Politics

[peasepud 59]

The facts are that the economy has been growing and every major forecaster is forcasting that this growth will continue. Employment is also rising and is also forecast to continue with a net reduction in unemoployment by the end of the parliament. You can quote this guy til your blue in the face but that doesnt mean you or he is right. His your doom and gloom scenario is not currently happening, the opposite is happening and forecast to continue.

 

Going to be difficult to see how when 650k are to be added to the 2.47m already unemployed just through the Public sector cuts.

[Christmas Tree 4848]

The facts are that the economy has been growing and every major forecaster is forcasting that this growth will continue. Employment is also rising and is also forecast to continue with a net reduction in unemoployment by the end of the parliament. You can quote this guy til your blue in the face but that doesnt mean you or he is right. His your doom and gloom scenario is not currently happening, the opposite is happening and forecast to continue.

 

 

 

Its all summed up in these couple of sentences for me. You have proved time and again you haven't got a clue what you are talking about, but at least you are consistent - you believe the tories know what they are doing, and you are backing them up

 

I don't mind a bit of blind political support, in my opinion you know what your basic principals are and you support the party that represents them. I'll be honest CT, I have a lot more respect for someone like you, who has picked a side and is sticking with it, than for people who don't vote or who are swayed by whoever is being supported by Murdoch at the time.

 

I obviously think you are wrong, and disagree with pretty much everything you post, but I'll be honest its these floating voter wankers I cant stand

 

Thanks for the compliment (I think )

 

The paragrapgh that you have highlighted that you say sums up that I havent got a clue confuses me. Those are all forecasts that are FACTS.

 

I havent made them up, official Independant groups are forecasting them.

 

I can appreciate anyone having a different leaning in politics and have no problem with that, but using that paragraph to say I have no clue seems strange.

[Christmas Tree 4848]

The facts are that the economy has been growing and every major forecaster is forcasting that this growth will continue. Employment is also rising and is also forecast to continue with a net reduction in unemoployment by the end of the parliament. You can quote this guy til your blue in the face but that doesnt mean you or he is right. His your doom and gloom scenario is not currently happening, the opposite is happening and forecast to continue.

 

Going to be difficult to see how when 650k are to be added to the 2.47m already unemployed just through the Public sector cuts.

 

 

Heres the forecast Pud

 

http://budgetresponsibility.independent.go...asts_190810.pdf

 

BTW Im not disagreeing its going to be difficult or that it WILL happen, only that the people with all the zillions of data forecast that it will.

 

The bottom line is we will have to wait and see, however it does seem that there are still lots of levers left to pull and by all accounts it looks as though the boe is going to do even more quantitive easing next month

 

Also bye the way, a little chappie arrived yesterday during the West ham Game weighing a wapping 9lb 4oz. Not sure whether he'll be Red or Blue but he will definitely be black and white

[Rob W 0]

congrats!!!

[ChezGiven 0]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

[Park Life 71]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

Spot on.

[ewerk 31221]

The facts are that the economy has been growing and every major forecaster is forcasting that this growth will continue. Employment is also rising and is also forecast to continue with a net reduction in unemoployment by the end of the parliament. You can quote this guy til your blue in the face but that doesnt mean you or he is right. His your doom and gloom scenario is not currently happening, the opposite is happening and forecast to continue.

 

Going to be difficult to see how when 650k are to be added to the 2.47m already unemployed just through the Public sector cuts.

 

The private sector is going to solve all our problems. Duh.

[Park Life 71]

The facts are that the economy has been growing and every major forecaster is forcasting that this growth will continue. Employment is also rising and is also forecast to continue with a net reduction in unemoployment by the end of the parliament. You can quote this guy til your blue in the face but that doesnt mean you or he is right. His your doom and gloom scenario is not currently happening, the opposite is happening and forecast to continue.

 

Going to be difficult to see how when 650k are to be added to the 2.47m already unemployed just through the Public sector cuts.

 

The private sector is going to solve all our problems. Duh.

 

[Christmas Tree 4848]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

[NJS 4411]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

 

 

I think the point is "recessions are always followed by growth" is the kind of assumption which is more based on patchy history rather than any sound basis. You also have to consider the lack of bank lending as a huge obstacle to any growth.

 

As we also keep saying the cuts will also lead to private job losses as those companies like EDS which service the public sector cut back.

[Happy Face 29]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

 

 

I think the point is "recessions are always followed by growth" is the kind of assumption which is more based on patchy history rather than any sound basis. You also have to consider the lack of bank lending as a huge obstacle to any growth.

 

As we also keep saying the cuts will also lead to private job losses as those companies like EDS which service the public sector cut back.

 

HP now.

 

But aye....6000 jobs lost in the last 2 years....

 

http://news.crystalumbrella.com/archives/1...hewlett-packard

[Christmas Tree 4848]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

 

 

I think the point is "recessions are always followed by growth" is the kind of assumption which is more based on patchy history rather than any sound basis. You also have to consider the lack of bank lending as a huge obstacle to any growth.

As we also keep saying the cuts will also lead to private job losses as those companies like EDS which service the public sector cut back.

 

Totally agree thats this one point is the biggest make or break for this plan and would also concede that I have heard nothing new on this.

 

For 3 years now politicians, starting with Brown, have banged on about the banks need to start lending yet nothing seems to get done.

 

Dont know how they can persuade them but it needs a fix, now.

[Matt 0]

Everyone knows that a large state crowds out private sector investment. Unless of course that private sector was never there in the first place, in which case it all goes tits up.

 

The Tories are going to have to do something seismic to encourage small businesses. Basel 3 is going to hammer SME lending. The loan markets are free flowing if you're a large corporate, not so for the smaller players.

 

And you can't expect lending to increase when a global standard is coming in that will make lending significantly more expensive. It will pummel non-drawn facilities such as working capital lines which are treated the same as fully drawn loans. You can't force banks to make rash lending decisions- in fact its extremely dangerous. There is supposedly new regulations about 'moral hazard'- forcing to lend gives everyone an excuse if a deal hits the skids- "It's not my fault, the government told me to lend it". Banks cant take more risk and less risk at the same time. Small businesses are inherently risky.

 

The prevailing market is such that a lot of SME lending is pseudo-equity and the government should be looking at this avenue as the best funding route- already some of the larger banks have effectively created a venture capital fund which I think will fill the gap between what banks can afford to lend and what businesses can afford to borrow.

[Park Life 71]

How long are people gonna buy into this shit?

[ChezGiven 0]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

 

Brown was clearly using a different model to Cameron, thats for sure. We did come out of recession in the 80s and 90s but Japan didnt. One therefore doesnt follow the other.

 

The basic answer is 'Not everyone is using the same models'.

 

The enormously boring answer is: There are 2 broad schools, neoclassical (Real Business Cycle Models) favoured by amongst other the godfather of monetarism, Milton Friedman. It argues against any form of fiscal policy (as Matt just mentioned due to crowding out) and in its purest form rejects the role of governments in economic policy. Eyebrows should be raised there.

 

These models all do the same thing, how will firms, household, banks and everyone else react to a change in economic conditions brought about by shocks or policy? The predicted changes in behaviour of individuals, predicts how good or bad the change is for the economy. You need to know where you are today (problematic when data is lagged) and find an equivalent situation in history to give you data to feed your predictions. So in essence they are based on how we all act with the model required to make an assumption about our behaviour. This assumptions is called 'rationality' so everyone acts in exactly the right way to ensure the outcome of his action is the best for him. Sound stupid? It gets better, the classical approach also assumes that a very special thing called an 'economic equilibrium' (everyone is as happy as possible) not only exists but is the norm. The supporters of this model have strongly argued for decades that government spending only has limited positives and should not be used as a tool in the economy.

 

Then there are Neo-Keynesian models that still assume people are rational but that markets are not perfect, failures exist and in particular things like prices and wages are sticky or inflexible in the short-term. This makes much more sense to anyone living in the real world. This school spends much more effort explaining individual behaviour and drives further into the psychology of people's actions (micro-economics) to show that, in contrast to the dominant thought (capitalism in its fairly pure form has really dominated for a while) that managing markets via government intervention was justifiable and a good thing.

 

Now, the next distinction is between models used by banks and markets in practice that are simple to use but stunningly shit and a joke in the profession and new DSGE models. These new models are really complicated to populate with data but are much simpler in structure. The ECB have a Neo-Keynesian DSGE called the Smets-Wouter ( http://www.ecb.int/home/html/researcher_swm.en.html ) but is not been applied to individual countries. Its also been recently shown as a bit outdated (2003) and doesnt work in abnormal recessions (which we have because of the interest rates). In this case the Romer / Bernstein model is a better predictor.

 

http://www.voxeu.org/index.php?q=node/4818

 

So its far from clear everyone is using the same model. The smaller banks and market tend to use the old defunct macro models that are still the most prevalent (even though academia has moved on from their earlier works). Then there are plenty of central banks using either RBC (classical) models, keynesian models, DSGE ones or none of the above. Finally we really dont know whether anyone reading the outputs has the first clue about the subject or is driving an agenda. What we do know that by using data from the Great Depression and running it through the latest predictive model that has been developed specifically to deal with the financial crisis says that spending now will move the economy onto a permanently higher level of GDP. Thats the Eggertsson paper i quoted, the lad from the NY federal reserve.

 

You are right of course, this debate wont be resolved today. However, worth pointing out that retail sales in the UK have slumped in the last 2 months. There's that laggy data again

 

http://www.telegraph.co.uk/finance/economi...n-spending.html

[Park Life 71]

The biggest problem with Capitalism (whatever flavour) is getting money back out into the periphey. it is singularly shit at this as its main drives tend to create monopolies and reduce/fragment the 'money supply'. This is the key thing. It means that within its dogma it carries the seeds of its own destruction (it's already history actually and what we witness now are elaborate schemes to keep it on its last legs). Hence all over Europe over the last 30 years we have witnessed state intervention (our money) holding it together, which ironically is a proxy for socialism (which broadly speaking) in Europe has always been the moral drive (the velvet glove). In the future (near future) the state will realise it itself needs to take more responsability for lending and energising the market and finally the state will become the market (it already is one of the biggest drivers of the market).

Edited October 25, 2010 by Park Life

[Renton 22007]

The economy is already stalling apparently - Beeb. There was discussion on the radio this morning that many experts think we will be back in negative growth by the fourth quarter. And then VAT and the cuts kick in.

[Christmas Tree 4848]

Everyone knows that a large state crowds out private sector investment. Unless of course that private sector was never there in the first place, in which case it all goes tits up.

 

The Tories are going to have to do something seismic to encourage small businesses. Basel 3 is going to hammer SME lending. The loan markets are free flowing if you're a large corporate, not so for the smaller players.

 

And you can't expect lending to increase when a global standard is coming in that will make lending significantly more expensive. It will pummel non-drawn facilities such as working capital lines which are treated the same as fully drawn loans. You can't force banks to make rash lending decisions- in fact its extremely dangerous. There is supposedly new regulations about 'moral hazard'- forcing to lend gives everyone an excuse if a deal hits the skids- "It's not my fault, the government told me to lend it". Banks cant take more risk and less risk at the same time. Small businesses are inherently risky.

 

The prevailing market is such that a lot of SME lending is pseudo-equity and the government should be looking at this avenue as the best funding route- already some of the larger banks have effectively created a venture capital fund which I think will fill the gap between what banks can afford to lend and what businesses can afford to borrow.

 

The annoying thing is though that it wasnt banks lending to small businesses that got us into this mess. It was dodgy mortgage deals, mainly in the US. I think even Northern rocks problems were mainly with their US debt?

 

Banks in this country have always made profits as part of normal business which included lending to risky small businesses.

 

I can understand them pulling back from dodgy self cert mortgages etc but see no problem in small business lending as previously carried out. Seems daft.

[Christmas Tree 4848]

CT those growth forecaste use a different type of model to the ones which i am referring. These models say the impact of government expenditure increases or decreases is not that great, so the underlying trend (which is a predicted u-shape we have just been through the bottom of) will continue and the cuts wont affect economic growth. If your model says that after a recession, the growth curve kicks up, then the predicted data will show that, as these figures do.

 

The reality is that the impact of the cuts will lag behind the data and so wont be picked up by these models for a few months yet.

 

FYI on those who support your view, do remember that there were more and better economists signing up agains the cuts, the FT Economics unit came out against them. The 'markets' dont predict much, there are some bulls and some bears and most of them want to change the yields on their bonds so have a vested interest in reducing the 'risk profile' of govt bonds. The bears in the markets said the same thing about the Irish and have now been proven wrong.

 

The IMF is typically for them calling for conditions which favour the international finance community it is run by and represents. The IMF want favourable market conditions and dont give a fuck about the social ones.

 

I still dont understand your thrust here. The government and their independant advisors have models that predict a rise after a recession. Im sure they take into account lags etc and yet still believe their models to be right.

 

Was it not the norm in the 80's and 90's to come out of recession, followed by private sector growth

 

Are we getting hung up on headline figures of 19% cuts when in truth this is actually 4.9% cut for the first year and so on. It may be the economy does grow as expected or better and the whole thing gets even better.

 

The bottom line however in all of this is that there is more than one train of thought out there and you know fine well that this is an argument that cant be won in advance.

 

Brown was clearly using a different model to Cameron, thats for sure. We did come out of recession in the 80s and 90s but Japan didnt. One therefore doesnt follow the other.

 

The basic answer is 'Not everyone is using the same models'.

 

The enormously boring answer is: There are 2 broad schools, neoclassical (Real Business Cycle Models) favoured by amongst other the godfather of monetarism, Milton Friedman. It argues against any form of fiscal policy (as Matt just mentioned due to crowding out) and in its purest form rejects the role of governments in economic policy. Eyebrows should be raised there.

 

These models all do the same thing, how will firms, household, banks and everyone else react to a change in economic conditions brought about by shocks or policy? The predicted changes in behaviour of individuals, predicts how good or bad the change is for the economy. You need to know where you are today (problematic when data is lagged) and find an equivalent situation in history to give you data to feed your predictions. So in essence they are based on how we all act with the model required to make an assumption about our behaviour. This assumptions is called 'rationality' so everyone acts in exactly the right way to ensure the outcome of his action is the best for him. Sound stupid? It gets better, the classical approach also assumes that a very special thing called an 'economic equilibrium' (everyone is as happy as possible) not only exists but is the norm. The supporters of this model have strongly argued for decades that government spending only has limited positives and should not be used as a tool in the economy.

 

Then there are Neo-Keynesian models that still assume people are rational but that markets are not perfect, failures exist and in particular things like prices and wages are sticky or inflexible in the short-term. This makes much more sense to anyone living in the real world. This school spends much more effort explaining individual behaviour and drives further into the psychology of people's actions (micro-economics) to show that, in contrast to the dominant thought (capitalism in its fairly pure form has really dominated for a while) that managing markets via government intervention was justifiable and a good thing.

 

Now, the next distinction is between models used by banks and markets in practice that are simple to use but stunningly shit and a joke in the profession and new DSGE models. These new models are really complicated to populate with data but are much simpler in structure. The ECB have a Neo-Keynesian DSGE called the Smets-Wouter ( http://www.ecb.int/home/html/researcher_swm.en.html ) but is not been applied to individual countries. Its also been recently shown as a bit outdated (2003) and doesnt work in abnormal recessions (which we have because of the interest rates). In this case the Romer / Bernstein model is a better predictor.

 

http://www.voxeu.org/index.php?q=node/4818

 

So its far from clear everyone is using the same model. The smaller banks and market tend to use the old defunct macro models that are still the most prevalent (even though academia has moved on from their earlier works). Then there are plenty of central banks using either RBC (classical) models, keynesian models, DSGE ones or none of the above. Finally we really dont know whether anyone reading the outputs has the first clue about the subject or is driving an agenda. What we do know that by using data from the Great Depression and running it through the latest predictive model that has been developed specifically to deal with the financial crisis says that spending now will move the economy onto a permanently higher level of GDP. Thats the Eggertsson paper i quoted, the lad from the NY federal reserve.

 

You are right of course, this debate wont be resolved today. However, worth pointing out that retail sales in the UK have slumped in the last 2 months. There's that laggy data again http://www.telegraph.co.uk/finance/economi...n-spending.html

 

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

[NJS 4411]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

Xmas possibly - new year with 20% VAT no chance.

[Renton 22007]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

An absolutely bizarre belief imo, and based on what, exactly? You seem to think that a 5% annual cut on services for 5 consecutive years is insignificant and will breed confidence. Unlikely imo, I think we will officially be in a double dip by spring.

[Christmas Tree 4848]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

Xmas possibly - new year with 20% VAT no chance.

 

 

Sounds bad when you say it like that but as with all taxes they soon become the norm.

 

First of all, most shops will try and boost / keep the sales going with offers like "we'll pay the vat increase" etc.

 

Secondly, an extra 2.5% on the cost of say a new Smartphone is not going to put someone off buying it.

 

If you are going to spend £450 on a new product, suddenly having to pay an extra £11.25p will not be a dealbreaker imo.

[Christmas Tree 4848]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

An absolutely bizarre belief imo, and based on what, exactly? You seem to think that a 5% annual cut on services for 5 consecutive years is insignificant and will breed confidence. Unlikely imo, I think we will officially be in a double dip by spring.

 

The uncertainty of the summer spending review has gone.

 

Just as business has reacted positively to the unknown being known, the same applies to most people.

 

Not saying the Gardens all rosy for everyone but I think the coalition has played a political blinder by letting this be built upto be an expected massacare of spending cuts since they came to power and then when a lot of people see what has actually happened and got their head round it, it seems a lot less than they were expecting.

 

(I appreciate that there will be a lot of public sector workers still worried about futures)

 

It would be interesting to know from anyone in the public sector how the actual fall out has transpired since the cuts were announced. For example your own NICE seemed to be in doubt at one point but looks to have been sparred?

 

No cuts in the NHS and Education leaves another band of people who will be feeling more secure after the announcement i would have thought.

[Renton 22007]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

Xmas possibly - new year with 20% VAT no chance.

 

 

Sounds bad when you say it like that but as with all taxes they soon become the norm.

 

First of all, most shops will try and boost / keep the sales going with offers like "we'll pay the vat increase" etc.

 

Secondly, an extra 2.5% on the cost of say a new Smartphone is not going to put someone off buying it.

 

If you are going to spend £450 on a new product, suddenly having to pay an extra £11.25p will not be a dealbreaker imo.

 

Well again CT, some experts were saying on the radio this morning that it will put people off buying things to the extent that the VAT increase will actually not increase tax revenue for the treasury at all. You need to look at a population level behaviour of consumerism rather than just your own individual purchases. Of course, VAT is charged on plenty of essentials too, and people may be enticed to spend before the New Year, so who knows? What I do know is that in addition to this most people have been on pay freezes for months or years and there is a lot of job uncertainty, hardly factors that inspire consumer confidence.

[Renton 22007]

Personally I think that was on the cards until the spending reveiw was announced and is also why I think we'll see a pre christmas and new year surge now.

 

An absolutely bizarre belief imo, and based on what, exactly? You seem to think that a 5% annual cut on services for 5 consecutive years is insignificant and will breed confidence. Unlikely imo, I think we will officially be in a double dip by spring.

 

The uncertainty of the summer spending review has gone.

 

Just as business has reacted positively to the unknown being known, the same applies to most people.

 

Not saying the Gardens all rosy for everyone but I think the coalition has played a political blinder by letting this be built upto be an expected massacare of spending cuts since they came to power and then when a lot of people see what has actually happened and got their head round it, it seems a lot less than they were expecting.

 

(I appreciate that there will be a lot of public sector workers still worried about futures)

 

It would be interesting to know from anyone in the public sector how the actual fall out has transpired since the cuts were announced. For example your own NICE seemed to be in doubt at one point but looks to have been sparred?

 

No cuts in the NHS and Education leaves another band of people who will be feeling more secure after the announcement i would have thought.

 

The NHS is facing de facto cuts though - and so it should btw, not being party political here. It needs to expand by 5% a year to keep level, but the increases to it are neglible to the extent that there will 20 billion of cuts. Same with education. You must have seen on the news how they are expecting thousands of front line redundancies? As you know what I'm more concerned about are the reforms but lets not go there again.

 

Councils have been absolutely hammered though, that is going to have a massive effect in the North East. The uncertainty of the review might be over, now the reality of the cuts will bite.