can we make this a sister thread to Rolling US Economy Into The Shitbin Thread
what are the signs for the uk economy over the next few months/years? will the US problems hit us hard? is the uk economy now at the late 80s stage, with an early 90s style recession about to come, or are the situations too different to compare?
― s.rose, Thursday, 27 December 2007 03:05 (sixteen years ago) link
Christmas signs were ... interesting, this year. Shops were dead right up until Dec 24, and a lot started sales early. Apparently shoe shops have been hit hard (?). When the sales started today, high streets went *nuts*. There have been huge discounts, and most have been packed out.
More sold after christmas than before, according to some. Sales like that are not a great sign for consumer confidence: more like squirrels preparing for winter.
― stet, Thursday, 27 December 2007 03:14 (sixteen years ago) link
Discounts of 70-80% are tempting shoppers out at marginally higher numbers than last year....looks like a fall to me
Are the situations between UK and US too different to compare? Well i would say the UK is different to the US certainly. It is much much worse here. It is just beginning later. But the levels of debt here are far far higher. The pound isn't important in the way the dollar is and will almost certainly plummet next year, especially if they sacrifice it to try save the housing market.
The media is full of recession talk which can make it a self-fulfilling prophecy as confidence evaporates. It is possible we will soldier on through 2008 before the depression hits proper in 2009 and gathers pace in 2010
When the pound really plummets there may be renewed discussion about joining the Euro, but they (well, some of them) aren't really in much of a good position either (will be interesting to see if the germans want out of the euro game over next few years)
The problem here is trustworthyness of the figures, CPI is a long standing joke, unemployment is 'lowest in 32 years' but doesn't count lots of people out of work. the mantras of 'fundamentals are good' and 'strong economy' are basically spin. and worst of all, in our supposed boom we have just got further and further into debt and have put nothing away for recession (and recessions are always inevitable, its a natural part of cycle)
the problem with this recession is a) its been postponed for so long that its built up an incredible head of steam in the meantime, b) its global.
it will surely be much worse than the 90s recession, but it mightn't bite fully for another year or two, depending if they try give the alcoholic some more booze next year
― cedar, Thursday, 27 December 2007 06:19 (sixteen years ago) link
Also the subprime/offbalancesheet lending is a) not a us problem - it simply surfaced there first, b) hasn't really unraveled here yet (buy-to-let, interest only, 125% mortgages, self-cert all set to blow up here)
― cedar, Thursday, 27 December 2007 06:24 (sixteen years ago) link
dumb question here sorry, but say if the recession hits hard in a year or so what will happen to those of us with hefty overdrafts and credit cards? can the bank demand all the money back in full, or will they raise the interest rates to a crazy amount?
what is expected to happen to the buy-to-let peoples? could this mean a silver lining of newly cheap UK housing?
― s.rose, Thursday, 27 December 2007 13:43 (sixteen years ago) link
It won't lead to them demanding the money back in full (I think 'theoretically' they can do this but it won't happen). I don't know the position on raising interest rates for credit card debt but I don't think that is likely either
Buy to Let people have got a severe problem. Will this mean a silver lining of newly cheap UK housing. Yes and no, it also depends what you mean by cheap. Were they cheap in 2004? if prices fell back to 2004 levels would you consider that cheap? Would you still feel comfortable taking on that much debt in an uncertain (at best) climate? Could you afford the now larger deposit that would be required? And what if you thought you might be able to get something cheaper 6 months down the line? or a year? or 5 years?
― cedar, Thursday, 27 December 2007 15:01 (sixteen years ago) link
And now the banks are looking at their lending a lot more closely would they even be lending you that much anyway?
― cedar, Thursday, 27 December 2007 15:03 (sixteen years ago) link
hmm, is there no ideal situation (for me) in sight, whereby house prices level off to a reasonable affordable level? the buy-to-let people have pretty much fucked everything up for first-time buyers so the worse they get hit the better.
what kind of everyday changes will happen during 2008? like that magazine cover on the other thread 'the end of cheap food', is that likely to happen here? will bills rise? will there be less money for joe public to spend on fripperies?
― s.rose, Thursday, 27 December 2007 23:35 (sixteen years ago) link
"Affordable" is relative. What you can afford now won't be what you can afford when lenders are tightening down something fierce.
Was talking to a comedy octogenarian banker over Christmas. He says teh recession has been put off for so long that it will be so deep we'll need a war to recover. Then he cackled off into apocalyptic visions.
― stet, Thursday, 27 December 2007 23:37 (sixteen years ago) link
haha, wrong thread really, but yeah I am definitely going to be spending more post-holiday (probably in january alone) than I did in the run-up to thanksgiving and beyond
― El Tomboto, Thursday, 27 December 2007 23:38 (sixteen years ago) link
i remember even as a kid that the early 90s were fucking GRIM.
― pc user, Thursday, 27 December 2007 23:43 (sixteen years ago) link
Why do you want to own anyway? Renting is cheaper and you don't have to spend any money on fixing the place if there is a problem
Buy-to-Let people haven't fucked up anything themselves particularly (other than their own finances if bought too late in cycle) - they have merely been part of the bubble
I guess it has been postponed since 2001. As for recovery, they'll do anything to prevent/postpone, which means inflate inflate inflate (already multiple rate cuts talked about next year) and fuck the pound
― cedar, Friday, 28 December 2007 00:58 (sixteen years ago) link
Everyday changes are hard to predict but presumably you noticed prices for certain foodstuffs rocket in 07 anyway (bread?)
It'll be ok if you can keep your job and can reduce your debt exposure
― cedar, Friday, 28 December 2007 01:03 (sixteen years ago) link
or will they raise the interest rates to a crazy amount?
Huge rate rise looming for sub-prime credit card users
― cedar, Friday, 28 December 2007 07:25 (sixteen years ago) link
does that mean other credit card companies will follow and raise their interest rates?
wondering what industries will be hit hardest by all this, and which will thrive. surely the entertainment industry will be first to suffer? or will people *need* to cut loose as a way of forgetting their economic troubles? is there any truth in the old trope 'recession leads to times of exciting music/culture'?
― s.rose, Friday, 28 December 2007 15:56 (sixteen years ago) link
Not really, because 'entertainment' (music and TV in particular) is kind of suffering already for reasons that aren't directly connected to the economy. If people are worried about what's going to be in their pocket in 12 months time the first thing they cut back on is new furniture/kitchens/expensive holidays.
Obviously finance will be hit first in terms of job losses - the question is how long banks can go on buffering the impact of the credit crunch before they start passing it onto the average borrower on the street. Assuming they haven't already.
― Matt DC, Friday, 28 December 2007 18:32 (sixteen years ago) link
Why do you want to own anyway?
it's an investment, or it has been.
the entertainment industry comes a long way down the list of sufferers. for one thing it's a global industry, for another a large section of the uk entertainment industry is protected, and anyway it's often done well in times of crisis. notion of the 'quality' of culture increasing during depression is harder to argue for. there is enough 'culture' stockpiled, i'd have thought, to see you through.
― That one guy that hit it and quit it, Friday, 28 December 2007 18:40 (sixteen years ago) link
Duffy and Adele will pull us through
― blueski, Friday, 28 December 2007 18:44 (sixteen years ago) link
This month is the second month-on-month decrease in house prices since 2000, btw. My little-used emergency credit card sent me a letter the other telling me my rate is now 23%!
― stet, Friday, 28 December 2007 18:46 (sixteen years ago) link
http://image.guardian.co.uk/sys-images/Guardian/Pix/gallery/2005/03/23/John-Major.jpg
― pc user, Friday, 28 December 2007 19:47 (sixteen years ago) link
If I were a Premiership Chairman, I'd be very worried about my season ticket sales next year. Especially if I'd borrowed say, 800M, to become a Chairman. And especially if I'd seen my repayments on that borrowing rise to 100M a year as a result of the credit crunch.
― The Boyler, Friday, 28 December 2007 21:33 (sixteen years ago) link
kids these days have far too much disposable income
― DG, Friday, 28 December 2007 21:39 (sixteen years ago) link
Also, you don't have to up sticks and move every time your landlord decides to raise the rent/sell the house. That said, post-Thatcherite ownership culture has certainly been part of the problem - 20-somethings scraping every penny together in order to be able to afford a deposit can't be good for the economy at all.
― Matt DC, Friday, 28 December 2007 22:55 (sixteen years ago) link
scraping every penny together
YMMV
― Bob Six, Friday, 28 December 2007 23:24 (sixteen years ago) link
Mildly pessimistic viewpoint from the BBC: http://news.bbc.co.uk/1/hi/business/7162733.stm
― s.rose, Saturday, 29 December 2007 17:14 (sixteen years ago) link
As bad as it will be here, it will be worse in Europe (from Rolling US Economy Into The Shitbin Thread)
is this true? how so? i thought the US would have it worse because of the whole subprime thing, which isn't as big an issue over here, is it?
― s.rose, Monday, 14 January 2008 12:42 (sixteen years ago) link
more to lost/at stake here?
― blueski, Monday, 14 January 2008 12:43 (sixteen years ago) link
everyone knows $ is falling but its still worlds reserve currency and a lot of countries are tied to it. £ is stronger/worth more but is already falling against the $. thats right..falling against a falling currency. all time low against euro as well. euro got own problems brewing (ireland spain holland etc) and will the germans want out soon? pound falling so the foreign money we always hear about is getting worse returns as it falls. any interest rate cuts exacerbate that. would you want to be in sterling right now?
strongest drivers of uk economy for last how ever many years? housing, finance, retail. which are the 3 areas about to fall off a cliff? perhaps our manufacturing sector will bail us out?
low unemployment? low inflation? believe that? really? and the job losses are starting already this year
subprime? a us problem...really? lie-to-buy? self-cert? 9xsalary mortgages? 120% mortgages? interest only? buy-to-let? oversupply? never mind extraordinary credit card debt
levels of personal debt in uk surely higher than in us
it happened in us first is all
― laxalt, Monday, 14 January 2008 13:45 (sixteen years ago) link
manufacturing growth fell sharply last month, so count that out too.
― stet, Monday, 14 January 2008 13:52 (sixteen years ago) link
I don't know that we have higher levels of personal debt, however. And for how long can the $ remain the global currency as it turns into pulp?
i was being facetious about manufacturing. didnt realise we had any left
$ as global currency for how long is interesting. the gulf states and china hold a lot of dollars and would really prefer it not to tank. whats the alternative, the euro? the euro is surely merely a 'least worst' option right now. would the euro really be an alternative considering the difficulties ahead it faces?
― laxalt, Monday, 14 January 2008 13:56 (sixteen years ago) link
well, everything has difficulties ahead, but the dollar's woes are pernicious. China won't want it to shift, however.
― stet, Monday, 14 January 2008 14:01 (sixteen years ago) link
of course if they ALL fall...
― laxalt, Monday, 14 January 2008 14:03 (sixteen years ago) link
Gold passed $900 today. Bubblicious
― stet, Monday, 14 January 2008 18:10 (sixteen years ago) link
i'm pissed that the pound is back down to $1.95. my dvd costs are up.
― That one guy that hit it and quit it, Monday, 14 January 2008 18:23 (sixteen years ago) link
stop killing the planet
― blueski, Monday, 14 January 2008 18:37 (sixteen years ago) link
Looks like one. Except, isn't it supposed to be a hedge against inflation and aren't we merely at the beginning of the inflation game? Also how many people do you know with gold? Bubble will surely be when people at work start buying into it (maybe they already are!). Won't gold fall once things start looking ok again..and when will that be?
― laxalt, Monday, 14 January 2008 18:58 (sixteen years ago) link
I know a couple of people who've been buying gold!
― stet, Monday, 14 January 2008 19:00 (sixteen years ago) link
Some of the gold price increase is due to the collapse of the currency it is valued in, i.e. the dollar.
― Ed, Monday, 14 January 2008 19:01 (sixteen years ago) link
Gold is a stupid thing to invest in it is worth very little. Platinum would be a better hedge in this day and age.
― Ed, Monday, 14 January 2008 19:04 (sixteen years ago) link
(i think it's hilarious that the us econ thread is tom being all lolbitchy and the uk econ thread is some ancient s. clover question about simon reynolds!)
― gff, Monday, 14 January 2008 19:08 (sixteen years ago) link
The worse it does the better everything else is so its not too bad
Platinum is subject to VAT?
is it worth very little. the central banks aren't selling it off anymore (and may be buying back in?)
almost of gold price increase is due to collapse of currency its valued in (dollar)..as pound is now falling even against the dollar it makes it go up even faster
and most importantly..what events do you think will bring gold back down?
― laxalt, Monday, 14 January 2008 19:10 (sixteen years ago) link
Platinum is subject to VAt in the UK, not in the channel islands though. Palladium Bullion is also becoming popular.
― Ed, Monday, 14 January 2008 19:25 (sixteen years ago) link
and the conditions which will bring price of gold down?
― laxalt, Monday, 14 January 2008 19:32 (sixteen years ago) link
-- gff, Monday, January 14, 2008 7:08 PM (40 minutes ago) Bookmark Link
^^^
― That one guy that hit it and quit it, Monday, 14 January 2008 19:49 (sixteen years ago) link
http://www.independent.co.uk/multimedia/archive/00263/frontpage190108_263078a.jpg
― laxalt, Saturday, 19 January 2008 15:59 (sixteen years ago) link