UK Economy

[to75ne]

thanks for the links frank.

[Iron]

Osborne plans billions in 'credit easing' loans - http://www.bbc.co.uk/news/uk-politics-15907249

There are good reasons why banks aren't lending money to businesses. The saying 'Only fools rush in where angels fear to tread' comes to mind...

Jeff

[superfrank]

more bolux. still trying to solve a debt problem with more debt.

if debt is the problem then repayment is the solution.

buy gold and silver.

[Iron]

more bolux. still trying to solve a debt problem with more debt.

if debt is the problem then repayment is the solution.

It's like Labour are still in power!

According to Friday's Newsnight, there's just £5 billion difference between Coalition spending and Alaistair Darling's proposed spending levels before the election.

And these recent announcement re. support for businesses and home buyers reek of Browneconomics!

I think we've got to a point where there's no major differences on policies between the three main parties!

RIP British democracy!

Jeff

[superfrank]

clueless policies which won't work, it's like pushing on a piece of string.

Multi-billion pound push on UK economy
http://www.bbc.co.uk/news/uk-15914145

Meanwhile the TUC has issued its own plan aimed at reinvigorating the UK's economy.

It has called for a number of measures including cutting VAT, reversing the public sector wage freeze and giving a one-off increase in child benefits before Christmas.

spend, spend, spend.

that AAA rating isn't gonna last long at this rate.

[Euler]

Having read a lot about Keynes though, this would appear to be a classic Keyneisan push economics. I think this will be useful, but how much will never be known. The Labour push was very ineffective as it created new hospital wings and jobs, but that just expanded the governments cost base. This push is in infrastructure which should benefit generations to come. But of course, Japan now has some of the best infrastructure in the world after spending lots on it for 10 years!

[superfrank]

Keynes will be turning in his grave.

His plan was to spend surpluses (accrued during the 'good times') when there was a downturn, in effect to even out the natural cycle.

He never advocated reckless spending during credit booms and reckless borrowing during busts.

[payuppal]

Completely agree.

Yes, large sections of the public like the Keynesian push in a recession.

They are not so keen on the part of Keynes that urges holding expenditure down in good times, however.

As long as we have a politics that is largely based on bidding up public expenditure to win votes, we will be in big trouble.

[Euler]

I agree with both points.

[Iron]

Autumn Statement 2011: Don’t spare the horses tomorrow, George Osborne - http://www.telegraph.co.uk/finance/comm ... borne.html

'At the moment, the Chancellor is pulling off a brilliant confidence trick: persuading the markets that Britain remains a triple-A creditor, able to borrow on the same terms as Germany, while managing an economy with an inflation rate 66 per cent higher than the eurozone’s average, and a national debt that is forecast to hit £1.32 trillion in 2015, nearly 40 per cent greater than today.

Common sense suggests that this will not go on indefinitely. As Mr Osborne puts the finishing touches to his Autumn Statement, he knows that he must deliver much more than illusory savings. With Britain’s debt interest forecast to rise by 13 per cent in this financial year to £50 billion (25 per cent more than the defence budget), there is no scope for a loss of nerve.

Mr Osborne, hitherto a chancy front-runner, will not want to end up like the equine Iron Chancellor: a promising type who was gelded for his troubles'.

Jeff

[CaerMyrddin]

Ironically, governments spent during the boom and now have to take draconian measures during the recession. Brilliant, isn't it?

[superfrank]

Ironically, governments spent during the boom and now have to take draconian measures during the recession. Brilliant, isn't it?

I'm yet to see anything approaching a draconian measure in the UK, that's the problem.

In other countries they've slashed public sector salaries by 20%+, all we've had is a pay freeze for 2 years. Welfare benefits still rising at RPI (5%+).

Debt interest bill of £50bn a year. What a waste.

[Euler]

Debt interest bill of £50bn a year. What a waste.

All these people moaning about capitalism and fundamentally I see it as a political issue, driven by social policies. Am I wearing blinkers or is it everybody else?

I reckon inflation will be much lower in January, much lower.

[superfrank]

I see it as a political issue, driven by social policies. Am I wearing blinkers or is it everybody else?

I can't disagree with that. In my view people were living in a dream world during the boom... it was always going to be unsustainable, but Brown spent like crazy on his socialist dreams (incl. spending from the future with the madness that is PFI) which is why Britain is the most indebted developed nation on earth (as a % of GDP).

I reckon inflation will be much lower in January, much lower.

'not sure about that. the VAT rise will drop out but all this western funny money will end up in commodities again at some point.

the £ is still on the floor - if there was any real optimism about the UK it wouldn't be where it is now.

[mulberryhawk]

Just out of interest, how does the price of gold tend to behave in a deflationary environment?