Business confidence highest since 2007 - Green shoots flowering?
Scroll to see replies
Original post by meenu89
Excited as I am, I think we should still remain on the cautious side.
Its hard not to get excited by this export lead recovery isn't it? :P
Original post by Quady
Its hard not to get excited by this export lead recovery isn't it? :P
Do you think there will be any difference in the rate of recovery when Labour get voted into government in 2015?
Original post by MathBonus
Do you think there will be any difference in the rate of recovery when Labour get voted into government in 2015?
No not at all, there was nothing to choose between the positions going into the election.
But right wingers saying their strategy 'worked' is pretty disingenuous.
The is not was designed to happen, at least Labour weren't suggesting an export lead recovery would happen.
Considering all the false peaks we've seemed to have, I actually believe this is the true end of this terrible recession.
Original post by Quady
Not really this ios the position we were supposed to be in about 18 months ago according to the projects following the last election.
Comparing US economic activity given a different policy approach is quite stricking to our position.
Comparing US economic activity given a different policy approach is quite stricking to our position.
Worth noting however that our deficit has fallen faster as a percentage of GDP and growth this year beats theirs, hence they may be in austerity for longer than the UK.
If we look at growth figures from 2010-2012 then we get (cumulative)..
USA: 6.8%
UK: 2.7%
So that's a 4.1% difference (we'll beat them this year so probably around 3.5%) however if we we look at the fall in deficit to GDP (i.e. how effective austerity has been)..
USA: 3.6%
UK: 5.3%
We see here that the UK has cut spending more effectively than the USA (though they've released figures for this year and the sequester has been mighty, 4.4% off - we need to wait until January to compare but we should have knocked a similar amount given the growth).
Essentially you can see that while growth and unemployment are better in the USA to date if we continue to be cutting faster and now growing faster it's entirely plausible that we could have taken most if not all of the growth deficit to the US back by the time both countries reach surplus because we may have 1-3 years over them in which we've already reached surplus and presumably stopped cutting.
(edited 10 years ago)
Original post by Rakas21
Worth noting however that our deficit has fallen faster as a percentage of GDP and growth this year beats theirs, hence they may be in austerity for longer than the UK.
If we look at growth figures from 2010-2012 then we get (cumulative)..
USA: 6.8%
UK: 2.7%
So that's a 4.1% difference (we'll beat them this year so probably around 3.5%) however if we we look at the fall in deficit to GDP (i.e. how effective austerity has been)..
USA: 3.6%
UK: 5.3%
We see here that the UK has cut spending more effectively than the USA
If we look at growth figures from 2010-2012 then we get (cumulative)..
USA: 6.8%
UK: 2.7%
So that's a 4.1% difference (we'll beat them this year so probably around 3.5%) however if we we look at the fall in deficit to GDP (i.e. how effective austerity has been)..
USA: 3.6%
UK: 5.3%
We see here that the UK has cut spending more effectively than the USA
Precisely how big do you think the underlying deficit is? The last pre-crisis budget had a deficit of about £35 billion, and debt-to-GDP ratio was lower than when the Conservatives had left office. The scale of the deficit is essentially a cyclical phenomenon, which makes attempting to cut it during an economic downturn counterintuitive and dishonest. The deficit would largely dissipate of its own accord as economic growth returned, which renders the sacrifice of economic growth for deficit reduction a fundamentally bad deal; it's lose-lose.
The Conservatives are more than welcome to crow about the most recent growth figures; the significance they assign to the figures merely cements the common perception of a government out of touch, failing to address its electoral liabilities and struggling to convey a clear and consistent message. The Conservatives are deluding themselves if they think that growth a percentage point or two above annualised trend in the 2 years leading to the general election will save them from the pending bloodbath.
The exceptionally unequal distribution of growth in incomes means that the people the Conservatives need to be convincing won't actually see any real alteration to their circumstances, in which case the Conservatives may actually simply be drawing attention to other perceived policy failings.
In terms of the economic side of things, seeing above trend growth after a downturn is normal and totally consistent with history. Considering we had a flat trend line in growth from when this government came into office until a couple of quarters ago. It seems odd to be trumpeting growth figures that are comparable to what Labour achieved in Q1 - Q3 in 2010. It also draws attention to the fact that the economy nosedived after the Conservatives took power and opted to spread panic over the governments fiscal position, raise taxes, and cut public expenditure in the middle of the worst economic crisis since the Great Depression. Its taken the economy three years to recover from that costly blunder.
(edited 10 years ago)
Original post by MostUncivilised
Precisely how big do you think the underlying deficit is? The last pre-crisis budget had a deficit of about £35 billion, and debt-to-GDP ratio was lower than when the Conservatives had left office. The scale of the deficit is essentially a cyclical phenomenon, which makes attempting to cut it during an economic downturn counterintuitive and dishonest. The deficit would largely dissipate of its own accord as economic growth returned, which renders the sacrifice of economic growth for deficit reduction a fundamentally bad deal; it's lose-lose.
The Conservatives are more than welcome to crow about the most recent growth figures; the significance they assign to the figures merely cements the common perception of a government out of touch, failing to address its electoral liabilities and struggling to convey a clear and consistent message. The Conservatives are deluding themselves if they think that growth a percentage point or two above annualised trend in the 2 years leading to the general election will save them from the pending bloodbath.
The exceptionally unequal distribution of growth in incomes means that the people the Conservatives need to be convincing won't actually see any real alteration to their circumstances, in which case the Conservatives may actually simply be drawing attention to other perceived policy failings.
In terms of the economic side of things, seeing above trend growth after a downturn is normal and totally consistent with history.
The Conservatives are more than welcome to crow about the most recent growth figures; the significance they assign to the figures merely cements the common perception of a government out of touch, failing to address its electoral liabilities and struggling to convey a clear and consistent message. The Conservatives are deluding themselves if they think that growth a percentage point or two above annualised trend in the 2 years leading to the general election will save them from the pending bloodbath.
The exceptionally unequal distribution of growth in incomes means that the people the Conservatives need to be convincing won't actually see any real alteration to their circumstances, in which case the Conservatives may actually simply be drawing attention to other perceived policy failings.
In terms of the economic side of things, seeing above trend growth after a downturn is normal and totally consistent with history.
I agree that there's a cyclical element and that growth would help but i don't think it's wrong to constrain spending. In particular while i agree with the spending cuts largely (or rather the overall amount) i believe the big mistake the coalition made was to halve capital spending in line with Labour's proposal, had this remained much higher then it's plausible that we'd have seen growth higher and the deficit fall quicker.
The point however is that since we're comparing to our international rivals the fact that our deficit has fallen faster anyway means that conceivably we will have 1-3 years over the USA whereby they are still constraining spending more than the UK and in this period we can recoup the growth deficit.
It's a marathon, not a sprint.
As for the political points there's many threads for that but i expect a minority government of either colour in 2015, Miliband is simply not a winner.
Original post by Rakas21
It's a marathon, not a sprint.
It's a marathon, not a sprint.
Precisely. This is why one must question why the Conservatives chose to effect an austerity programme at a time of economic crisis. That is axiomatically the worst time to do so. Of course, we now know that Osborne was influenced by an academic paper that asserted a debt-to-GDP ratio "point of no return", which has subsequently been completely discredited;
If it's a marathon and not a sprint, then it is illogical to significantly cut spending when doing so will nobble growth; only significant economic growth and a return to normal circumstances will bring the deficit back to pre-crisis levels. Delaying that return to normality is nonsensical from all perspectives. Furthermore, deficit financing is cheaper at a time of recession, with 1% interest rates, than at other times.
Finally, we do not get back lost output, and so the assertion that it's a marathon and not a sprint also ignores the fact that deficit-financed output as it will still finance itself, particularly under the current terms for credit. Choosing to forego that output in order to preference deficit reduction comes across as the acme of inability to delay gratification.
As for the political points there's many threads for that but i expect a minority government of either colour in 2015, Miliband is simply not a winner.
Your expectation is at odds with polling data, with political reality, with common sense, and with smart money. It does seem to be a bit of a trope these days for Conservatives and Lib Dems to tell themselves that this self-serving prophecy is a valid political forecast rather than self-delusion.
First, the polls currently project the Labour Party will win outright with a majority of around 70. Second, both coalition parties face a considerable exodus of voters and loyal activists, Conservatives to UKIP and Lib Dems to Labour. Third, the Conservatives couldn't win a majority even in the most favourable political circumstances of 2010; after five years of losses to UKIP, unpopular policy decisions and the collapse of their coalition partner. The electoral mathematics simply does not work for the Conservatives and Lib Dems, the only way you're likely to see a minority government is if Labour's vote declines, which is simply not a credible scenario.
As for Miliband not being a winner, Conservatives have been under a grave misapprehension that the rest of the country shares their sniggering, sneering condascending attitude to Ed Miliband. The same things were said about Margaret Thatcher before the Conservatives won in 1979.
(edited 10 years ago)
Original post by MostUncivilised
Precisely. This is why one must question why the Conservatives chose to effect an austerity programme at a time of economic crisis. That is axiomatically the worst time to do so. Of course, we now know that Osborne was influenced by an academic paper that asserted a debt-to-GDP ratio "point of no return", which has subsequently been completely discredited;
If it's a marathon and not a sprint, then it is illogical to significantly cut spending when doing so will nobble growth; only significant economic growth and a return to normal circumstances will bring the deficit back to pre-crisis levels. Delaying that return to normality is nonsensical from all perspectives. Furthermore, deficit financing is cheaper at a time of recession, with 1% interest rates, than at other times.
Finally, we do not get back lost output, and so the assertion that it's a marathon and not a sprint also ignores the fact that deficit-financed output as it will still finance itself, particularly under the current terms for credit. Choosing to forego that output in order to preference deficit reduction comes across as the acme of inability to delay gratification.
Your expectation is at odds with polling data, with political reality, with common sense, and with smart money. It does seem to be a bit of a trope these days for Conservatives and Lib Dems to tell themselves that this self-serving prophecy is a valid political forecast rather than self-delusion.
First, the polls currently project the Labour Party will win outright with a majority of around 70. Second, both coalition parties face a considerable exodus of voters and loyal activists, Conservatives to UKIP and Lib Dems to Labour. Third, the Conservatives couldn't win a majority even in the most favourable political circumstances of 2010; after five years of losses to UKIP, unpopular policy decisions and the collapse of their coalition partner. The electoral mathematics simply does not work for the Conservatives and Lib Dems, the only way you're likely to see a minority government is if Labour's vote declines, which is simply not a credible scenario.
As for Miliband not being a winner, Conservatives have been under a grave misapprehension that the rest of the country shares their sniggering, sneering condascending attitude to Ed Miliband. The same things were said about Margaret Thatcher before the Conservatives won in 1979.
If it's a marathon and not a sprint, then it is illogical to significantly cut spending when doing so will nobble growth; only significant economic growth and a return to normal circumstances will bring the deficit back to pre-crisis levels. Delaying that return to normality is nonsensical from all perspectives. Furthermore, deficit financing is cheaper at a time of recession, with 1% interest rates, than at other times.
Finally, we do not get back lost output, and so the assertion that it's a marathon and not a sprint also ignores the fact that deficit-financed output as it will still finance itself, particularly under the current terms for credit. Choosing to forego that output in order to preference deficit reduction comes across as the acme of inability to delay gratification.
Your expectation is at odds with polling data, with political reality, with common sense, and with smart money. It does seem to be a bit of a trope these days for Conservatives and Lib Dems to tell themselves that this self-serving prophecy is a valid political forecast rather than self-delusion.
First, the polls currently project the Labour Party will win outright with a majority of around 70. Second, both coalition parties face a considerable exodus of voters and loyal activists, Conservatives to UKIP and Lib Dems to Labour. Third, the Conservatives couldn't win a majority even in the most favourable political circumstances of 2010; after five years of losses to UKIP, unpopular policy decisions and the collapse of their coalition partner. The electoral mathematics simply does not work for the Conservatives and Lib Dems, the only way you're likely to see a minority government is if Labour's vote declines, which is simply not a credible scenario.
As for Miliband not being a winner, Conservatives have been under a grave misapprehension that the rest of the country shares their sniggering, sneering condascending attitude to Ed Miliband. The same things were said about Margaret Thatcher before the Conservatives won in 1979.
Yes well really there is an ideological element to it, the startling figure to some people in the Autumn statement was that public spending as a proportion of GDP would be the lowest since 1948 by 2020.
To some degree yes but i follow the ICM which had the 2010 result 5 weeks out and was highly accurate in the 2011 and 2012 council elections. ICM has bar 4 individual months had the Tories 4-8% behind since April 2012 and i find it likely that as we approach the election the polls will tighten. I don't think the Tories will win but i'm not convinced that Miliband will get a majority. I'm also not sold on the mass movement to Ukip being replicated in 2015 and in many seats the Lib Dems are fighting Tories.
Original post by Rakas21
Yes well really there is an ideological element to it, the startling figure to some people in the Autumn statement was that public spending as a proportion of GDP would be the lowest since 1948 by 2020.
I would put significant amounts of money on that not being the case come 2020...
Original post by Rakas21
Worth noting however that our deficit has fallen faster as a percentage of GDP and growth this year beats theirs, hence they may be in austerity for longer than the UK.
If we look at growth figures from 2010-2012 then we get (cumulative)..
USA: 6.8%
UK: 2.7%
So that's a 4.1% difference (we'll beat them this year so probably around 3.5%) however if we we look at the fall in deficit to GDP (i.e. how effective austerity has been)..
USA: 3.6%
UK: 5.3%
We see here that the UK has cut spending more effectively than the USA (though they've released figures for this year and the sequester has been mighty, 4.4% off - we need to wait until January to compare but we should have knocked a similar amount given the growth).
Essentially you can see that while growth and unemployment are better in the USA to date if we continue to be cutting faster and now growing faster it's entirely plausible that we could have taken most if not all of the growth deficit to the US back by the time both countries reach surplus because we may have 1-3 years over them in which we've already reached surplus and presumably stopped cutting.
If we look at growth figures from 2010-2012 then we get (cumulative)..
USA: 6.8%
UK: 2.7%
So that's a 4.1% difference (we'll beat them this year so probably around 3.5%) however if we we look at the fall in deficit to GDP (i.e. how effective austerity has been)..
USA: 3.6%
UK: 5.3%
We see here that the UK has cut spending more effectively than the USA (though they've released figures for this year and the sequester has been mighty, 4.4% off - we need to wait until January to compare but we should have knocked a similar amount given the growth).
Essentially you can see that while growth and unemployment are better in the USA to date if we continue to be cutting faster and now growing faster it's entirely plausible that we could have taken most if not all of the growth deficit to the US back by the time both countries reach surplus because we may have 1-3 years over them in which we've already reached surplus and presumably stopped cutting.
Yeah agreed, they have postponed austerity, hoping they can grow their way out. All I was pointing out was the US have a different strategy and it means they've been growing pretty well.
It would be interesting to see how the debt:gdp ratios have changed, as you say our deficit has closed more quickly, but their numerator has been increasing so I doubt their debt:gdp has increased more quickly than ours.
Original post by Quady
Yeah agreed, they have postponed austerity, hoping they can grow their way out. All I was pointing out was the US have a different strategy and it means they've been growing pretty well.
It would be interesting to see how the debt:gdp ratios have changed, as you say our deficit has closed more quickly, but their numerator has been increasing so I doubt their debt:gdp has increased more quickly than ours.
It would be interesting to see how the debt:gdp ratios have changed, as you say our deficit has closed more quickly, but their numerator has been increasing so I doubt their debt:gdp has increased more quickly than ours.
True but that short term gain may cost them over the length of the deficit battle so to speak if we do manage to reach surplus quicker given that this year we are beginning to take back some of the growth deficit.
In terms of the cumulative debt to GDP increase we have..
USA: 6.4%
UK: 10.3%
That's a 3.9% difference which is largely in line with the growth. The nominal figure is higher for the USA however being above 100%.
Original post by MathBonus
Do you think there will be any difference in the rate of recovery when Labour get voted into government in 2015?
Well considering their promise to deal with energy prices have scared away investors, the only people looking forward to labours return will be large banks who will be able to throw large mounts of cash at the exchequer to fund reckless spending in order to buy votes.
Original post by Rakas21
True but that short term gain may cost them over the length of the deficit battle so to speak if we do manage to reach surplus quicker given that this year we are beginning to take back some of the growth deficit.
In terms of the cumulative debt to GDP increase we have..
USA: 6.4%
UK: 10.3%
That's a 3.9% difference which is largely in line with the growth. The nominal figure is higher for the USA however being above 100%.
In terms of the cumulative debt to GDP increase we have..
USA: 6.4%
UK: 10.3%
That's a 3.9% difference which is largely in line with the growth. The nominal figure is higher for the USA however being above 100%.
Looks like industry is catching uup now.
http://www.telegraph.co.uk/finance/economics/10507677/Hopes-of-broader-recovery-as-industrial-output-rises.html
http://m.bbc.co.uk/news/business-25347403
Real earnings fell by 0.3% in 2013 however inflation has fallen and wages should continue to rise so 2014 may record real earnings growth.
Real earnings fell by 0.3% in 2013 however inflation has fallen and wages should continue to rise so 2014 may record real earnings growth.
Original post by Rakas21
http://m.bbc.co.uk/news/business-25347403
Real earnings fell by 0.3% in 2013 however inflation has fallen and wages should continue to rise so 2014 may record real earnings growth.
Real earnings fell by 0.3% in 2013 however inflation has fallen and wages should continue to rise so 2014 may record real earnings growth.
Not sure I understand the logic there.
2013 inflation has been low. 2014 wage growth has been less than inflation.
You can only imply that wage growth in 2014 might be a little better than low.
You can't imply anything about inflation, given current monetary policy if it stays low that would be 'bad'.
Unemployment will need to drop a tad further before wage growth improves IMHO. Then again, I hope you're right.
Original post by Quady
Not sure I understand the logic there.
2013 inflation has been low. 2014 wage growth has been less than inflation.
You can only imply that wage growth in 2014 might be a little better than low.
You can't imply anything about inflation, given current monetary policy if it stays low that would be 'bad'.
Unemployment will need to drop a tad further before wage growth improves IMHO. Then again, I hope you're right.
2013 inflation has been low. 2014 wage growth has been less than inflation.
You can only imply that wage growth in 2014 might be a little better than low.
You can't imply anything about inflation, given current monetary policy if it stays low that would be 'bad'.
Unemployment will need to drop a tad further before wage growth improves IMHO. Then again, I hope you're right.
Inflation in 2013 was 2.4%, wages rose by 2.1% so a 0.3% fall in real terms.
Given that wages are rising (even if slowly) and inflation has been falling (month on month inflation annualised was 1.2% so there's no inflationary pressure right now) it's entirely plausible that wages will increase faster than inflation in 2014, as should economic growth for the first time since 2007.
Original post by Rakas21
Inflation in 2013 was 2.4%, wages rose by 2.1% so a 0.3% fall in real terms.
Given that wages are rising (even if slowly) and inflation has been falling (month on month inflation annualised was 1.2% so there's no inflationary pressure right now) it's entirely plausible that wages will increase faster than inflation in 2014, as should economic growth for the first time since 2007.
Given that wages are rising (even if slowly) and inflation has been falling (month on month inflation annualised was 1.2% so there's no inflationary pressure right now) it's entirely plausible that wages will increase faster than inflation in 2014, as should economic growth for the first time since 2007.
No, not right now, but inflation is a backwards looking measure. You'd have to be Houdini to know what prices will be like in 12 months time. Not that he did predictions, just magic stuff.
Quick Reply
Related discussions
- AQA - How to remember colours for flame test
- Help to elevate my gsce English lang story
- Did the campus environment influence your uni decision?
- What could I major on based on my IB subjects?
- Spring in Kingston: Petersham Nurseries
- Should I only apply to high tariff unis?
- Edexcel Business GCSE Paper 1 (1BS0/01) - 18th May 2023 [Exam Chat]
- What colours draw the most attention for you? And what emotions does it make you feel
- Advice with driving
- TSR Goes Green: What's your favourite plant?
- Aiming for high grades
- Subject selection
- Procrastinating... by Studying?
- Studying Biology at university
- Graduating without any leadership experiences
- LAE sixth form
- Some poems I have written about the helath service
- This isn't going to get better, is it?
- A-level English lit or french??!
- Help with my a level options
Latest
Last reply 1 minute ago
Edexcel A-level French Paper 3, IRP/Speaking (9FR0 03) - 2024 [Exam Chat]Last reply 1 minute ago
JK Rowling in ‘arrest me’ challenge over hate crime lawLast reply 6 minutes ago
Official Dental Hygiene and Therapy (Oral Health Science) 2024 Entry ThreadDentistry
2867
Last reply 6 minutes ago
can't go to ucl bc intl fees but got home fees for others :(Last reply 7 minutes ago
Woodhouse College applicants 2024Last reply 9 minutes ago
Customer Services Group - Operational Delivery - Administrative OfficersLast reply 12 minutes ago
St dominics, henrietta barnett, RMS, parmiters or girls grammar??Last reply 14 minutes ago
LSE anthropology and law 2024Posted 14 minutes ago
Can I get funding for a full time course if I've studied before?Last reply 15 minutes ago
Degree Apprenticeship at Accenture (assessment centre)Posted 15 minutes ago
Durham vs Exeter Finance/AccountingLast reply 19 minutes ago
Customer Services Group; Executive Officer (EO) - Home Office - Various RolesTrending
Last reply 14 hours ago
Why is the political left now censorious and authoritarian??Last reply 1 week ago
TSR Goes Green: How important will the environment be in this year's election?Last reply 3 weeks ago
Is University of Birmingham prestigious and respected well enough in UK ?Trending
Last reply 14 hours ago
Why is the political left now censorious and authoritarian??Last reply 1 week ago
TSR Goes Green: How important will the environment be in this year's election?Last reply 3 weeks ago
Is University of Birmingham prestigious and respected well enough in UK ?
