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The reccession is officially over!!!! watch

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    The reccession is officially over weve been told as the economy rose by 0.1%. But is this really enough to say that the country is offically out of a reccession? Im no economics guru by any standards. We have all been encouraged to start spending again, but is it too early, with such a small percentage of increase in growth? I would appreciate hearing your thoughts :confused:
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    A recession is two quarters of negative growth. If we've grown by 0.1%, then the recession is over. Questions?
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    intelligence recession still in full swing.
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    (Original post by reiss24)
    The reccession is officially over weve been told as the economy rose by 0.1%. But is this really enough to say that the country is offically out of a reccession? Im no economics guru by any standards. We have all been encouraged to start spending again, but is it too early, with such a small percentage of increase in growth? I would appreciate hearing your thoughts :confused:
    It's never too early :P

    Growth is partially created by our spending, with Consumption (C) being a sizeable chunk of Aggregate Demand (AD)
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    Not far off 0% growth, as Gordon would say.
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    It's not that suprising we have grown a little when many billions were taken from the taxpayers to be pumped into the banks to save the economy. But the problem is that all that has done is deal with the symptom but not the disease.

    Also interest rates have been absolutely shocking for ages. I don't know about everyone in the country obviously but I personally used to have decent savings from gap year earnings; but as interest rates are so poor I decided to not bother with the hassle of a student loan and to use my savings instead, which obviously means less/no savings now.

    If this is indeed typical of people across the UK, they'll have withdrawn and spent their savings recently. That's good for the economy in the short-term but it means in the long-term that money wont be spent later on, low interest rates can't produce an incentive to spend if the moneys all gone now!

    Expert economists are saying that for either stable or long-term growth we need to increase our exports to other countries, in other words become more globally competitive. I think we need to start extending our exports out to the new big economies of the world such as India and China.
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    Being "officially" out of recession means nothing in practice. America officially came out of it in October last year, but unemployment - the crucial thing for the economy - is still rising at a steady pace.
    The UK will come out of recession properly when job gains replace job losses.
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    (Original post by Student2806)
    Being "officially" out of recession means nothing in practice. America officially came out of it in October last year, but unemployment - the crucial thing for the economy - is still rising at a steady pace.
    The UK will come out of recession properly when job gains replace job losses.
    Didn't unemployment go down a little recently? Probably only short term, but good news nonetheless!
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    (Original post by Student2806)
    Being "officially" out of recession means nothing in practice. America officially came out of it in October last year, but unemployment - the crucial thing for the economy - is still rising at a steady pace.
    The UK will come out of recession properly when job gains replace job losses.
    ...which they are which was announced last week
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    (Original post by CandyFlipper)
    Didn't unemployment go down a little recently? Probably only short term, but good news nonetheless!
    (Original post by Quady)
    ...which they are which was announced last week
    Numbers can be deceptive...
    Yes, unemployment fell by 7,000 (from a total of 2.5 million) from September to November, but the number of people classed as 'economically inactive' (neither working nor looking for work) rose.
    A crucial figure is that full time employment still fell by 113,000.
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    (Original post by Student2806)
    Number can be deceptive...
    Yes, unemployment fell by 7,000 (from a total of 2.5 million) from September to November, but the number of people classed as 'economically inactive' (neither working nor looking for work) rose.
    A crucial figure is that full time employment still fell by 113,000.
    Still different to the US which is what you were saying.
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    (Original post by CandyFlipper)
    If this is indeed typical of people across the UK, they'll have withdrawn and spent their savings recently. That's good for the economy in the short-term but it means in the long-term that money wont be spent later on, low interest rates can't produce an incentive to spend if the moneys all gone now!
    Interestingly, the opposite seems to have happened. See http://www.bankingtimes.co.uk/011020...reases-to-5-6/. There's been quite a change of culture, I think: people feel very differently to the mid-2000s when people spent like mad because they thought the boom would never end.

    Interest rates are low, but the scarcity of credit means that you can still get a decent return on capital - you can still get good rates, just not on current accounts. Most of the banks are doing 4.3%-ish AER on fixed accounts, and you can get very good returns on bonds at the moment.

    (Original post by Student2806)
    Numbers can be deceptive...
    Yes, unemployment fell by 7,000 (from a total of 2.5 million) from September to November, but the number of people classed as 'economically inactive' (neither working nor looking for work) rose.
    A crucial figure is that full time employment still fell by 113,000.
    However, that was almost totally driven by an increase in the number of students - see http://www.statistics.gov.uk/cci/nugget.asp?ID=12. Whether that's a good or a bad thing in the long-term is up to debate.
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    (Original post by Student2806)
    Being "officially" out of recession means nothing in practice. America officially came out of it in October last year, but unemployment - the crucial thing for the economy - is still rising at a steady pace.
    The UK will come out of recession properly when job gains replace job losses.
    According to this > http://www.esrc.ac.uk/ESRCInfoCentre...onbritain.aspx

    Unemployment: The full impact of a recession may not feed through to job losses until several quarters after the recession officially begins. In the 1980s and 1990s, it was five years after the recession began before unemployment fell to its pre-recession levels.
    National income per head is predicted to take until March 2014 to return to its level in March 2008.
    So yes, you're right.
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    (Original post by reiss24)
    The reccession is officially over weve been told as the economy rose by 0.1%. But is this really enough to say that the country is offically out of a reccession? Im no economics guru by any standards. We have all been encouraged to start spending again, but is it too early, with such a small percentage of increase in growth? I would appreciate hearing your thoughts :confused:
    OP I think you have a few terms muddled up! A recession is two quarters of negative growth, and not anything else! And the small positive growth in the last quarter shows that we are no longer in a recession!
    The effects of the recession can still be felt. But, we are not in recession.
    Maybe to put it in perspective, governments usually aim for an economic growth of 2% (unless of course you're China!) because its a stable number. So 0.1% is not so bad in comparison!
    Also, the government kept begging us to start spending, because of this thing called Aggregate Demand. Well to put it short Consumer Expenditure aka people spending, is the biggest thing in the economy, compared to things like international trade, government spending etc. So when the recession happened, well even before hand, (because a recession is two quarters of negative growth) the government really wanted us to spend. Because when the economy looks shaky people don't want to spend and they save just in case! But by not spending, the recession is prolonged and made worse!
    Tbh the government has tried different ways to make us spend if you think about it, such as reducing VAT, reducing interest rates, car scrappage scheme!
    But its okay to feel sceptical about spending, just because we are out of recession that doesn't mean businesses will stop closing magically!
    Being out of recession will have a good effect on businesses, but it takes time to effect everybody!
    Does this make sense, or am I confusing you! Feel free to ask me anything if you are stuck and if I can I will help!!:cute:
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    yeah but with things like the car scrapage scheme going and VAT going back up and all things the government used to boost the economy ending, I doubt it is going to be a steep climb out of the recession.. But the news are trying to keep it positive, I guess so that people go and spend more to help boost it more..
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    The UK borrowed roughly £700 billion to save its economy and just because it's theoretically out of recession, it doesn't mean that it's realistically out of 'recession'.
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    (Original post by CandyFlipper)
    It's not that suprising we have grown a little when many billions were taken from the taxpayers to be pumped into the banks to save the economy. But the problem is that all that has done is deal with the symptom but not the disease.

    Also interest rates have been absolutely shocking for ages. I don't know about everyone in the country obviously but I personally used to have decent savings from gap year earnings; but as interest rates are so poor I decided to not bother with the hassle of a student loan and to use my savings instead, which obviously means less/no savings now.

    If this is indeed typical of people across the UK, they'll have withdrawn and spent their savings recently. That's good for the economy in the short-term but it means in the long-term that money wont be spent later on, low interest rates can't produce an incentive to spend if the moneys all gone now!

    Expert economists are saying that for either stable or long-term growth we need to increase our exports to other countries, in other words become more globally competitive. I think we need to start extending our exports out to the new big economies of the world such as India and China.
    And where does the money go?! TO MORE PEOPLE WHO WILL SPEND IT! People withdraw there money and come in to McDonalds to buy their big macs, this is £2.09 that £2.09 goes towards MY wages and then when my money goes in to BANK I will go and buy a Greggs with that, it's how the economy runs! MULTIPLYER FTW!
    Also surly you should of taken the loan out as interest rates are so low! So you won't have to pay as much back.
    You really need to do some economics lessons before preteneding to know what your talking about.
    Also, all this **** about exporting to India and China, do you think we don't try to? Do you think we see this massive market making up over a quarter of the earths population and just go..."Nah **** it, can't be bothered." I don't think so matey.
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    (Original post by sakina101)
    A recession is two quarters of negative growth. If we've grown by 0.1%, then the recession is over. Questions?
    The problem is that 0.1% is well within the margin of error of the calculations. In addition, a couple of months ago the Government just injected a load of freshly-minted money into the economy; a highly inflationary act. It's far too early to tell whether this is the "green shoots" of real growth or just inflation.

    Please please note, inflation =/= growth. The government aims for 2% inflation, not 2% growth. So while the economy has grown 0.1% in the last quarter, inflation is running at 3% as measured by the CPI[1].

    This video is an entertaining explaination of two perspectives on the economics of recession.

    [1] http://www.statistics.gov.uk/cci/nugget.asp?ID=19
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    offically over yes, but does that mean much to us, no
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    (Original post by morg)
    offically over yes, but does that mean much to us, no
    I think you'll be surprised how much it means in the Jan/Mar quarter. As we've achieved some form of Economic Growth I think people will feel more relaxed and begin to spend a little more freely. We're only just out but it is unlikely after such negative growth we will slide back into recession.

    May I add that this is a belated Christmas present for our Right Honourable leader.
 
 
 
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