UK/world economic outlook

[unclebulgaria67]

Economic growth now seems to be on a downward path now in many countries, with the US just reporting that the latest growth is half of what was expected. Chinas actual growth is apparently about 3% and not the 6.9% reported,which was still lower than previously. UK growth is also slowing.

 

There has been a run of companies reporting losses, which will hit the corporation tax take in the UK and elsewhere. This could well mean that unless further spending cuts are made or taxes are increased, UK and other countries will be borrowing more. Any government spending deficits might be difficult to eliminate.

 

My instinct is that during the next few years we will see UK growth back to less than 1% annually and some of the Banks struggling again. One of the problems with austerity is that consumers reduce spending, people might be reluctant to buy houses etc, due to declining economic confidence. The government might go back to using QE, but that does not do any good long term.

 

If the government wants to boost the economy now is the time to borrow to invest in housing and infrastructure projects. If they don't start this soon, bearing in mind it takes time to start development, they will come to regret it.

[newhereplease help]

I was talking to my hubby last night about this and we both said the same thing, we feel now how we did in mid 2007/08. All we are hearing is job losses, businesses and industries going under etc.. Even talking to family and friends and people are not confident that they will still have ajob in six months. There is a definite air of doom and gloom and it's getting worse.

[unclebulgaria67]

I was talking to my hubby last night about this and we both said the same thing, we feel now how we did in mid 2007/08. All we are hearing is job losses, businesses and industries going under etc.. Even talking to family and friends and people are not confident that they will still have ajob in six months. There is a definite air of doom and gloom and it's getting worse.

 

My guess is the quantative easing money which they fed through the Banks has now had its maximum effect and any economic gain is coming to an end. The Japanese had a long period of using QE and had 20 years of deflation. They have since decided to borrow to invest in their economy and to a certain extent it has paid of.

 

At the May election, people voted in the government to continue austerity, so they could reduce the deficit in order to stop the debt rising. The problem with such a policy, is that it sucks money out of the economy, people spend less and businesses suffer as a consequence. The government are trying to bring in foreign investors to spend money on infrastructure projects, but these are often very slow to make any difference.

 

Personally, i would prefer the government to be borrowing to invest now and getting things done quicker. They could build thousands of houses for rent or rent to buy, which would earn the country money and be an asset. If you are employing thousands of people to do the work, the economy benefits from the taxes they pay and the money they spend benefits businesses. The cost of borrowing is at a record low and they will earn more money than it costs. About 40 top economists advised this action and the government were not interested.

[obiter dictum]

The US Federal reserve has been printing money (Quantitve easing) for years.

The only reason it has got away with this on the world economy is that the USA pays its debts through the oil markets. It is all done on exchange rates using the dollar

 

The yanks import 300 billion dollars a year worth of oil and is currently destabilising these oil producing nations through armed conflict

 

What has happened now is that they got to greedy and started Fracking. It was because of this there is less demand from OPEC so the price of oil has gone into freefall. More than justified as i have no doubt OPEC have cut production more than necessary to stick two fingers up to the Yanks for fracking.

 

No doubt inflation will soon start to rise in the USA which inturn adds a downturn on the world financial markets

[unclebulgaria67]

Osborne won't be getting much business tax from the oil companies, therefore the deficit might be higher next year. They have been warning of making losses.

[tobyjugg2]

My guess is the quantative easing money which they fed through the Banks has now had its maximum effect and any economic gain is coming to an end. The Japanese had a long period of using QE and had 20 years of deflation. They have since decided to borrow to invest in their economy and to a certain extent it has paid of.

 

At the May election, people voted in the government to continue austerity, so they could reduce the deficit in order to stop the debt rising. The problem with such a policy, is that it sucks money out of the economy, people spend less and businesses suffer as a consequence. The government are trying to bring in foreign investors to spend money on infrastructure projects, but these are often very slow to make any difference.

 

Personally, i would prefer the government to be borrowing to invest now and getting things done quicker. They could build thousands of houses for rent or rent to buy, which would earn the country money and be an asset. If you are employing thousands of people to do the work, the economy benefits from the taxes they pay and the money they spend benefits businesses. The cost of borrowing is at a record low and they will earn more money than it costs. About 40 top economists advised this action and the government were not interested.

 

More government based lending for infrastructure projects using and promoting national resources (and the related economy and national skillbuilding) is how it would work well and efficiently, not guaranteeing profits for private sector or foreign governments as will be the case in the nuclear and HS2 builds, and has been in the hospital and other builds.

 

Many here might be surprised to hear that doing it that 'proper' way is one of the proposals of Corbyn, whereas the Tories and the other Labour candidates just carry on throwing the future further into debt for short term headlines.

 

What is the point in using others if the terms mean there is NO RISK for them and the country pays with profits anyway?