a saver, I just feel 6% is a happy medium.

 

Of course, interest rates are not and cannot be fixed for ever and will vary. 5.25% is not far off and probably a decent rate for the current economic climate. 

 

I wouldn't raise interest rates right now and I certainly would not think about cutting them.

While I agree with you that 6% does seem a fair rate of interest, and near the long term historical norm, that’s not the critical issue.

 

After a long period of very low rates millions of people have borrowed heavily to buy homes; moreover significant numbers of people have leveraged their existing property value to fund the purchase of buy to let apartments and houses.

Even small interest rate rises represent significant problems for borrowers who are over exposed to mortgage debt.

 

The Government’s problem, with only a few short months to the election*, is these people are voters. 
 

* My punt is May.

 

[youreavinalaff]

25 minutes ago, Chomper Higgot said:

While I agree with you that 6% does seem a fair rate of interest, and near the long term historical norm, that’s not the critical issue.

 

After a long period of very low rates millions of people have borrowed heavily to buy homes; moreover significant numbers of people have leveraged their existing property value to fund the purchase of buy to let apartments and houses.

Even small interest rate rises represent significant problems for borrowers who are over exposed to mortgage debt.

 

The Government’s problem, with only a few short months to the election*, is these people are voters. 
 

* My punt is May.

 

Those who overstretched themselves only have themselves to blame.

 

If they change the way the are/were going to vote because of being overstretched, they are being narrow minded.

[Chomper Higgot]

36 minutes ago, youreavinalaff said:

Those who overstretched themselves only have themselves to blame.

 

If they change the way the are/were going to vote because of being overstretched, they are being narrow minded.

That’s a rather simplistic view.

 

They weren’t overstretched until a short time Prime Minister decided the rules of the market didn’t apply to her own view of how the economy works.

 

Millions are still paying the price, regardless of all their own efforts to act responsibly with their money.

 

May can’t come soon enough.

[youreavinalaff]

12 minutes ago, Chomper Higgot said:

That’s a rather simplistic view.

 

They weren’t overstretched until a short time Prime Minister decided the rules of the market didn’t apply to her own view of how the economy works.

 

Millions are still paying the price, regardless of all their own efforts to act responsibly with their money.

 

May can’t come soon enough.

Anyone with any common sense, including lenders, know it's imperative to look at how borrowing would look with a, circa, 3% increase in interest rates.

 

Anyone who maxed out their limits when rates were 2%, thinking they would stay at 2%, was foolish.

 

It is that simple.

 

May, possible election, won't change a thing. Labour will not be able to change anything anytime soon.

[Chomper Higgot]

1 hour ago, youreavinalaff said:

May, possible election, won't change a thing. Labour will not be able to change anything anytime soon.

Pinned.

[JonnyF]

On 2/16/2024 at 10:21 PM, BenStark said:

Where are those guys who always claim that the economy in the UK is doing better than the EU?

 

Here.

 

How about we start with the EU's largest economy, The EU powerhouse. Zee Germunz?

 

https://www.euractiv.com/section/economy-jobs/news/german-economy-doing-dramatically-bad-economy-minister-says-as-government-prepares-to-slash-gdp-forecast/

[candide]

2 hours ago, JonnyF said:

 

Here.

 

How about we start with the EU's largest economy, The EU powerhouse. Zee Germunz?

 

https://www.euractiv.com/section/economy-jobs/news/german-economy-doing-dramatically-bad-economy-minister-says-as-government-prepares-to-slash-gdp-forecast/

How about an attempt at derailing the topic?

[youreavinalaff]

10 minutes ago, candide said:

How about an attempt at derailing the topic?

Actually, another poster mentioned the EU. JonnyF was responding to that post.

Edited February 18 by youreavinalaff

[candide]

3 hours ago, JonnyF said:

 

Here.

 

How about we start with the EU's largest economy, The EU powerhouse. Zee Germunz?

 

https://www.euractiv.com/section/economy-jobs/news/german-economy-doing-dramatically-bad-economy-minister-says-as-government-prepares-to-slash-gdp-forecast/

 

13 minutes ago, youreavinalaff said:

Actually, another poster mentioned the EU. JonnyF was responding to that post.

Ah, OK.

Actually UK and Germany experienced a very similar fate in 2023.

https://commonslibrary.parliament.uk/research-briefings/sn02784/

[thaibeachlovers]

10 hours ago, youreavinalaff said:

Those who overstretched themselves only have themselves to blame.

 

If they change the way the are/were going to vote because of being overstretched, they are being narrow minded.

Agreed. If loads of people thought low interest rates would last forever, it only goes to prove how bad education is today that they actually think that. Any reading of recent history that includes the 1930s would have warned people of what actually happens in the real world.

 

If they think that any political party controls such they are IMO just ignorant.

[RayC]

18 hours ago, youreavinalaff said:

In my long experience of being both a borrower and a saver, I just feel 6% is a happy medium.

 

Of course, interest rates are not and cannot be fixed for ever and will vary. 5.25% is not far off and probably a decent rate for the current economic climate. 

 

I wouldn't raise interest rates right now and I certainly would not think about cutting them.

 

I agree with your conclusion but not with your premise.

 

Recent governments have set a target inflation rate of 2%. Between 2009 - 2021, the BoE was fairly successful at meeting that target (2011 was the only year when the annual rate was above 3%). From March 2009 until December 2021, the base rate never rose above 0.75%. A rate anything like 6% could have never have been justified.

 

The base rate has to be set in accordance with the prevailing economic conditions not the historical average or a gut feeling.

[herfiehandbag]

On 2/16/2024 at 10:08 PM, RayC said:

 

I agree 100% that "Once Brexit passed, disruptions to the British economy were inevitable".

 

However, I don't see how you can possibly absolve the Tories from blame. Look at the evidence: Cameron, Tory PM, called an unnecessary referendum for purely selfish reasons.  Nearly half of all Tory MPs campaigned in favour of Brexit. Cameron's replacement, May, ensured that there would be a 'hard' Brexit by effectively ruling out joining the EEA and any continuation of either the Customs Union and membership of the Single Market early in the negotiations ("Brexit means Brexit"). Her replacement, Johnson, made a bad situation worse by continually insulting and antagonising the EU. To give Sunak deserved credit, he has, at least attempted to rebuild our relationship with the EU, and he has had some success. Nevertheless, imo there are plenty of reasons to blame successive Tory governments for the fiasco that is Brexit.

I am not sure that it was an unnecessary referendum - I suspect that the majority of the electorate wanted one, many had wanted one for some  time, and when it was held the majority voted, on a large turnout, against the established "political concensus", and chose to leave.

 

The fiascos that marked the process of leaving the EU were largely the result of that " established political consensus" variously freezing in horror, attempting to ignore, attempting to amend, naysaying, proposing to continue asking the question again until they got the answer they wanted, and various other moves to make it as difficult as possible.

 

I cant really say that I have that much sympathy for Sunak. I don't bear him any personal animus, but he was installed (and engineered his own installation) as Prime Minister by the Tory section of the "established political concensus" following their

defenestration of the Prime Minister (Johnson) selected as the Tory Candidate by the party membership (to their dismay) and then endorsed by the electorate in an overwhelming General Election victory. They didn't like him, (Johnson) forced him out and then engineered the installation of Truss (disaster) and then Sunak. The resulting internal party turmoil having taken the governments eye of the economic ball at an important time, and wasted the political opportunity granted by 5 years with such a significant majority, and leaves them in election year flailing around, still with their eye off the ball.

 

Bottom line, perhaps, that although the UK has slipped into recession, so have several other major European economies (Germany?)

In the case of the UK I would argue as a result of ineffectual government rather than Brexit. The trouble is of course now that unlike Germany we don't have Greece, Italy and Portugal to bail us out!😃

 

Personally and politically , I am a cynical liberal conservative ( small "c"), not a member of the Conservative Party ( I doubt if they would have me)!. I voted Tory at the last election and feel betrayed by the parties subsequent antics, and failure to govern.

Edited February 19 by herfiehandbag