Recession

T

Theoneandonly

Well-known member
So we’re officially in a recession until they massage the numbers. What have you noticed, how bad do you think it will be and how long do you think it will last?
 
Matesrates said:
Seems a lot better now than it was a year ago.
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That's because inflation has come down. Still going up at twice the target though, and food inflation is above that.

However, the wider economy has dipped for the last six months and isn't really getting better quickly.
 
Matesrates said:
Sad
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Yes it is. It’s also sad to see layoffs coming to people who don’t know it. Tesla will be letting a lot of people go because China is subsidizing batteries and other ev companies cannot compete with government subsidies such as this. They did the same with furniture and wiped out domestic companies.
 
Theoneandonly said:
So we’re officially in a recession until they massage the numbers. What have you noticed, how bad do you think it will be and how long do you think it will last?
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It's what's known as a technical recession and was fully anticipated because interest rates were kept high to get inflation down so it's no big deal. Low growth was expected. The last quarter showed marginal negative growth of -0.3% which followed a negative GDP in the September '23 quarter. The UK is probably already out of recession but the official figures won't be published until April.
 
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tommytwojags said:
It's what's known as a technical recession and was fully anticipated because interest rates were kept high to get inflation down so it's no big deal. Low growth was expected. The last quarter showed marginal negative growth of -0.3% which followed a negative GDP in the September '23 quarter. The UK is probably already out of recession but the official figures won't be published until April.
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No big deal?!!!! Is this another example of Caring Conservatism?

The latest administration……. Body Shop. Over 2000 jobs at risk. I bet those people think it’s a “big deal”.

news.sky.com

The Body Shop UK enters administration threatening more than 2,000 jobs and 100 shops

Administrators are considering "all options" for the UK business and will let employees know of their fate "in due course" as trading is due to continue through the process.
news.sky.com news.sky.com
 
Mexboroseasider said:
No big deal?!!!! Is this another example of Caring Conservatism?
The latest administration……. Body Shop. Over 2000 jobs at risk. I bet those people think it’s a “big deal”.
news.sky.com

The Body Shop UK enters administration threatening more than 2,000 jobs and 100 shops

Administrators are considering "all options" for the UK business and will let employees know of their fate "in due course" as trading is due to continue through the process.
news.sky.com news.sky.com
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You sound like Rachel Reeves. This is nothing like 2008/9 when the economy shrank by nearly 5%. Already business has picked up in 2024 and forecasters agree that growth will continue over the next few years. Unemployment is low, prices are rising slower than wages. Sad that businesses like Bodyshop and Wilko should fail, but it's not because of any recession.
 
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tommytwojags said:
It's what's known as a technical recession and was fully anticipated because interest rates were kept high to get inflation down so it's no big deal. Low growth was expected. The last quarter showed marginal negative growth of -0.3% which followed a negative GDP in the September '23 quarter. The UK is probably already out of recession but the official figures won't be published until April.
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Explain the 'technical' nature of the recession to the people in @Theoneandonly 's post above.
 
These latest figures don’t seem to have affected the LSE as the FTSE has risen again today so confidence doesn’t seem to be a problem to investors.
 
tommytwojags said:
You sound like Rachel Reeves. This is nothing like 2008/9 when the economy shrank by nearly 5%. Already business has picked up in 2024 and forecasters agree that growth will continue over the next few years. Unemployment is low, prices are rising slower than wages. Sad that businesses like Bodyshop and Wilko should fail, but it's not because of any recession.
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Yes, international corporate banking had a lot to answer for in 2008/09. This time around the cause was particularly British - a PM and Chancellor acting with hubris to burn and crashing the economy. To listen to you all that's happened has been despite the Tories' best efforts.
 
Theoneandonly said:
So we’re officially in a recession until they massage the numbers. What have you noticed, how bad do you think it will be and how long do you think it will last?
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The problem is when the wider economy picks up the benefits dont really filter down to workers or even small businesses. When the wider economy starts to drop then the first casualties are workers and small businesses.

The UK with much of Europe and the States has not really been out of some form of recessionary economic state since the nineties, maybe even the late eighties. Even when economic growth has been high, there has been wage stagnation, cost of living increases outstripping wages / salaries, an average of just under 1% of the working population each year being moved to minium wage jobs and out of the consumptive economy; the price of housing (renting or buying) outstripping wages by a huge amount year on year which entails complex financial instruments and artificially low interest rates to maintain a bouyant housing market which has built huge amounts of risk into the financial and economic system, which falls onto the taxpayer entailing the ongoing need for reduced services provision by government.

This cycle will go on as long as government's maintain economic growth as the principle economic (and social) goal, because that system and that goal keeps bumping up against reality.

I've read that the US might only have 10 to 15 years left until it becomes a second world economy as the boomer wealth gets used up supporting old age and ill health (wealth transfer to big banks, big health care and the top 1% economic strata). As long as the UK retains the NHS then there is still two generations before a similar economic collapse, but the continuing economic cycle as described above (chasing growth) will mean more pressure on a UK government to initiate further privatisation of the healthcare system, and it wouldnt surprise me if a centrist (right) labour government or coalition might be the instigators of that if they can get in to power, in the same way that Blair destroyed the education system by introducing fee based further education.
 
1966_and_all_that said:
Yes, international corporate banking had a lot to answer for in 2008/09. This time around the cause was particularly British - a PM and Chancellor acting with hubris to burn and crashing the economy. To listen to you all that's happened has been despite the Tories' best efforts.
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Particularly British? Tell that to the Germans. In fact, tell it to 20 Eurozone countries as they struggle out of recession.
 
tommytwojags said:
It's what's known as a technical recession and was fully anticipated so it's no big deal. The last quarter showed marginal negative growth of -0.3% which followed a negative GDP in the September '23 quarter. The UK is probably already out of recession but the official figures won't be published
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tommytwojags said:
You sound like Rachel Reeves. This is nothing like 2008/9 when the economy shrank by nearly 5%. Already business has picked up in 2024 and forecasters agree that growth will continue over the next few years. Unemployment is low, prices are rising slower than wages. Sad that businesses like Bodyshop and Wilko should fail, but it's not because of any recession.
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AI will put a lot of people out of work.
 
Well with just over 3% of the population being unemployed, the economy should be booming.
Unfortunately that is such a massively massaged number as the vast majority of non tax payers are not included into the unemployed figure.

An economy with close to full employment should be in massive growth.
(Plus taxation is now so high that those who are tax payers are in major trouble)
 
tommytwojags said:
You sound like Rachel Reeves. This is nothing like 2008/9 when the economy shrank by nearly 5%. Already business has picked up in 2024 and forecasters agree that growth will continue over the next few years. Unemployment is low, prices are rising slower than wages. Sad that businesses like Bodyshop and Wilko should fail, but it's not because of any recession.
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Deluded.

UK insolvencies rising due to high interest rates, says Begbies Traynor | Business | The Guardian

Insolvency specialist recruits more staff as small businesses are hit by tough economic climate
amp.theguardian.com amp.theguardian.com
 
Mexboroseasider said:
Deluded.
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All your 2023 Guardian article says is that higher interest rates are pushing an increasing number of companies into insolvency. That's pretty obvious. Clearly, higher interest rates affect borrowing and inevitably flatline GDP. That's a trade-off for keeping inflation under control. Does that hurt the business sector? Of course it does. Will it work? It's already working. Could the situation have been better? Yes, if the BoE had taken earlier action regarding interest rates. Is the UK unique? No, most countries are struggling to maintain GDP levels. Is this the reason Body Shop is in administration? No, that's because it sells goods people no longer want to buy.
 
tommytwojags said:
All your 2023 Guardian article says is that higher interest rates are pushing an increasing number of companies into insolvency. That's pretty obvious. Clearly, higher interest rates affect borrowing and inevitably flatline GDP. That's a trade-off for keeping inflation under control. Does that hurt the business sector? Of course it does. Will it work? It's already working. Could the situation have been better? Yes, if the BoE had taken earlier action regarding interest rates. Is the UK unique? No, most countries are struggling to maintain GDP levels. Is this the reason Body Shop is in administration? No, that's because it sells goods people no longer want to buy.
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So insolvencies soaring but nothing to do with the government’s handling of the economy then. Or the recession.

www.stewartslaw.com

Insolvency rates hit new highs as 2023 ends

In the final statistics release of 2023, the Insolvency Service confirmed that there were 2,466 registered company insolvencies in November 2023.
www.stewartslaw.com www.stewartslaw.com

But no doubt any growth in the economy would be down exclusively to the unique genius and economic competence of Rishi and his gang.

Oh and let’s not forget the role played by Liz Truss in particular. And the members of the Tory party who thought she was a good choice for PM.
 
Mexboroseasider said:
So insolvencies soaring but nothing to do with the government’s handling of the economy then. Or the recession.

www.stewartslaw.com

Insolvency rates hit new highs as 2023 ends

In the final statistics release of 2023, the Insolvency Service confirmed that there were 2,466 registered company insolvencies in November 2023.
www.stewartslaw.com www.stewartslaw.com

But no doubt any growth in the economy would be down exclusively to the unique genius and economic competence of Rishi and his gang.

Oh and let’s not forget the role played by Liz Truss in particular. And the members of the Tory party who thought she was a good choice for PM.
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Lizz Truss 🤦‍♂️🤦‍♂️🤦‍♂️ and she’s still in denial mode!
 
Mexboroseasider said:
So insolvencies soaring but nothing to do with the government’s handling of the economy then. Or the recession.
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Mainly to do with global increases in borrowing costs and inflation. The economy is what it is. Same as Japan, Germany, Italy etc. Or are you blaming the Tories for those countries' economic difficulties too?
 
Whilst part of the problem is a European thing (gas price increases) or self-inflicted (Brexit), inflation and (lack of) growth is going to define the election. People are poorer now than two years ago, and the GDP per capita is a more accurate indicator of the doldrums that Britain is in.

Sunak cannot take victory laps for halving inflation whilst trying to pass off the recession as beyond his control. I must say I found the Laura Trott (from the Treasury) interview worrying when she seemed unable to grasp - or acknowledge - that debt is as a percentage of GDP is in fact rising and not falling (as she claimed). Basic GCSE level economics.

Hopefully, the inane culture war rhetoric will largely be consigned to the political dustbin and the debate will be more on the cost of living crisis which it aught to have been all along.

It`s always the economy, stupid...
 
What recession??? Richy Sumat is to give a speech later renaming it a Harold so people don't get confused between a recession and a err recession.
 
spudgun said:
Whilst part of the problem is a European thing (gas price increases) or self-inflicted (Brexit), inflation and (lack of) growth is going to define the election. People are poorer now than two years ago, and the GDP per capita is a more accurate indicator of the doldrums that Britain is in.

Sunak cannot take victory laps for halving inflation whilst trying to pass off the recession as beyond his control. I must say I found the Laura Trott (from the Treasury) interview worrying when she seemed unable to grasp - or acknowledge - that debt is as a percentage of GDP is in fact rising and not falling (as she claimed). Basic GCSE level economics.

Hopefully, the inane culture war rhetoric will largely be consigned to the political dustbin and the debate will be more on the cost of living crisis which it aught to have been all along.

It`s always the economy, stupid...
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It is, and that's why this lot talk about anything else. Small boats, taking our jobs, claiming all our benefits will be the rhetoric between now and the election.
 
tommytwojags said:
Really?
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tommytwojags said:
It's what's known as a technical recession and was fully anticipated because interest rates were kept high to get inflation down so it's no big deal. Low growth was expected. The last quarter showed marginal negative growth of -0.3% which followed a negative GDP in the September '23 quarter. The UK is probably already out of recession but the official figures won't be published until April.
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That reads utterly as no big deal, in fact you use the words. Nothing to see here.

You followed it up with a statement that Europe was struggling to get out of recession.

So really.
 
Wizaard said:
doesn't meanThat reads utterly as no big deal, in fact you use the words. Nothing to see here.
You followed it up with a statement that Europe was struggling to get out of recession.
So really.
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As you well know, my comment was about the UK and global economics. The fact that the UK might already be out of recession doesn't mean people aren't struggling with the cost of living. They don't care whether there's a recession or not so long as they can pay their bills.
 
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Chunkylad said:
Well with just over 3% of the population being unemployed, the economy should be booming.
Unfortunately that is such a massively massaged number as the vast majority of non tax payers are not included into the unemployed figure.

An economy with close to full employment should be in massive growth.
(Plus taxation is now so high that those who are tax payers are in major trouble)
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When you have an economy where I think it is 40% ish are living paycheck to paycheck and have no savings, another 25% or so cannot absorb a 400 pound emergency payment. That is 65% ish of workers that are not fully participating in the economy much beyond absolute needs. There is a large proportion of the UK population that has to decide between paying bills and eating: a significant proportion of people in full time jobs need periodic help from food banks. Even if there is only 3% unemployment those other issues, low wages and insecure employment, high living costs etc, show an economy that is broken. Economic growth doesnt matter: it does not reach 70-80% of the population, economic shrinkage really only impacts those people.

The taxation system is skewed so that the very wealthy and major corporations dont really pay very much in tax. The burden on taxation falls on the middle income workers, people who actually work for a living. The government (for at least two decades) has been encouraging people (and businesses with any wealth or even those with ambition of wealth to acquire assets, buy to let homes being a big one which is indirectly but effectively subsidised and the UK economy is now majority rentier based. Asset growth (inflation) is not included as a calculated aspect of GDP but, but impact estimations are made as to the effect on GDP. Asset inflation is also not included in inflation calculations.

Asset growth is also not taxed until they are sold, but anyone relatively savvy can manipulate the tax system to avoid tax on assets.

The basis of a rentier economy is that it leverages the one part of its model which is leveragable: human resource. The more the UK runs to a rentier economy the more more that wages have to be restricted, and the deeper the problem becomes. Wealth creation cannot happen much below the 70th percentile at the moment and that will only increase, and full participation in the economy is not really happening much below that level either, and it is increasing annually at a relativley high rate. Based on the fact we have a consumptive based economy (which is unlikely to change in the near or medium future), there is a tipping point where there is not enough consumers to meet consumptive need to even have a remotely balanced or sustainable economy. Personally, I think we may have already reached that tipping point which is why we have massive food, energy and basic living cost increases, and significant market interest in increasing asset values of basic needs such as utilities and energy providers.

The burden of taxation will have to keep increasing on the wages and expenditure of those middle income workers, simply to pay for tax avoidance and (probable tax cuts if the tories are in power) at the very top end of the income stream and wealth aquisition, and social provision.
 
Rishi has paid 23% of his two million from last year.

I pay a higher rate of tax on substantially less.

There will be tax cuts in the next budget as a bribe. That won't make any difference to the millions who don't pay any, or a minimal amount at best.

Those benefitting won't be spending, they'll just put it away.

It's the poorest who get the economy going because, needs must, they spend all their money locally.
 
The issue is you cannot just keep squeezing those earning between £50-100k for more and more. That might seem a lot in the north however most professions down south pay that and in the cities up north.

Wages have increased but the tax levels didn’t so so many more people are paying higher or super tax to fund those super rich and corporations who avoid tax
 
tommytwojags said:
Particularly British? Tell that to the Germans. In fact, tell it to 20 Eurozone countries as they struggle out of recession.
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No you misunderstand me. I say particularly British because the direct and immediate cause of inflation and market turmoil in this country was precisely the Truss-Kwarteng budget. Yes, there have been European incidents of recession but ours happened when it did precisely for these reasons.
 
A few months ago I posted on here that all the Bank of England interest rate increases would probably lead to recession. I'm no Economist but got A Level Economics.
 
Chunkylad said:
The issue is you cannot just keep squeezing those earning between £50-100k for more and more. That might seem a lot in the north however most professions down south pay that and in the cities up north.

Wages have increased but the tax levels didn’t so so many more people are paying higher or super tax to fund those super rich and corporations who avoid tax
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My view is that increased wages must be recognised with a change in the tax structure. I would reintroduce the 10p rate to help those at the lower end. I would move the standard rate up to £50k. I would then have an intermediate rate of 35p up to £100k. Above that, I would have a 50p rate up to £250k then a 70p rate above that.
 
1966_and_all_that said:
No you misunderstand me. I say particularly British because the direct and immediate cause of inflation and market turmoil in this country was precisely the Truss-Kwarteng budget. Yes, there have been European incidents of recession but ours happened when it did precisely for these reasons.
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It's interesting that you are ignoring the very same factors that have put almost all of Europe into recession and you have thrown the blame on Truss/Kwarteng. Apart from the weak Euro, which did not directly affect the UK, the reasons for the European and global recession, including those in the UK, are cost of living increases, particularly those related to fuel/power, interest rate rises, covid and the war in Ukraine.
 
1966_and_all_that said:
My view is that increased wages must be recognised with a change in the tax structure. I would reintroduce the 10p rate to help those at the lower end. I would move the standard rate up to £50k. I would then have an intermediate rate of 35p up to £100k. Above that, I would have a 50p rate up to £250k then a 70p rate above that.
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Who’s going to pay for that?
 
tommytwojags said:
It's interesting that you are ignoring the very same factors that have put almost all of Europe into recession and you have thrown the blame on Truss/Kwarteng. Apart from the weak Euro, which did not directly affect the UK, the reasons for the European and global recession, including those in the UK, are cost of living increases, particularly those related to fuel/power, interest rate rises, covid and the war in Ukraine.
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Which happened because of the poor way that the Tory Government dealt with the economy, both before Truss/Kwarteng, during their pitiful tenure and subsequently. You don't want to listen directly you? Our economy tanked because of the Tories. If you don't want to listen to me then at least listen to the voters of Kingswood and Wellingborough. Or do you have your head firmly in the sand?
 
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