Top economist: UK will enter recession this year

Silent Hunter

Quelle surprise!

Steve Garner

This cannot possibly be true. The Supreme Leader has assured us that the economy is growing well and that despite the problems it is better placed than other economies to withstand these problems.

How dare you doubt the Supreme Leader's wisdom.

Craig Strachan

Typical economist - forecasts a recession once it's already started.

Chuck Unsworth

Yes, well, a truly clever and gifted economist would be able to predict when the upturn is likely to happen...

Tina

Three economists on channel 4 news last night said they were all going with their 'worst case scenario's' in terms of the economy and housing market. It's looking grim.

Marian C

'Michael Saunders from Citibank,has day revised forecasts...'

What; they've only just noticed! Who the hell employs these people!

Jennie

Anyone would think that there had not been a recession before within living memory. And most economists say that, unpleasant though things will get, they won't be as bad as either of the recessions of the early 80s or early 90s.

david barker

This is GB's miracle economy with no boom and bust. We surely can not have a recession? We are so well placed with our strong reliance on house price inflation and financial services.

oldtimer

One very significant implication of this forecast is the effect it would have on the public finances - for it is well below the Treasury growth forecast quoted in Mr Darling`s last budget.

The question then becomes not so much how to "share the proceeds of growth" as how to "share the consequences of pain".

The private sector and families are bearing the brunt of the pain right now in the form of real cash cutbacks in revenues/pay earned and reduced disposable income.

When and how will government face up to the need for real cash cuts in its spending? My guess, based on past experience, is never. Government spending only ever ratchets upwards without a reverse mechanism. This issue will grow and grow.

It is driving Brown/Darling into ever more politically damaging attempts to raise taxes be it the 10p fiasco, higher VED rates and the myriad other devices to extract more from the taxpayer.

One of the more bizarre examples was given in the Cabinet Office paper "Food Matters", the one which prompted Mr Brown`s ill timed remarks about how much food we wasted. According to reports the paper also said:
"Agriculture accounts for as much as 12 per cent of all greenhouse gas emissions, and gases from farms like methane and nitrous oxide could be brought into emissions trading systems." In short the idea is to tax cattle flatulence. How long, I wonder, before the LSE will lead the world with its innovative FFX (Fart Forward Exchange) to set along side its carbon trading?

Short the UK

Most of these economists are hopeless. It is best to follow the money: Jim Rogers, George Soros, Michael Steinhardt, Ken Murray.

I think we are going to enter a deflationary slump in which nearly all assets will fall in value. Northern Rock offer 7% for a fixed bond. It is now all about capital preservation. Many, many, people are going to get skinned alive.

CCTV

City Economists are there to support Equity and Bond Sales. University Economists are only consultants and not employees.

The fashion of following City Economists has led the economy astray as they are little more than writers of Marketing Newsletters

Dumb Engineer

Can anyone out there tell me if now is a good time to buy an annuity or at least better now than latter?

Max Kaye

An economist is someone who uses hindsight to explain why his past predictions were wrong.

Anyone employing one should demand a money-back guarantee on services provided, or else - as in EU legislation regarding clairvoyants - accept that economic forecasting is a form of 'entertainment'.

Ann

Oh, really? A recession? Well, I never! No, he cannot be serious!

What a prat. He must be one of those who could not see the housing market crashing even six months ago, when I have been predicting it for 18 months at least.

david hill

Re: Britain’s Financial Woes are just beginning

Britain is in for the worst economic hammering it has witnessed since the end of WW2.
In this respect there are now major pointers emerging, which should send shivers down the spines of the British electorate.
Indeed recently, the Bank for International Supplement, the organisation that fosters cooperation between central banks, has warned that the credit crisis could push world economies into a crash on a scale not seen since the Great Depression.
As an example of what the central banks are saying also, the reserve bank of India stated just 6-days ago that to address the world’s financial crisis, central bank interventions have been staggering and on a level not witnessed since the Great Depression. But will the central bank support be enough is the critical and worrying question. Indeed recently again in this respect, the International Monetary Fund (IMF) stated also that the world is witnessing the greatest shock to global finances since the 1930s. Further, central banks led by the US Federal Reserve, have already piled help and credit on the financial system over the past 12-months, as they did again only this week, to nurse it through this pending economic disaster. Therefore this need will certainly arise continuously to weather the storm, if we can, as the pointers are looking very bleak indeed. Now unfortunately adding to this, the problems are spreading with evidence that started as a financial-sector crisis is just starting into a business crisis. Indeed with no finance, business will find it hard to survive and with the size of HBOS's recent failure to raise funds together with the price of underwriting an issue, it will be impossible for others to do likewise from now on. Therefore our banks will have major liquidity problems and failures for many years to come. Indeed, they will probably not stabilise again for at least a decade. For as Capitol Economics stated recently, we should be preparing for recession, it's more likely than not. In this respect consumers are going to get hit where it hurts by a mixture of the housing market downturn and inflation they stated. People will see growth falling from 2 per cent in 2008 to flat (zero) next year and added to this, companies will see their profits fall dramatically. Consequently one can predict that firms, due to the lack of financial stability and ‘inadequate liquidity’ of our banks, will not be able to borrow. As the financial crisis becomes a firm business crisis Capitol Economics predict unemployment will increase from 1.6 million people to 2.5 million and while falling house prices do not hit pockets, lost jobs do they say. Therefore the effects of this present financial crunch will last for years for businesses and where others will not even survive to see the recovery at all.
All this shows that financial regulators throughout the world are not robust enough and have not enough power to curb the excesses of the financial world. Governments therefore, when this is all over, should make sure this time, that the full market philosophy is kept firmly in check. If not, what we are experiencing now will happen time and time again. The ‘free’ market has got to change therefore and where the public (consumers) always learn the hard way, for they are the ones the banks really hurt and of course the ones who have to ultimately pay.
Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland
3rd August 2008
UK Postal Address: PO Box A60, Huddersfield, HD1 1XJ
UK Contact No: 01484 537181

Karma

Oh well-it`s only money! Start Growing Your Own and get some Chooks, pay off what you can and invest in Thermals and be nice! Learn to like Stew and Veg and cook your own. Stop wasting money on things you don`t need! There is a diffence between need and want! Tomorrow may never come and if it does, there is always tomorrow, same crap, different day. At least we all end up dead at some point, so don`t don`t worry! What you haven`t got they can`t have, you may have to burn it to keep warm and cook on! Have fun in this Brave New World! Like you didn`t see he signs and learn form History?