That graph speaks volumes Alice!
In the US, consumer spending accounts for 70%. What % is UK consumer of GDP?If it is on par with US than this chart highlights any recovery is going to be tepid at best, and a diaster at worst, which is exactly the problem facing the US.
What is your source please ? I cannot read the logo on the top left.
source: ftalphaville, but the original data is almost certainly ONSAlice
This graph represents the problem with the economy, it also illustrates why a credit bust is such a devilish thing to deal with.And why attempts by the government to get the housing ATM working again will fail.People are now trying to reduce their indebtedness.It also represents how much demand has been pulled from future production into the past. That is it indicates how much production is no longer required.
What is amazing is how much the UK has not been affected by the downturn. In the US property is bust and people have stopped buying, but in the UK the housing market is still going and the bars and restaurants are humming. Why?
Because interest rates are so low, the borrowers can still fund the debt.
Anon2: "Why?"We are about 18 months behind the US.
By '97 we were just out of the bump-along the bottom of the early nineties recession, which is the flat 89-97.I expect that soon after the BoE were told to manipulate interest rates to an artificially low target (CP! 2%), artificially low because it excluded housing (an 'independent' BofE told to do the wrong thing by government!).That meant cheap credit and too much of it, a housing bubble and too much use of 'leverage' all over the place - in other words, a UKBubble.B. in C.
I think the UK is visibly affected personally. Shops are closed and not opening back up in London.
I live in London and haven't seen any impact of the recession at all: no slowdown in buying, whoring or eating and drinking. That's London!On the debt issue, I can only come to one conclusion: the British really are a population of lying scumbags. What other conclusion can you come to?
in the UK the housing market is still going and the bars and restaurants are humming. Why?The "Cash In Hand" economy is going even better with rising unemployment?
London may not seem different if the subtle changes happen gradually. Having spent a couple of hours on Oxford St - I really felt that the conversion of the old Virgin Megastore into an arcade flea market characterised a change in progress.The other thought to bear in mind is that the debt to GDP ratio kept rising in the early 1930's. Not because of debt rising - it wasn't! The problem was a falling GDP and rising unemployment.Suddenly I feel a need to go and ensure my glass is half full!
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