Worse than expected: triple-dip recession looms as economy shrinks by 0.3% - Business News - Business - The Independent
This isn't really news is it? As the world adjusts globally to a new eastern dominated economy, old school countries like the UK will gradually lose out. Unless they adapt to new technology, labour markets become more flexible, beauracracy reduced, the entitlement attitudes are adjusted.
That's just one of several factors going on in the UK though:
- Ham strung by domestic banks that are basically bankrupt there is limited credit available to businesses to start up new enterprises.
- Additionally, private debt is still at enormous levels. Until people pay down their own debts enough to feel comfortable, there can be no great growth.
- Demographics are also at play here. Like most western economies, the UK had a huge Baby Boomer population which is steadily and increasingly retiring RIGHT NOW. They all want lovely pensions, free bus passes, free telly, free electricity, free bloody everything. The larger this pool of people who want free stuff gets the more pressure comes on government finances and the few of us who work have to hand over more in taxes to pay for it all. The more taxes are paid, the less money is available in the system for people to buy things and boost the economy.
- The UK housing market is still massively overpriced (with houses still priced at more than 8x average income) and that needs to correct before people will feel that they can afford other luxuries in their life.
- The Bank of England's decision to print money (Quantitative Easing) has caused inflation to run riot as Sterling loses value against all currencies. We used to joke about the New Zealand dollar being the equivalent of the Polish Zloty in the 90s. That is no longer accurate. The pound holds no store of value any more, and every day anything imported becomes a little bit more expensive the longer a low interest, quantitative easing world continues. And in a country built on imported trade, that means everything becomes more expensive.
- And the slow lingering death of the high street continues to be blamed on the government. Which is ridiculous. The government don't run shops. They don't charge rents. They don't charge rates. They don't bill for electricity, gas, etc. They do have a corporation tax which is supposed to be paid on profits. That corporation tax has been drifting down over recent years, so that's hardly been an impacting factor on retailers success either. What is causing the death of the high street? People not having enough money to spend (because they are overly indebted) and choosing to spend online rather than travelling to shops. You can point fingers all you like, but if you buy online you have caused the demise of the high street. It is the retailer who should have adapted to this new paradigm, not the government.
Commenters on the Independent article exclaim unbelievably that the FTSE 100 continues to go up while the economy dips. The FTSE 100 consists of massive multi-national companies that operate AROUND THE WORLD, not just in the UK. This astonishes me. How can people not realise this?
If you continue to read through the comments on the Independent's article, you'll realise another amazing fact. The country's populace (or at least the Independent's readers) are economically illiterate and financially inept fools who expect the government to pay for everything. They whinge about Austerity and come up with nick names for the UK's Chancellor of the Exchequer (Minister of Finance) George Osborne.
People, THERE IS NO AUSTERITY. The UK is pumping £120 billion pounds of borrowed finance into the economy every year. If they didn't there would need to be actual and real significant cutbacks in all the lovely services, benefits, NHS, etc. the people enjoy. This is massive Keynesian economics. And does it work? Judging by the whinging, it does not.
The scale of the financial crisis was so great when it began in 2007 I said it would take 10 years before anything returned even close to what it was before. We are 5-6 years in now. There is still about 5 years to go.
Growth takes hard work not complaining and asking someone else to do your job. Stop blaming everyone else and get on with it.
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