Our country is crying out for Leadership!!!!!
Posted on July 8th, 2009 in economics | 2 Comments »
We all dream about those green shoots of economic recovery. The news that our economy is starting to pick up.
The feel remains that we are on the edge of the cliff, desperately overhanging the edge and waiting to freefall. But what is this Government doing about the economy? Apart from propping up the banks, printing money and bolstering the public sector, the government seems in limbo. Gordon and team have been more focused on reform of the political system than helping the UK.
No doubt at PMQ’s we will hear arrogant Gordon attacking the Tories….but Gordon…you are in power. These are dangerous times. Livelihoods depend on what the Government does…and that lack of confidence in this Government and their policies is feeding through into the real economy.
But take a look at the true statistics of where we are by the National Statistics Office…..which tell us…..quite simply, unemployment is way on the rise, job vacancies continue to fall, unemployment benefit claimants are rising, GDP is falling, public debt as a % of GDP is rising, productivity is falling, manufacturing is declining, we are buying more imports……hardly green shoots to be proud of yet.
And yet Gordon tells us that the Government’s great work is being undermined by rising oil prices, (which will feed through into inflation figures and send that statistic heading the wrong way and if that happens for a sustainable time period then interest rates will move as that is the Bank of England’s main objective. anyway, take a look at the stats yourselves…..
Each day the Government points at new figures saying we are on the way back up. each day we hear from respected think tanks and economists that we are not doing enough and things are still bad. Yesterday we heard that estimates of GDP suggest output fell by 0.4% in the three months ending in June, according to the National Institute of Economic and Social Research. Output had declined by 1.3% in the three months ending in May and actually grew by 0.6% in June, the NIESR said. ”However, on the basis of the monthly profile we estimate that the UK economy is now stagnating rather than continuing to contract at a sharp pace. “In the three months to June 2009 the UK economy was around 5½% below its peak in March 2008.”
In the housing market we get some positive news. House prices dropped by only 1.9% during the three months to the end of June. That is the smallest quarterly fall since the beginning of 2008, and well down on declines of between 5% and 6% during the three final quarters of 2008. Annually, house prices have now dropped 15%.
Thanks to all those who emailed me about an article in today’s Wall Street Journal. This is significant because many American investors read and trust the WSJ’s judgement and based on their latest words, what American would invest in the UK? Take a look here: http://tinyurl.com/qogwvt
Most interesting paragraphs: ‘ Six months after the U.K. government scrambled to launch new bailout measures for Britain’s foundering banks and economy, several of those efforts are languishing with few takers. In January, for example, the British government created a guarantee program meant to revive the dormant market for asset-backed securities. The program aims to spur purchases of banks’ asset-back securities, or bundled consumer loans, by guaranteeing them for buyers. The guarantees were made available in April, but since then, none of the major U.K. banks has issued a security with such a guarantee. Bankers say it is too expensive; the government says the program is under review. So far, no changes to its terms have been made, and the program is set to expire in October. The flop is among several misfires by the U.K. government in recent months among programs that haven’t drawn interest from the banks and businesses they were intended to help. An effort to give firms trade insurance, for example, has seen only limited participation. The same is true of a loan guarantee for small businesses, which has been disregarded because it requires owners to put their own collateral on the line. The snubbed bailout programs are a testament to the difficult balancing act governments face when attempting to aid their financial sectors and economies: They don’t want to give banks and businesses a free ride, but fail to accomplish anything if their terms are not attractive enough’.
Sad times when our Government have no answers and no action to help our economy. Out of ideas….soon out of office….
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[...] Most interesting paragraphs: ‘ Six months after the U.K. government scrambled to launch new bailout measures for Britain’s foundering banks and economy, several of those efforts are languishing with few takers. In January, for example, …Continue [...]
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