Global Recession
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@Catogrande said in Global Recession:
It’s always tempting to look for a reason or reasons why we get into such predicaments and then to apportion blame accordingly but in truth it is always a combination of things that provide the environment for things to happen. As @JC said on another thread, the powers that be are largely just passengers.
Certainly we can look back at some decisions and say that even without the benefit of hindsight they were fraught with risk; Europe placing much of its energy dependency on its ideological enemy is a case in point. But what a win it was getting all that cheap gas. Politics is a short term business, it’s only statesmanship that has a long term view.
Agree with you. I wasn't apportioning blame to one particular administration. UK energy policy has been a mess since the 90s. Lots of ruling parties from both main parties chose to kick the can down the road rather than deal with the pain and leave behind a real legacy..
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@stodders said in Global Recession:
Invested in the most reliable (albeit capital expensive) fuel source - nuclear - in the medium to long term (10 - 50 years)
Complete screw-up by Blair who 20 years ago scrapped any new Nuclear power and ran down UK nuclear technology capability only to reverse the decision 5 years later. Both parties went for cheap gas and electricity imports rather than make the hard, long-term choices on nuclear though.
Credit to Johnson who actually started the ball rolling on Small Modular Reactors.
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@Catogrande said in Global Recession:
As @JC said on another thread, the powers that be are largely just passengers.
True, but there's often a big element of short-term and lazy thinking which exacerbates the problems
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@Victor-Meldrew said in Global Recession:
@Catogrande said in Global Recession:
As @JC said on another thread, the powers that be are largely just passengers.
True, but there's often a big element of short-term and lazy thinking which exacerbates the problems
For sure, I’m not saying that political decisions, actions and inactions don’t have an effect, but usually those things happened way in the past. It is the incumbents that are largely passengers in the here and now (and often getting blamed).
It would be good though if whoever the incumbents were, took note of the current issues and then planned more for the long term. But then you keep going back to Harold Wilson’s quote “A week is a long time in politics “.
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Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
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@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
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@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
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@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
It blows my mind how much the media jumps all over negative news. How many modelers were around when inflation was 10%?
Nobody has a clue. Nobody.
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@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
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@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
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@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
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@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
This is an awful thing to say but perhaps it’s needed to kick start the people in this country again. The jobs are out there, everywhere. But the applicants aren’t as people got lazy after Covid and are leading simpler lives. Myself included. But I’ve agreed with my wife to go back to work do I can continue this - I’m fortunate to be in this position. We won’t starve or be cold regardless. But others will as they walk past the 20-30 jobs listed in the supermarket after working their 12 -20 hour week for 500/month after tax etc.
Perhaps if the message is “these changes are not long term and if we all pull together” it will be fine. But that’s NOT the message. It’s indirectly the opposite.
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@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
Well yes, but the belt-tightening is taking place now as the need for it is real and immediate
This is an awful thing to say but perhaps it’s needed to kick start the people in this country again. The jobs are out there, everywhere. But the applicants aren’t as people got lazy after Covid and are leading simpler lives.
Myself included. But I’ve agreed with my wife to go back to work do I can continue this - I’m fortunate to be in this position. We won’t starve or be cold regardless. But others will as they walk past the 20-30 jobs listed in the supermarket after working their 12 -20 hour week for 500/month after tax etc.Agree 110%. Perhaps if people start noticing fewer job ads, they might think they actually take one in case they disappear altogether. Taking it up a notch, it's hard to see a GP here and yet 4 of the 5 GPs in the local practice are part-time on 2-3 days a week - the impact in terms of work days lost is really high in a rural area
Perhaps if the message is “these changes are not long term and if we all pull together” it will be fine. But that’s NOT the message. It’s indirectly the opposite.
There's a complete lack of realism and total tribalism which makes that difficult, sadly. Too many believers in magic solutions.
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@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
Well yes, but the belt-tightening is taking place now as the need for it is real and immediate
This is an awful thing to say but perhaps it’s needed to kick start the people in this country again. The jobs are out there, everywhere. But the applicants aren’t as people got lazy after Covid and are leading simpler lives.
Myself included. But I’ve agreed with my wife to go back to work do I can continue this - I’m fortunate to be in this position. We won’t starve or be cold regardless. But others will as they walk past the 20-30 jobs listed in the supermarket after working their 12 -20 hour week for 500/month after tax etc.Agree 110%. Perhaps if people start noticing fewer job ads, they might think they actually take one in case they disappear altogether. Taking it up a notch, it's hard to see a GP here and yet 4 of the 5 GPs in the local practice are part-time on 2-3 days a week - the impact in terms of work days lost is really high in a rural area
Perhaps if the message is “these changes are not long term and if we all pull together” it will be fine. But that’s NOT the message. It’s indirectly the opposite.
There's a complete lack of realism and total tribalism which makes that difficult, sadly. Too many believers in magic solutions.
That's what happens when you peddle fairytales for too long. People begin to think they are real, not myths.
Both the media and politicians are complicit in this. Stupid policies that have little to no real world benefits to keep ppl sweet in the hope they'll get their vote in the next election cycle. Stupid news stories glorifying how to make easy money through influencing, trading, porn etc. Ppl stop aspiring to work hard and look for the quick, easy option. Which turns out not to be attainable after all.
Add onto this that ppl in the UK are now so quick to say that the govt should solve all their issues rather then taking responsibility to do it for themselves, and you get the society that we now have.
UK has lots of opportunities. It requires hard work and application, but so do most of the best things in life.
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@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
That is an interesting conundrum: if belt tightening happens you risk recession, but if it doesn’t you risk inflation. Most of the economists I know would advocate for avoiding inflation even at the cost of a recession. And I suspect for your average punter inflation is worse because it has immediate personal impact that is felt for a long time. Recessions hurt differently and usually for a shorter duration.
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@JC said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
That is an interesting conundrum: if belt tightening happens you risk recession, but if it doesn’t you risk inflation. Most of the economists I know would advocate for avoiding inflation even at the cost of a recession. And I suspect for your average punter inflation is worse because it has immediate personal impact that is felt for a long time. Recessions hurt differently and usually for a shorter duration.
Long-term debilitating illness or horrific short term injury that is super painful in short term but will heal up.
What a choice 🙈
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@JC said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
That is an interesting conundrum: if belt tightening happens you risk recession, but if it doesn’t you risk inflation. Most of the economists I know would advocate for avoiding inflation even at the cost of a recession. And I suspect for your average punter inflation is worse because it has immediate personal impact that is felt for a long time. Recessions hurt differently and usually for a shorter duration.
Yes, but what is causing this inflation. It's 100% energy prices. Cost of electricity, cost of fuel. Nothing else.
Raising interest rates doesn't cause people to stop spending on these necessities. It's stops them spending money on the other services which causes the recession to be significantly worse than it needs to be.
I am by no means an economist, but there is not a single move, announcement or anything which makes any sense to me.
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@MajorRage said in Global Recession:
@JC said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
@MajorRage said in Global Recession:
@Victor-Meldrew said in Global Recession:
Anecdotal stuff:
The car dealers who didn't want to know me when I as looking at a new car last year are now emailing me with offers - inc 0% finance.
Builders who were booked solid for the next 18 mths are now saying they can do my work in the next few months.
Holiday lets in Cornwall for late & next season are dropping off quite fast.
Feels like this country is kind of talking itself into it honestly.
There's a bit of that, I guess, but there's def. a change in sentiment which the expected rise in energy costs will likely solidify. As long as employment holds up, I think we should be OK though.
The energy costs suck but won’t last forever.
Your observations are all based on ppl tightening belts for reasons they likely haven’t even noticed in reality.
People have noticed stuff though. V. high energy prices may not last longer than 2-3 years (some are predicting up to 5 years) but taking an extra £2k p.a out of pay packets will likely have a huge impact in confidence, spending & the wider economy in the meantime.
Nobody has a clue. Nobody.
For the average Joanne, that's the whole point though, isn't it? They aren't gonna spend money if they think there's hard times ahead which is what the BoE and every other serious forecaster is saying.
Yep exactly. Being talked into it.
Disagree. You can't talk yourself into wishing away economic reality like the need to find an extra £160+ pcm for energy, rising mortgage payments, inflation at 10% and rising, while wages are falling in real terms. That's not doom & gloom forecasting, it's reality.
If jobs hold up, energy prices drop next year, inflation starts to fall & interest rates don't go up to levels needed to control inflation in the past, we should be reasonably OK - but that's a lot of "if's" there. I take your point on being too negative and think Nelson's view that Treasury orthodoxy needs seriously questioning is a good one, but there's some really serious economic risks out there.
I’m not saying these headwinds don’t exist. They do and they are real.
But we aren’t in one (yet) and if you keep saying one WILL happen then ppl will start tightening belts and what will happen will be worse.
That is an interesting conundrum: if belt tightening happens you risk recession, but if it doesn’t you risk inflation. Most of the economists I know would advocate for avoiding inflation even at the cost of a recession. And I suspect for your average punter inflation is worse because it has immediate personal impact that is felt for a long time. Recessions hurt differently and usually for a shorter duration.
Yes, but what is causing this inflation. It's 100% energy prices. Cost of electricity, cost of fuel. Nothing else.
Yes energy prices have caused inflation, but I’ll be surprised if oversupply of money isn’t the major contributor. Supply chain issues / shortages and Covid-driven closure of factories in China will also have had an impact to some degree.
Raising interest rates doesn't cause people to stop spending on these necessities.
Sure they do. But more generally raising prices (of which interest rates are just one) causes a spiral of unwanted choices for consumers. We constantly make choices of that type, it’s just that when inflation rates rise rapidly - and out of step with wages - the choices become more frequent and, ultimately, destructive. And the worst thing is that inflation is a feedback loop. As well as increasing the cost of outputs it lifts the cost of inputs, so you get an ugly multiplier at work. Then it’s final curse is that it’s almost always permanent. The prices at the end of the cycle seldom drop back to pre-inflationary states.
Inflation makes everybody poorer, although some can take advantage of the environment and create offsetting income opportunities, so your pounds’ buying power is less but you have a lot more of them. But it’s devastating for the working poor, who really do make choices between electricity, food, medical treatment and loan repayments.
It's stops them spending money on the other services which causes the recession to be significantly worse than it needs to be.
I am by no means an economist, but there is not a single move, announcement or anything which makes any sense to me.
They don’t make sense to me either! But I think we both know that’s because politics does the driving, and logic and data are in the back seat of the Uber with us.
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I’d be interested to hear your thoughts on why the huge increase in the money supply was not inflationary for the previous 12 years or so. I agree with you BTW that QE was always bound to be an inflationary trigger, but can’t fathom why it’s taken so bloody long.