Gordon Dadds Share Discussion Threads

[pmeas] 05/3/2003 00:45

Inflation.

[trumpet] 05/3/2003 00:41

Pmeas,

The commercial construction industry is predictied to be in recession by this summer - have you not noticed the number of "To let" boards in the commercial market?

That leaves residential, now if there is a boom in residential building just how many people are going to be able to afford the current pricing? The housebuilders are already selectively offering "house exchanges", deposit payment (through cashbacks) and various other incentives. Yes, there's some demand there, but the time to build more houses was over the last few years, that would have prevented the costs going so far out of whack and helped keep manufacturing (and parts of the service sector) competitive by lessening wage demands.

[pmeas] 05/3/2003 00:32

But the boom will come via the construction industry,that we are allready experiencing the begining

[pmeas] 05/3/2003 00:29

imo of course there is look at the money supply.These things take time to filter through, years.

[pmeas] 05/3/2003 00:21

Browns boom is only at grass roots level and the boom thats on its way will take us to 2008 by this time he will be prime minister.

[pmeas] 05/3/2003 00:21

His middle names, stable.

[trumpet] 05/3/2003 00:01

When's the budget Gordon?



Brown boom is turning to bust says IMF

JASON BEATTIE AND JOHN STAPLES


SOARING house prices and Gordon Brown’s high levels of public spending pose a huge threat to the stability of the UK economy, the International Monetary Fund warned yesterday.

In a no-nonsense analysis, the IMF expressed serious concern over the size and speed of spending increases on education and health, the backbone of Labour’s domestic policy.

And it raised doubts about Mr Brown’s prediction that growth would hit 2.5 per cent this year, forecasting a more modest increase of 2.2 per cent.

The annual report on the economy said there were prospects for recovery but "appreciable risks to this outlook stemming from external and domestic uncertainties".

One of the real dangers, the report said, was increasingly high levels of household debt, fuelled by soaring house prices and low interest rates.

New economic data released yesterday backed up the IMF assessment. Mortgage lending rose by 1.2 per cent last month, up from £7.45 billion to £7.75 billion as consumers continued to make the most of the lowest interest rates in a generation.

The IMF report called for "heightened vigilance to these risks by the authorities, especially regarding the possible existence of a housing price bubble with its potential deflationary consequences".

Scotland, which traditionally enjoyed low house price inflation, has seen rapid rises in recent years. Last year, prices in Edinburgh rose by 21.3 per cent, the highest-ever annual rise, with Glasgow up 17.5 per cent. Yesterday, the Halifax reported no let-up with UK house prices rising by 1.7 per cent last month, marking an annual growth of 23 per cent.

The IMF report was also fiercely critical of the government’s politically-charged gamble to pour billions of pounds into the public sector. Its report said: "The need to respond to the demand for better public services is understandable but ... the rapid speed at which spending is being increased raises the risk of inefficiencies."

The IMF also warned about the ability of the additional expenditure to bring improvements without substantial reform. In a damning passage which will give succour to Mr Brown’s critics, it said: "The thrust of ongoing reforms of the public expenditure management framework is appropriate. However, their effectiveness in improving public service delivery - especially in the presence of a sizeable acceleration in spending - is uncertain."

The IMF report came the day after Mr Brown’s stewardship of the economy was damaged by statistics showing that the massive increase in public sector expenditure was in danger of being eaten up by pay rises and additional bureaucracy.

Mr Brown also faces allegations that he is running scared of setting a date for his Budget because of the uncertain economic outlook.

Michael Howard, the shadow chancellor, said: "Household debt is at peak levels, productivity growth is lower than our competitors, Britain’s fiscal position is weakening and there is significant concern over the Chancellor’s spending increases and taxation. He has embarked on a spending spree with taxpayers’ money without making sure money is being wisely-spent."

Matthew Taylor, for the Liberal Democrats, said: "House prices and borrowing cannot rise forever. Britain needs to earn its living and the Chancellor needs to help manufacturing before the house price bubble bursts."

Yet Mr Brown seized on the many positive aspects in the IMF report, particularly the assessment that the UK’s financial stability policy framework had been strengthened significantly in recent years. "The IMF’s positive assessment of the UK’s financial stability policy is recognition of the excellent work undertaken in recent years by the Treasury, Financial Services Authority and Bank of England," he said

[trumpet] 04/3/2003 23:51

Hehe, and then the Swiss will buy us out.

The £'s rising gainst the $, but falling against all the other majors at the moment.

[pmeas] 04/3/2003 23:44

Trumpet another one to watch is if this is the breakout on the £ Britain will buy AMERICA out.

[pmeas] 04/3/2003 23:41

First stop on the £ V $ is 1.6030

[pmeas] 04/3/2003 23:38

Agreed there trumpet the worst is yet to come,astrolgoy gives us two choices war or the power of the people are the two options open and if war prevails 2013 will be the next stock market rally.Personally i have faith in the people this time round.Never have so many countrys had such liberty.

[trumpet] 04/3/2003 23:31

Pmeas,

I take your point on business cycles - but hasn't it been skewed this time around - simultaneous boom and bust across different sectors, for example car sales and the property market booming - a lot due to cheap and easy credit, whilst others are in big trouble (not all associated with .com and tech either).

If investment business picks up then I could be persuaded that the worst has passed, but it's not, why not? More streamlining going on than investment at the moment. If you assume that the respective business leaders have a good handle on forward sales projections then things can't be looking that bright, if there were opportunities there then they would surely go for them.

[pmeas] 04/3/2003 23:21

Time will tell trumpet,i use charts that go 15 20 years,thats probablly why they only ever allow access to 10 yr but i find things as clear as water in my assumptions.

[trumpet] 04/3/2003 23:17

Absolutely part of the normal business cycle. Unfortunately by maintaining high costs in the UK (or making them worse) the chaff will be over here and the seed elsewhere.

[pmeas] 04/3/2003 23:13

Markets at saturation point 2001 onwards and it needs the chaff from the seed.

[trumpet] 04/3/2003 23:12

I didn't, lots of ex-Londoners round here though ;-)

[pmeas] 04/3/2003 23:11

and if ya say London that theres ya answer.

[pmeas] 04/3/2003 23:10

Where ya based trumpet.

[trumpet] 04/3/2003 23:05

Pmeas,

Office premises for a start. I'm self-employed, so that not really significant at all. However, It's the cutbacks that I see at client's premises that are more telling - layoffs, short time working, general cost cutting starting from the vending machines upwards - all the usual stuff, plus tighter budgets ;-(.

Drive round your local commercial estate and count the "To let" signs and that will give you a good feel for what is really going on. Office and commercial space was in very short supply round here a couple of years ago, different story now.

[pmeas] 04/3/2003 22:56

Trumpet can you please identify for me what cut backs you have made since this so called ressession hit.UK i assume.Or are you spending more.

[trumpet] 04/3/2003 22:37

Scrip,

Yep, they've done away with the boxes. The point I was trying making is that MSFT produce a product that is sold in bulk (either physically or electronically). The UK IT market is mainly bespoke work carried out under contract for another company - very few single use applications sold in volume to the consumer/corporate market.

[trumpet] 04/3/2003 22:33

Pmeas,

Onsite service and repair isn't threatened because it has to be perfomed in situ in the large part. However, the design and manufacture of equipment is relocatable.

The EEF expects engineering to contract 0.7% this year and manufacturing to grow 0.4%. The engineering co. I used to work for now employs 1/3 of the staff compared to the levels of the early 90's, after having been through a second wave of redundances in a decade.

[scripophilist] 04/3/2003 22:31

I got to go, I'll try and continue when I am near a PC which will probably be Friday.