And what we know is private capital has ceased to be available for active investment it is now almost solely directed to rent seeking. In that case it is only state created funding that can create this process of change.
Gross fixed capital formation (GFCF), in volume terms, was estimated to have fallen by 0.5% to £85.2 billion in Quarter 2 (Apr to June) 2018 from £85.6 billion in Quarter 1 (Jan to Mar) 2018.
Business investment was estimated to have fallen by 0.7% to £47.5 billion between Quarter 1 2018 and Quarter 2 2018.
Between Quarter 2 2017 and Quarter 2 2018, GFCF was estimated to have fallen by 0.6% from £85.8 billion; business investment was estimated to have fallen by 0.2% from £47.6 billion.
The sectors that contributed to the 0.5% GFCF fall between Quarter 1 2018 and Quarter 2 2018 were public corporations’ dwellings, business investment and private sector transfer costs.
The asset that contributed most to the decrease in GFCF over the same period was transport equipment.
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2. Things you need to know about this release
The estimates in this release are short-term indicators of investment in non-financial assets in the UK, such as dwellings (residential buildings), transport equipment (planes, trains and automobiles), machinery (electrical equipment), buildings (non-residential buildings and roads) and intellectual property products (assets without physical properties – formerly known as intangibles). This release covers not only business investment, but asset and sector breakdowns of total gross fixed capital formation (GFCF), of which business investment is one component.
Business investment is net investment by private and public corporations. These include investments in transport, information and communication technology (ICT) equipment, other machinery and equipment, cultivated assets (such as livestock and vineyards), intellectual property products (IPP, which includes investment in software, research and development, artistic originals and mineral exploration), and other buildings and structures.
Business investment does not include investment by central or local government, investment in dwellings, or the costs associated with the transfer of non-produced assets (such as land).
£50 billion a quarter. £200 billion a year, maybe 10% of GDP. Private capital has ceased to be available for active investment. Hmm.