Financial Times warning on UK economy

crowleyalastair · 2005-05-29T09:20:52+00:00

Are we heading back to the economic malaise of the 70s and 80s ? Here's an ominous warning from todays FT .......... Ominous signs of a slide back to the bad old times By Philip Coggan Financial Times. Published: May 28 2005 03:00 Tony Blair may be regretting the reduction in his UK parliamentary majority. But it could have been a lot worse. It is beginning to look as if he clinched re-election just before the economy turned sour. The UK economy has had an extraordinarily good run, without a single negative quarter for output since 1992. For once, a devaluation (sterling's ejection from the Exchange Rate Mechanism) did not lead to a surge in inflation. The transfer of monetary policy to the Bank of England has been a resounding success. Unemployment has drifted down to much lower levels than in France and Germany. Some of this success has reflected worldwide trends. Inflation, interest rates and bond yields have been low around the globe. Nevertheless, growth has been far stronger than in Britain's European rivals, averaging almost 3 per cent since Labour came to office. But the impressive overall performance has not been without its weaknesses. The long-term decline of manufacturing has continued. Productivity has not significantly improved. Economic growth has depended too much on consumer spending, which in turn has relied on rising debt levels and a buoyant housing market. There has been a persistent trade deficit and the government's fiscal position, strong in Labour's first term, has deteriorated sharply in its second. But while such problems cause concern, judging the size and scale of their impact is very difficult. The government may be running a budget deficit but the overall ratio of debt to gross domestic product is lower than that of many other countries. As the Bank has noted, consumer spending might have been even stronger if homeowners had taken full account of the rise in house prices. Debt has risen but low interest rates mean there have been few...

May 29, 2005 25 Replies

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abelard 21 years ago

i don't care....

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where you will find links to tables on consumption and a relative efficiency table.... you might consider also that perhaps the uk uses a different mix of energy sources....

see above....

not according to my robot....i told you that you are innumerate

you mean a billion.....but what's 999 billion here or there....or even 1 billion for that matter....

i think you may be better if you did....

(should be ? -- $11.7 trillion is 5x our GDP!

what you about now buzz?

no....$11.7 trillion is more like the usa gdp....

stik to speling perhaps

i don't mind if you look at it that way.... but it isn't then much of a trading issue....

regards

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hummingbird 21 years ago

On Mon, 30 May 2005 19:38:20 +0200, abelard mysteriously appeared thru the usenet mist to inform us thus...

OMG another listing.

That obviously explains the variations.

It was early so I'll let you off ;-)

Yes a billion.

At this point I will gracefully withdraw from billions and trillions.

Well forgetting trade, the additional cost of oil at $50 over $30 takes quite a lot of spending power out of the pockets of UK consumers and industry and puts it elsewhere. As you say it's about 0.5% based upon 539,000,000 barrels pa consumption.

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John Redman 21 years ago

"Tim" wrote

I don't think there are too many people spending 900 a year on electricity, to be honest.

Yeah, right - "The price of my house is 749,000, plus 400 for the cost of the wind turbine that still owes me money." I don't think so somehow.

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hummingbird 21 years ago

On Mon, 30 May 2005 11:24:43 +0100, "John Redman" mysteriously appeared thru the usenet mist to inform us thus...

It will all be the fault of the global economy.

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Justine 21 years ago

Under last Labour Govt, we ended up being bailed out by IMF loans. Don't things will get that bad, but things are going to get a lot worse under this mob.

I think there's a good chance Torys will be grateful they didn't get in, they'd end up picking the pieces of Gormless Gordon

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Tim 21 years ago

"John Redman" wrote

We do, and we've actually been thinking about getting a wind generator!

"John Redman" wrote

You're right - they'd just simply ask 749,500 -- without referring to the relevant proportions from the turbine & the rest of the house.

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