Britain to dodge recession but pay to keep getting squeezed

[snoop1130]

Britain to dodge recession but pay to keep getting squeezed

Jonathan Cable

 

Shoppers walk past a sale sign in central London, Britain June 27, 2017.

 

LONDON (Reuters) - Britain will avoid recession in the coming year but economic growth is expected to lag the euro zone, a Reuters poll showed on Thursday.

 

Consumers will feel the pinch from wage increases failing to keep up with rising prices.

 

It is just over a year since Britons voted to leave the European Union, a decision that has knocked around 13 percent from sterling's value, in turn driving inflation well above the Bank of England's 2 percent target as imports became more expensive.

 

Inflation will peak at 2.9 percent in the last quarter of 2017, according to the poll of almost 70 economists taken this week, but that won't push the central bank to tighten its ultra-loose monetary policy anytime soon.

 

Bank Rate was cut to a record low 0.25 percent in the months after the Brexit referendum and won't be lifted until 2019, the poll found.

 

"UK monetary policy is likely to be (as it should be) 'data dependent'," said Simon Wells at HSBC.

 

"The data are likely to stay fairly weak as consumers continue to face an income squeeze and firms wait for more clarity on the Brexit deal before growing investment rapidly."

 

Consumers played a key role in driving economic growth last year but pay increases have been lagging inflation, something that is expected to continue.

 

Wages will rise 2.2 percent this year and 2.5 percent next whereas inflation will average 2.7 percent in 2017 and 2.6 percent in 2018, according to medians. The BoE forecasts wages will rise 3.0 percent next year.

 

BREXIT WOUND

 

Reuters polls over the past few months have repeatedly said a disorderly Brexit, where no deal is reached when the two years of talks are due to conclude, would be the worst outcome for sterling and Britain's economy.

 

Negotiations over leaving the EU have not begun well due to disagreements among Prime Minister Theresa May's team of ministers about the kind of deal they should be seeking, a former top British diplomat said this week.

 

In the first full round of Brexit talks last month there was little compromise between the two sides on key disputes and the lack of clarity around how the divorce ends has stopped firms from investing.

 

BoE Governor Mark Carney has said uncertainty about Brexit -- in particular, lower investment by companies -- meant the economy could not grow as fast as before without pushing up inflation.

 

But the economy is still expected to grow, albeit slowly, and there is a median likelihood of a recession in the coming year of just 20 percent. Only two economists polled -- at Fathom Consulting and BayernLB -- gave a forecast above 50 percent.

 

Britain's economy -- one of the fastest growing among the Group of Seven rich nations last year but now one of the slowest -- will expand just 0.3 percent per quarter through to the middle of next year, the poll found.

 

That compares with predicted 0.4 percent per quarter forecasts for the euro zone. [ECILT/EU]

 

Reporting by Jonathan Cable Polling by Sarmista Sen and Anisha Sheth; Editing by Ross Finley/Jeremy Gaunt

 

-- © Copyright Reuters 2017-8-10

[Grouse]

Yes but we will have our sovereignty! (whatever that is)

 

What an appalling farce and what an indictment of the UK education system! ?

[ferguston]

15 hours ago, Grouse said:

Yes but we will have our sovereignty! (whatever that is)

 

What an appalling farce and what an indictment of the UK education system! ?

What has Brexit got to do with the English, Northern Ireland, Scottish, and Welsh education systems or, was that a "typo" ?

[puck2]

LONDON (Reuters) - Britain will avoid recession in the coming year but economic growth is expected to lag the euro zone, a Reuters poll showed on Thursday.

 

Just to now I didn't know that polls decide on a recession anywhere in the world.

 

[PeCeDe]

This is the closest thing to a self-harming child I've seen in a long time. There has to be a medication for it. Let's all vote for Brexit, yippee we won! Oh BTW, we'll need a strong Government to guide us through the dangerous maze of EU withdrawal.. So, Ok then let's have another vote to get that strong Gov't and blow 'em all up. When it feels like we're walking through the gates of hell let's bring some gasoline and a match... Is that how the saying goes?

[theoldgit]

Inflammatory remark and follow up posts removed.

[PeCeDe]

I  know someone who voted for Brexit because they lost there job to a "Foreign" worker, failing to see that constant answering the boss back, undermining the corporate moral, shoddy workmanship, constant punctuality issues etc. etc. was the real reason. Those of us receiving UK funds here, for me in part, took an immediate and very large hit. Now the chickens are coming home to roost, they will still blame everyone else. None so blind as those who will not see. It's a sad situation and there was no need, Britain would have been a much stronger nation and not lost it's identity. I don't want to say it but I will anyway... Serves you right.

[PeCeDe]

26 minutes ago, Grouse said:

I travelled home especially. Fat lot of good it did ?

Good for you, in my book you're a true Brit, concerned for its future.

[Grouse]

4 hours ago, ferguston said:

What has Brexit got to do with the English, Northern Ireland, Scottish, and Welsh education systems or, was that a "typo" ?

Voting Brexit is inversely correlated with educational attainment. Infer whatever you wish.

[Proboscis]

5 hours ago, ferguston said:

What has Brexit got to do with the English, Northern Ireland, Scottish, and Welsh education systems or, was that a "typo" ?

I think his point was that the UK education system was responsible for educating the people who voted Brexit. Since voting Brexit is evidence of faulty reasoning and lack of knowledge at least with respect to future UK living standards, the UK education system is at fault.

[PeCeDe]

9 minutes ago, Grouse said:

Voting Brexit is inversely correlated with educational attainment. Infer whatever you wish.

That's a sad but true commentary, and not just for Britain. Leads to all kinds of missteps by todays leaders. If you don't know history you're destined to re-live it. 

[dunroaming]

Not sure I completely agree about the education bit.  Everyone was lied to, especially by the leave campaigners.  It was easier for them to do so because they could just make it up whereas the remain camp could only try to justify staying in and we knew what that entailed.  Therefore their arguments were based on warnings of what would "probably" happen if we left the EU and that now, in hindsight, turns out to be well founded.

 

However the EU was flawed and peoples frustration with it was understandable.  What wasn't made clear, again by the Brexit boys, was a balanced expectation of the consequences.  So we are where we are and there is no chance of going through Brexit without serious damage that will take many years to recover from.  

 

Question is at what point (and before it is too late), do we say "OK this isn't going to work, lets scrap Brexit and work within the EU to bring about the much needed changes".  That is what a proper government would do but with this shower it is unlikely to happen. 

[Grouse]

12 minutes ago, dunroaming said:

Not sure I completely agree about the education bit.  Everyone was lied to, especially by the leave campaigners.  It was easier for them to do so because they could just make it up whereas the remain camp could only try to justify staying in and we knew what that entailed.  Therefore their arguments were based on warnings of what would "probably" happen if we left the EU and that now, in hindsight, turns out to be well founded.

 

However the EU was flawed and peoples frustration with it was understandable.  What wasn't made clear, again by the Brexit boys, was a balanced expectation of the consequences.  So we are where we are and there is no chance of going through Brexit without serious damage that will take many years to recover from.  

 

Question is at what point (and before it is too late), do we say "OK this isn't going to work, lets scrap Brexit and work within the EU to bring about the much needed changes".  That is what a proper government would do but with this shower it is unlikely to happen. 

Now!

[Grouse]

56 minutes ago, Grouse said:

Voting Brexit is inversely correlated with educational attainment. Infer whatever you wish.

http://metro.co.uk/2017/02/07/if-you-voted-for-brexit-youre-not-going-to-like-this-6433145/

[PeCeDe]

12 minutes ago, Grouse said:

Now!

 

27 minutes ago, dunroaming said:

no chance of going through Brexit without serious damage that will take many years to recover from.  

 

Question is at what point (and before it is too late), do we say "OK this isn't going to work, lets scrap Brexit and work within the EU to bring about the much needed changes".  That is what a proper government would do but with this shower it is unlikely to happen. 

Wish you were right, but don't forget May is holding on by the skin of her teeth, courtesy of some rather skittish Northern Irelanders, and I do believe Corbyn is a dark closet Brexiteer. Have to say there's an evil side of me hoping for Corbyn to come into power and try to spend everyone else's money, thus increasing my small stipend, but of course forex will soon take care of that. At this point anyway, I see still Brexit happening, and Corbyn has sworn up and down there won't be a second Brexit vote, as has May. We all know they're both respected politicians, and therefore should be believed.

[dunroaming]

2 minutes ago, PeCeDe said:

 

Wish you were right, but don't forget May is holding on by the skin of her teeth, courtesy of some rather skittish Northern Irelanders, and I do believe Corbyn is a dark closet Brexiteer. Have to say there's an evil side of me hoping for Corbyn to come into power and try to spend everyone else's money, thus increasing my small stipend, but of course forex will soon take care of that. At this point anyway, I see still Brexit happening, and Corbyn has sworn up and down there won't be a second Brexit vote, as has May. We all know they're both respected politicians, and therefore should be believed.

The situation is bleak and a change of leadership is desperately needed.  Problem then is who? 

[rickudon]

Just like my family - me and son went to university, travel internationally and voted to remain. My brother and his wife didn't get degrees (but higher education), and rarely travel outside the UK - both Brexiters ........

[PeCeDe]

6 minutes ago, dunroaming said:

The situation is bleak and a change of leadership is desperately needed.  Problem then is who? 

Similar position the US found itself in when the choice was Hilary or Trump. Hopefully there's some equivalent of "Lord of the Admiralty" who'll step in to recover from the disaster of appeasement. It would be funny if it weren't so damn serious.

[PeCeDe]

10 minutes ago, rickudon said:

Just like my family - me and son went to university, travel internationally and voted to remain. My brother and his wife didn't get degrees (but higher education), and rarely travel outside the UK - both Brexiters ........

Here's a great quote for you, and may help us understand why we have the opinions we have, it's by Mark Twain, love that guy.

 

 “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime.”

[dunroaming]

What I find quite surprising are the Brits who post on TV that live in Thailand or visit regularly and still voted for Brexit.  It was common knowledge the pound would take a hit and could drop further after we leave and that affects their pensions or incomes if that comes from the UK. What is the up side for them who live abroad as immigrants?  Nobody expects the ordinary bloke in the street to understand all the intricacies of how economics work but some things are as obvious as the nose on their faces.  It seems however they prefer to cut off their noses to spite their face. 

[PeCeDe]

2 hours ago, dunroaming said:

What I find quite surprising are the Brits who post on TV that live in Thailand or visit regularly and still voted for Brexit.  It was common knowledge the pound would take a hit and could drop further after we leave and that affects their pensions or incomes if that comes from the UK. What is the up side for them who live abroad as immigrants?  Nobody expects the ordinary bloke in the street to understand all the intricacies of how economics work but some things are as obvious as the nose on their faces.  It seems however they prefer to cut off their noses to spite their face. 

Not sure that Brits who voted for Brexit deliberately decided to cut off their nose, but of course that is what they did. And to many Brits stuck at home in dead end jobs, with even that under attack from automation, cheaper EU labour, foreign competition etc., the siren calls from Boris Johnson and his mob were hard to resist and mixed in with that memories of the past and long gone British Empire the call too once more be independent was hard to resist. It took an analysis of where Britain truly ranks in the world today to understand why staying with the EU was essential, a skill not taught in todays education systems until you get in to University and even beyond that with a years of facing hard facts in the real world.  As I travel I see Xenophobia everywhere, no one is completely innocent, but it has to be dealt with firmly and now before we all spin out of control.

 

 

[dunroaming]

11 minutes ago, PeCeDe said:

Not sure that Brits who voted for Brexit deliberately decided to cut off their nose, but of course that is what they did.

I don't blame anyone for voting for Brexit, I know a few who did it for the reasons you state.  My gripe is that now it is obvious that it was a mistake and they voted based on the lies that they were told, why can they not just accept it was folly and call to have either another vote with hindsight, or join all of us calling for Brexit to be scrapped.

[PeCeDe]

3 minutes ago, dunroaming said:

I don't blame anyone for voting for Brexit, I know a few who did it for the reasons you state.  My gripe is that now it is obvious that it was a mistake and they voted based on the lies that they were told, why can they not just accept it was folly and call to have either another vote with hindsight, or join all of us calling for Brexit to be scrapped.

Hope you're right, one of many benefits would certainly be the pound taking an immediate jump northwards, and to me in my little world that's what I'm looking for.

[dunroaming]

1 hour ago, PeCeDe said:

Hope you're right, one of many benefits would certainly be the pound taking an immediate jump northwards, and to me in my little world that's what I'm looking for.

You and millions of others!

[PeCeDe]

13 hours ago, dunroaming said:

I don't blame anyone for voting for Brexit, I know a few who did it for the reasons you state.  My gripe is that now it is obvious that it was a mistake and they voted based on the lies that they were told, why can they not just accept it was folly and call to have either another vote with hindsight, or join all of us calling for Brexit to be scrapped.

As far as a successor to May, I would have chosen BoJo, but given his power grabbing stance in Brexit and subsequent behaviour I don't think so... Shame really because if anyone could have drawn Brexit to an abrupt end he could have. I know I tend to the cynical side, but life's experiences have made me that way and I think Britain will keep on heading for the wall. I like the Missouri State licence plate motto, "Show me," and I see no leader with the guts to actually do that.