Monday, 21 January 2013

UK economy looks a bit sick

Markets are starting to look at the UK economy and the don't like what they see. This was only a matter of time. The UK has already had a double dip recession and is heading for a third dip. Bootle in his regular Monday DT business column says he expects negative growth for 2012 to be confirmed when the Q4 2012 GDP figures are published soon.

Because of my wife's small French house I keep a close watch on the Sterling Euro rate. Its been falling recently from 1.25 to 1.19 in little more than a month. Conventionally one would say this is good for UK manufacturing industy exports to the Eurozone but given the huge collapse of demand in that area there is little export increase to be had. The main effect of our currency devaluation will be to increase the UK rate of inflation. This will create yet more problems for Dave & George.

What can they do to improve things? They have to bite the bullet and make real significant cuts in public spending . I suggest they abolish the Overseas Development Authority and save £12 bn for starters and then cut benefits for our East European immigrants.

Its time for tough decisions that our politicians boast of taking but seldom do.


Mike Bridgeman said...

I agree with your sentiments.
What is needed it a change in attitude away from the nanny state.
Over the past 6 weeks I have been doing a milk round helping out until the real man has an operation.
Every customer had their delivery through the floods of Christmas and the recent snows (5"-6" here).
Yet last Friday the school closed and the bins did not get emptied. There seems little "can do" attitude with trains delayed and airports at a stand still or almost so and roads left in a perilous condition. There is an argument for increasing spending to enable the infrastructures to perform but also a need for all of us to perform. I feel sure the working time directive does little to help.

Eric Edmond said...


I agree. Most of my working life I was a University lecturer and I cannot recall ever cancelling a lecture for sickness or transport problems. Even at the BoE when the trains went on strike I used to walk/bus in from Roehampton.

I do think the UK economy is in a big mess, too many benefit claimants not enough tax/workers.

As for the LibDems messing around with the Act of Settlement it just shows how little real work our MPs have to do. I would half their number for a start. Reduce the Cabinet to 10 to 12 and give the current Cabinet Sec the sack.

Also get rid of 90% of the useless Lords and have an elected upper house like the US Senate with 2 Senators/Lords per county. That would result in an upper house around 100.