It’s summer. The economy is collapsing.
Hmm:
The British economy is growing at its fastest pace in 80 years and could recover its pre-pandemic size by the end of this year, according to a leading economic forecaster.
Buoyed by the vaccine rollout and a bounce back in consumer spending, the EY Item Club said it now expected GDP to grow by 7.6% – which would be the fastest annual growth in national income since 1941.
The Elynomics model might need calibration.
‘Calibration’ ?
As in:
“This is one of our finest cannons, have a look down the end…”
“a leading economic forecaster”: likely to be about as useful as a leading epidemiologist’s forecasts. Though much less harmful, I’ll grant you.
As full of bullshit as Spud is you can pull the other one for your 7.6 % growth. Just more Johnson/Sunak bullshit. Looking around the wrecks of towns I pass through I see no such evidence. Theo’s wife’s hairdo as our pent-up demand salvation was more credible.
I dunno, it looks pretty dire to me. I hadn’t realised how serious this pingdemic was but I’ve just been to Sainsbury’s and I haven’t been able to get any of my favourite beers and wines.
If this continues it will be the death of the economy as we know it.
Like dearieme, I have little confidence in forecasters. All they do is look for an analogous situation in the past & presume a repeat. There are no analogous situations. No-one’s shut down an economy before. Yes you’ll get a measure of deferred spending. But past the sort term, a lot’s going to depend on how much confidence people have. Confidence shot to hell. There’s as much incentive to defer & wait as there is to take opportunities now.
I was listening to someone playing the oracle about aspects of our local economy. Yes we are getting more tourists than we were last year. But the tourists we’re mainly getting are Spanish from the inland cities taking the holidays they didn’t get last year. And their spending patterns are entirely different to Brits, Dutch, Belgians, Scandies etc So it’s no use using ’19 as any sort of benchmark.
“All they do is look for an analogous situation in the past & presume a repeat.” If epidemiologists had had the sense to do that their forecasts would have been less awful.
Do you remember the scene from the film Zulu when the drunken pastor yells “You’re all going to die”? The epidemiologists do likewise. They will be right in the long term, of course, but so would an infant be. Hell, even AI is probably capable of that.
Hate to say this Tim but because of the Pingdemic I have zero confidence in that forecast – could be a case of a stopped clock being right twice a day here. Unless they end lockdowns completely and disband SAGE and remove ‘Test and Trace’ then they’re in the brown stuff and they know it.
I am more interested in the rest of the post. Those North Koreans and former East Germans, as well as Viz celebrities and so on who have been successful in infiltrating his blog need to step up – here’s a list of potential ‘threads’ for TRUK this summer
It seems that in response to the fairly successful threads I have been doing on money there are dimensions to this that people think need development.
Particular themes that seem to be requested include:
The limits to money creation
Money creation and inflation
What types of inflation can be controlled
Tax and controlling inflation
Money creation and full employment
Money creation and the exchange rate
Who owns the national debt
What would happen if the national debt was repaid
Why we might need a national debt
Money creation, saving, debt and taxation
The multiplier
Why interest is not an issue of concern
Why QE need not be unwound – and won’t be
I suspect there are more themes, and some of these obviously overlap, but I am keen to know what the questions are. I have time to dedicate to these issues, and it would be good to know what people want.
Might you let me know? There are no promises as to when these things might be done – writing a thread takes a lot of thinking before my fingers ever hit a keyboard – but I want to plan this now. So, if you have a request, lob it in.
Surely there’s some ‘worthy topics’ we can add….
The post on ‘Good Corporate Governance’ is another seminal classic of the genre if you are short of material..
‘The logic Wates is using is a very long way apart from that which we use, but I suggest that only one is in the public interest.
He that believeth in Spud shall know eternal salvation…
The word “growth” is utter nonsense – they mean “partial recuperation” (“recovery” would overstate it).
But +7.6% after -20.4% means 85.6% of where it was before – that’s not implausible since we’re all eating (some people are actually eating more than before – BBC says average weight gain of 7lbs) so quite a lot of the economy is working at 100% of normal and all the civil/”public” service is getting paid whether they are working or not so that slice of GDP is recorded at 100%. In fact, to get a 14.4% fall in the whole of GDP from the non-food private sector we need more than what BiND and Mr Ecks have seen.
I wonder how much of that drop is caused by the serious reduction in commuting/holiday travel.
Between fuel, cars/planes/ferries+ writeoff and assorted related factors, that is a large chunk of GDP that simply doesn’t happen currently compared to 2018/19.
Anecdotal, but still… the willingness to spend money has only increased, as I noticed a weekend back at one of the few events that Got The Go.
Unless you truely misplace/judge your merchandise people will buy, in droves… Even the Bad Spots did three times their usual turnover, and trunks and trailers went home a lot lighter than expected…
It’s all relative, of course, but GDP numbers are skewed, and the “past performance is no guarantee for future yield” goes double for whatever is going on econiomically right now.
If an economic nincompoop like me can see that, an Elyan Sage …..welll…. One has some expectations when someone claims Expertise..
@ Grikath
Yes, but *what* expectations when it’s Murphy?
@John77
Given that I volunteer for the Salvation Army…. “Everyone can Be Redeemed”
Some, of course, need a bit more work/understanding/leeway….
Is that 7.6% before or after correction for the massive monteization of new central government borrowing?
I’ve not been able to get plain chocolate Hob Nobs for months.