Why the headlines won't help Brown

Nicholas

Crowing is what we will get. That is the only word for it. For a party that set about destroying any hints of triumphalism in Britain's glorious history they do a very good line in it themselves.

Man in a Shed

I note that the two institutions doing the talking up were the Royal Institute of Chartered Surveyors ( who usually predict a rising property market - even just before the crash - I wonder why ? ) and the *government funded* National Institute for Economic and Social Research.

Spot the conflicts of interest.

Rhoda Klapp

There was a feature of this recession that has not been accounted for here. Industry, such as it is, reacted quickly to the downturn. Honda in Swindon and Mini in Oxford stopped making cars. for instance. Not becuase they had no orders, but because they anticipated that position. Honda had unsold inventory, but mini have always built to order, no stock problem there. Anyhow, they stopped making cars. Probably they used the downtime to fix things in the factory, or introduce model changes. Now they are back to making cars. So the figues are going up. They are still NOT high numbers, and they don't represent much of a recovery. There is nothing to be made of this. It's very like 'reversion to the mean'. It does not justify puff pieces on BBC news.
I think we still haven't heard the second shoe drop. Perhaps it's a one-legged man.

Publius

All we're doing is pumping up yet another asset bubble. It's like an alcoholic taking another drink in order to forget his problems. The underlying problems have yet to be dealt with.

As for Brown and Labour, they were unpopular before the crisis hit.

Malcolm

The Business section of yesterday's DT was full of it, but there's no getting away from the tsunami of debt that is about to engulf us, thanks to McBust's wrecking of our economy. This is the lull before the storm. His scorched earth policy is working very nicely, thank you.

Andy Pandy

I agree that there will be very little in it for Brown or Labour.

First, if indeed the outlook is improving, then it will be viewed by many that there is less risk to trying someone new. Also, the people who are now perhaps beginning to benefit from any green shoots will be natural tories - those who actually choose to take some control and influence over their economic wellbeing and are not looking to government to bail them out. Labour's natural constituency - public employees and benefit dependents will know that for them the chill wind will be blowing for some time yet. And of course as stated, the unemployment trend will lag at least 9 months.

Finally even among the great economic illiteratti (ie British voters), there will be a sense that a few green shoots does not mean recovery.

Josh

Wait until interest rates go back up. This pain of this recession has been negated by obscenely low interest rates. They can't stay there forever, and if the BoE sees any sign of inflationary pressure, they will put those rates back up, and crush millions of mortgage holders with it. When interest rates go up, Brown's poll ratings will go further down.

Steve.W

According to Drax power station electricity consumption is 8% down. Does this mean all those illegal immigrants are working in the dark doing jobs that would otherwise be done by British workers in the light?

Huge numbers of small businesses are still going bust, recovery, what recovery?

Thomas Aquinas

what's all this 'recovery' guff based on then?

0.4% rise in maunufacturing output in June and some survey of the service sector. First, because UK's Manu. sector is so wizened, at barely one-tenth of overall GDP(less than half of what it is in Germany for example) any slight movement in output is magnified. The rise in this case was almost wholly down to one or two foreign-owned car factories starting back up or gearing up for artificially-boosted car demand by taxpayer-funded scrappage schemes, Honda and Nissan respectively. Add in Indian-owned Jaguar Land Rover producing usual dealer launch stocks for the new XJ and 2010 MY Range Rovers and this surprise rise in UK manufacturing is explained.

As to the service sector, again a lot of supposed increased activity is attached to the artificial stimulus of the car scrappage scheme in car dealer and associated activity like insurance, plus of course London's upper-end housing market being stimulated by billions of pounds of banking bonuses funded by the small matter of one and half trillion printed pounds, whose debt and interest falls to the UK taxpayer. Some 'recovery'.

The surprise, substantial rise in retail sales in UK last month is also false. First, again, I would expect ONS statisticians are wilfully including car sales in retail data and are supressing the true price inflation rate to flatter sales volumes. How can ONS say sales volumes rose due to price deflation when the largest component of retail sales, food, is rising in price at at least 5% p.a.? Absolute deceitful nonsense.

The UK is not a nation. It is a facility for bankers and swindlers, or one and the same.

America, strangely, is showing up the deceit of UK authorities. Due to larger scale - less scope for fiddling and covering things up - the exact same reflation policies by money printing in the US by the Treasury and the Fed is not giving the stats to support the 'recovery' lie, as in UK. America, like UK, having taken about two times GDP from its taxpayers and given it to the bankers is still showing job losses, declining consumer demand, mortgage foreclosures and declining house prices. UK is in same situation and has same outcome, no real recovery, except for the bankers. Is stunning what the Media can do, to tell people what is happening to them.

oldrightie

Unemployment is still soaring, job centres are unable to cope. Food price inflation running at 3.8%, taxes about to jump, (NI increase on every penny earnt, VAT to rise) and the money printing will hit badly inflation in the next 12 months. That latter item will push interest rates back to the 8% level. This reckless Government is a shambolic disaster for everybody.

Johnathan Pearce

The problems of massive debt have not gone away and we should remember that the parlous state of the UK public finances existed long before the credit crunch really got going. The Tories, if they are sensible, must keep making this point, but to do so effectively, means continuing to show some courage in saying they will cut public spending sharply. It also means resisting such nonsense as the 50% top tax rate, which will reduce revenues, not raise them.

Mark M

If we go W-shaped there's no way back for Brown. He can't afford for us to slump again. There's no left in the kitty. My money is on 'worse than forecast' data again next quarter. Everything the government has done has made the recession worse, hence the 0.8% slump last quarter - compared to forecasts of 0.3%.

The Bellman

The collapse has been arrested by racking up government debt. There's been no attempt to address the structural problems in the UK economy, nor any credible plan to reassure creditors that we will be able to cover our liabilities. The 'recovery' is media-led wishful thinking and bad news fatigue, encouraged by dissembling, suspect financial practices, dodgy statistics and the same kind of failure to confront unpleasant truths that got us here in the first place.

See The Onion's headline of a few months ago - 'Nation ready to be lied to about economy again':

"I thought I wanted a new era of transparency and accountability, but honestly, I just can't handle it," Ohio resident Nathan Pletcher said. "From now on, just tell me the bullshit I want to hear."

An overwhelming majority of citizens said they believe that, during these extremely uncertain times, our leaders have a responsibility to come together, sit the American people down, and lie through their teeth about everything from misappropriations of taxpayer dollars to the severity of the crisis.
"I don't need to be constantly reminded that the lack of regulations on Wall Street compounded with failing institutions like AIG basically plunged the world economy into a global recession," said 32-year-old office manager Alexis Harrington. "What I want is for someone to tell me with a straight face that the GDP is through the roof so that I can feel better and instantly forget what all these terms even mean."

"For the first time in my life I know who the secretary of the treasury is," Harrington continued. "And I don't like it."

http://www.theonion.com/content/news/nation_ready_to_be_lied_to_about

James J

The property market, like any other, is subject to supply and demand and our population keeps increasing so…

eugene

Now what good economic news was this?

A big loss for Northern Rock and LLoyds Bank? An unexpected contraction in US manufacturing (we always follow) indicationg a double dip recession?..far too early to say the economy is turning....and when it does, it will be no thanks to Labour.

Andrew

The problem with our current "recovery" is, that like the cause of the crash before it, it is based on bringing forward spending and increasing the amount of debt in the system. Unfortunately there is no one (beyond the IMF) that can give us money when we run out again.

If the figures from America are to be believed, there are at least 3 medium sized banks that are on the brink of going down which is likely to trigger another wave of financial chaos across the world. (I recommend reading the market ticker blog to get an understanding of what's going on across the pond)

At that point any green shoots now become moot and we slide into the second part of our w!

Victor Southern

It has occurred to me that the tiny rise in house prices may be due simply to the fact that few lower paid workers can get into the market. That should indicate that relatively more high ticket houses are being sold than their normal ratio to smaller residences.

For the moment I would discount this statistic.

Englishman Abroad

Even among those who have no interest in, or understanding of, economics, there must remain on simple question:
if the Dear Leader was able, through his own brilliance, to get us out of this mess by "taking action", presumably it must have been some of his earlier "action" that got us into the mess - a bit like steering!
In Ireland, the governing party felt extraordinarily hard done by in the recent local elections, because they thought they were handling it all pretty well. The voters took a different view: who was driving when we crashed?

Simon

A ministry is remebered for dropping the electorate in it, not for its recovery. Ask Ken Clarke. Recall Gordon Brown's remark on entering the Treasury about thank-you notes.

Paul Pinfield

The reason that the Labour party will lose the next GE is down to Brown. The electorate now know him and they don't like him. Simple as that. He will take the party down with him because he cannot accept that he is the problem. He is wrong...

Publius

Judging from today's announcement on QE from the BoE, the Bank doesn't share in the shallow optimism.

JONNY

Losing the GE by a landslide is not so bad for Brown.
He'll be in the best of company.
Viz: his hero Churchill in 1945 whom history has vindicated and now almost deified.
No the worst thing for Brown would be to be pushed down the backstairs and humiliated before the GE as a certain vote loser.
That would not look so good in the history books.
That's why he will hang on till the end.

TrevorsDen

Intuitively I think the 'recovery' is being overdone. However bearing in mind the recession started a quarter earlier than previously thought and we had a slowdown before that - then a recovery of sorts is due roundabout now.

The debt burden over us all is surely inevitably going to be a drag on recovery.

john miller

I'm obviously missing the point about the house price increases.

Generally, the doctor finds it difficult and depressing to tell the patient that the old disease has reared its ugly head again.

seb

"The recovery, which comes from America..." [I nicked this from another site. Cheers.]

Of course, given the mess the country's in, no one but a lunatic would describe a few better-than-usual headlines as a nascent recovery. Where is Brown? The nations needs cheering up. Can't he take a break from helping OAPs cross the road to do some absurdist grandstanding about "the recovery, which started in Downing Street"?

Boudicca

As soon as the recovery starts to gain pace, inflation is going to hit big time because of all the quantatitive easing the BoE has carried out.

The BoE will then have to start trying to curb inflation by raising interest rates, which will slow down or stifle any recovery.

We have billions of debt to pay off, which will mean increased taxes and the basic flaws which created the banking crisis/recession in the first place haven't been resolved.

The British electorate may have been fooled by Blair and Brown's double-act, but like most double-acts, when the funny man goes, the straight man can't carry on on his own.

There may be the early signs of a recovery, but we all know there is a long way to go before UK PLC is back on its feet. I really don't think the British electorate is quite daft enough to be fooled by Brown - green shoots or no.

2trueblue

A little bit of sun, a lot of rain, green shoots. A lot less sun, lots of rain, cooler times and fading shoots. Thats how my garden grows. Not a lot different to what we see elsewhere....
It takes a lot more than luck and turning on the tap to make things grow. Know how, careful management, thats the real trick and a good sound foundation. Gordon was given the foundation, dhame he could not come up with the rest.