Luan Pra bang

It would seem that inflation is still high at over 3%, wages are stalling, the jobless total goes up and the papers announce companies going into administration every day. It would seem that there is no way out short of a large increase in manufacturing and export.
The trouble is we let this happen, the country was happy to let Labour spend ridiculous sums on welfare, we let water gas and electricity get privatised then sold to foreign companies, we let Europe eat up our money without asking why and we let small business suffer because the large corporations where a bit cheaper. At every turn the people of the UK have abandoned low volume and British made and supported mass produced tat that puts money into foreign hands. The money we spend directly effects our well being, a genuine commitment to family owned shops, British goods and keeping it local would have made a huge difference but instead we still chase the cheapest price and the least effort. Now the reward for this is the Chinese on standby waiting for Europe to crash so they can jump in and buy up bargain utilities. I was told today that China owns 12.5 percent of Anglian water and is looking to increase this as much as posssible. Soon our gas electric and water will be outside our control. See how drinkable our water becimes then ?

Jimbob

iTrader: (13)

In Germany the workforce accepted lower wages in a bid to stop job losses, can you imagine that floated here, oh wait they did and everyone went out on strike. Can`t have wages the same during a recession as during the good years, because it makes the companies unprofitable, and no profits means no company.

Also don`t forget the reason we are in this position is now due to the Euro and the European project Where initially it was the banks, this was sorted by bail outs. BUT where as in the past governments could devalue their currencies to get themselves out of the doo-doo. But France and Germany will not admit defeat, and kill off the Euro, it is this that is threatening us. Just think if Labour had got its way and we`d be in the Euro, then it would be 10 times worse than it is now, so count your blessings. And the fact we can devalue our currency means we`re more able to react.

We need to bite the bullet and take the medicine now, as we can whine and moan and leave it as it is, then end up in a worse position.

So imho it`s only a matter of time before the Euro crashes, as they are making second class citizens in their own countries with Greece, Portugal, Spain and now Italy going down the swanny. All for the vanity of France and Germany.

Wurzel

iTrader: (1)

I really do not understand what you are all moaning about. Why is the UK in such dire straits ? I live in Germany and get paid in Euros and have not noticed one iota of difference all the way through this so called crisis. The only real life expense that has gone up is petrol and that goes up anyway regardless of the euro crisis. I still get paid the same, infact just had a payrise. shop prices are the same. I can get a bank loan as and when I need it. Nothing has changed. but all I hear from the UK is the euro is to blame for your problems. Apart from petrol prices the only thing that has gone up is me buying stuff from the UK.

Your greedy government is to blame for your problems not Germany.

David Lock

My view is that we spend too much money on the welfare system and far too much on defence including wasting huge amounts sticking our noses into unwinnable wars. Can't we accept that we don't have an empire anymore, times have changed, and where does sitting at the "top table" get us?

We should use our cash where it supports things we are good at, like medical research where we excel (even financial services) rather than cut funds in these areas. And stay close to Europe as a trading partner only.

And try and teach our kids properly although that is a mammoth task

dl

SiPie

Spot on dl

f1_fan

iTrader: (9)

Er... amongst his many failings Brown deliberately kept us out of the Euro

Think right now we should spend less time dwelling on the past and more time looking at Messrs Cameron and Osborne who despite being warned repeatedly that no growth is not an option for a way out of recession regardless of how good the austerity measures are and now having the country's AAA credit status put on alert for that very same reason still seem unable to grasp the concept that they cannot tax their way out of trouble!

jonc

It's ironic that you say this on a Subaru site. I don't think you can blame the UK people for wanting cheaper and, as often the case, better quality imported products.

The UK had a massive automotive industry which have all now disappeared bar a few niche low volume specialists, and lets not even bring up the MG Rover's Pheonix four. UK is where it is today because we became uncompetitive and made poor quality mass produced expensive products. The UK's manufacturing were too slow to adapt to increasingly competitive market and some of the downfall for UK's manufacturing can be laid at the foot of the militant unions at that time. The same can be applied to the steel and coal industry. When these industry went, so did all the small business that supplied parts and services in these sectors.

jonc

But neither could we just spend our way out of trouble, which was what Labour were planning to do.

Luan Pra bang

I dispute the idea of better quality though, with regard to cars perhaps you have a point but the running costs of German cars are pure comedy and having had both a Disco and a Land Cruiser from new in our family I can promise you that the Landcruiser has been back for just as many warranty claims as the Disco did but no English person would believe it. In terms of food and clothes though The best suits, the best shoes and some of the finest beef are British yet we refuse to buy them and favour cheap foreign crap. Right now Jaguar make MUCH better executive cars than the Germans IMO especially since the drop in quality after the Germans moved to Polish Manufacture. We seem to have real probelms as a nation of not suporting the things we do well. The fact is if we buy Nissans from Sunderland or Jags from coventry we support British workers, if we buy British made Hi-fi like B+W or Cambridge audio then we support British workers but too many poeple buy cheaper inferior products that have only negative impacts for our own economy and social concience. If people want to improve the state of our economy buy British otherwise don't compain when China buys all of our utilities and we get screwed over.

f1_fan

iTrader: (9)

And what did I say about dwelling on the past.

No what we needed was less stringent cuts over a longer period of time to give the economy the chance to grow. Right now it is stifled to the point of stagnation or worse than that contraction. Said at the time this is what would happen. It doesn't take a genius to work out what happens when either of the major parties gets to regain power in the UK

kingofturds

iTrader: (1)

Seriously too much on defence? we spend nearly two thirds of the defence budget on housing benefit paying people to sit around doing jack all.

EddScott

I've hard someone who has been on the career sick since the 90s and the last time this subject came up I was hit with the classic "I earn more than you two put together" The other person being the wife. "Earn" !!??

Another problem in the UK is where the money was spent in the last 15 years. Do something tomorrow - go look at your local council offices then go look at one of the local secondary school. I'll put money on the council offices being state of the art fortresses and the local school look like Hurricane Catrina just visited.

Out of control spending, spending in the wrong place! We call Greece for squandering EU money, we just squandered our own!

I suspect inflation is going to drop off a cliff by the end of this year and we'll all be living in fear of deflation in 2013.

jonc

I empathise with what you are saying on the whole. Supermarkets generally offer nothing but British produce and that is good for British farmers. But they are squeezed so much by these supermarket chains that the farmers often don't make much at all and end up out of business. It's all very well that we make good premium products, but these are often low volume and priced to match that only a few can afford. In this tough economic climate that exists now, the majority can only afford cheap products. Fortunately cheap doesn't necessarily mean tat either, unfortunately these products are usually imported products from manufacturers that can leverage lower operating costs in other countries. It's a catch 22 situation, we won't buy British if we can't produce cheaply, and we can't produce cheaply if we can't make them on a mass scale.

hux309

Id think we'd all like to get screwed at some point.

njkmrs

Why cant you all just be happy like me !!!!!

I do agree far too much is spent on Welfare Handouts though .

Terminator X

iTrader: (7)

Why is deflation bad?

TX.

jh1-2009

We need to cut foreign aid to places like India who,s economy is booming but their government would rather invest in mega bucks space programs than help their own people

Gear Head

iTrader: (2)

Is that a serious question?

Social class mobility is what drives the economy. Something to aim for. Why put effort into anything if your life will stay the same of get worse?
If house prices for example fall significantly, no one goes anywhere. The country comes to a halt and social unrest rears its ugly head.

I think that in the last few years, people have realised that to get anywhere in life these days, even with a well paid job, you need to be extremely clever with the money you that you earn. No more new cars every 3 years to impress the Jones's and no more £5000 holidays on the credit card. This has led to the economy stalling or growing very little. The average consumers mindset is vastly different to what it was 5 years ago. So spending habits are very, very different, on luxury goods at least.

I work in the marine and industrial supply market and I have never been so busy. Less people buying new product, I admit, but people are starting to repair machinery that has been left dormant since 2007/2008. This wasn't the case before. If it was within 20-30%to buy new rather than repair, customers would buy new.

I'm not an economist, but I work at the front line of the construction and marine supply market and I just can't keep up with the orders at the moment.

njkmrs

Im in Distribution and we have never been so busy ,but then weve grown for the last 20 yrs fairly solidly year on year.
Its hard to see what all the fuss is about when in a business that has shown steady growth like ours .
I dont take it for granted though .

Terminator X

iTrader: (7)

Gear head - yes pls explain it as I no understand ...

TX.

corradoboy

I don't believe those inflation figures for a second, same with the jobless figures. There's bull$h!t, lies, damned lies, statistics and then government figures.

scoobeenut

I don't understand the inflation figures either, forgive me if i'm wrong (economics not my strong point) but I always thought that a byproduct of quantative easing was an increase in inflation.

Luan Pra bang

Inflation going up means you can buy less for the same amount of money, if you have savings inflation is bad, if you have debts inflation is good. Trouble comes when inflation goes up and wages stay the same as people cannot buy so much stuff and it can cause serious knock on effects for the economy as people end up not being able to buy anything. In the old days the BoE would be inclined to incease interest rates to curb inflation but under certain circumstances like now,that would not work and would cause serious economic problems and stop many poeple from paying mortgages etc.

Trout

iTrader: (1)

It's always someone else's fault

Simple rules...

Take responsibility
Don't live in the past that will make you depressed
Don't live in the future that will make you anxious
Live in the present, it's all you've got

fpan

iTrader: (11)

Germany hasn't seen the crisis yet and together with france they are doing all they can in order not to be affected by it by screwing other countries.

It will eventually hit Germany but it might take longer. Or the southern european countries will be ****ed to save germany and france.
But then again who are the germans going to sell their products to when the people can't afford them?

Greedy politicians are to blame for 50% but the otehr 50% goes to banks.
Why should a private debt be paid by the public?

This article puts things into perspective, spare some time reading it or if you are too lazy just scroll down to the section "german dilemma": http://www.stratfor.com/weekly/germa...an-debt-crisis

EddScott

On the face of it, it does seem odd why people would fear deflation. If deflation means everything starts to get cheaper then that sounds great doesn't it?

However, what if you think rather than buy today, you wait another a couple of months because everything is getting cheaper. Then two months down the line you think I tell you what, give it 6 months and this item I want will be much cheaper, awesome!

Well sort of. If everyone has the same idea then demand decreases. If demand for the item you want to buy goes down the company that makes that item isn't selling as many as it was before. If its not careful, that company might have to start laying people off.

People start being laid off because demand has reduced causes demand to fall even further because no one has any money. Companies start going out of business, loans don't get repaid so banks start losing money so credit drys up and we're back in 2008.

Inflation has gone down because the VAT going up last year has dropped out of the equation. Fuel went up in Q1 2011 much faster than it has now (although I note a couple of pence up this morning). Gas and electric bills will stabilise or reduce this year which will reduce inflation. Insurance premiums seem to have stabilised so that will reduce inflation. We aren't spending as much as we used to so that will reduce inflation.

Those things that were driving inflation up have pretty much gone. The only thing artficially keeping inflation high is Quantatitive Easing. Imagine pumping in £325bn into the economy in say 2006? We'd be paying £1000 for a loaf of bread!!! They stop QE and inflation would go off a cliff. A little inflation isn't bad for the economy. Deflation can cause a spiral that is hard to recover from. Japan had a "lost 10 years" from deflation. They really only survived because they don't use credit that much and they have/had good exports.

fpan

iTrader: (11)

So which country is next?
http://www.guardian.co.uk/commentisf...e&type=article

The best thing UK has done is to stay out of the €.

EddScott

Probably for the best but we still managed to pi55 away every last penny.

We can hardly stand on a soapbox and preach to Greece when we are no better ourselves. The only difference is that we have a taxation system that actually works.

fpan

iTrader: (11)

It's not the taxation the problem in Greece, ditto there may be cases but this is not the majority.

The politicians of the last 30 years have wasted the money of EU and used huge amounts of them for comission which has got into their pockets and those of their friends.

Now the people have to pay the price.

That's the reason no greek politician has the ***** to say no to the EU, they are so corrupt that EU holds them by their *****.

If they dare not to listen their scandals would be revealed and they would end up in prison the next day.