Tuesday, October 26, 2010

Am I Missing Something? Since When Has a Fall of 0.4% In Growth Been Good For The Economy?

The economic growth figures released this morning were apparently not as bad as feared, now there is a surprise - not! Call me cynical, but when the day before the Q3 figures were released the media starts reporting in a frenzy about how bad the figures are going to be and that a sharp decline is expected, I start to think that our expectations are being managed and that we are being heavily manipulated by the spin doctors in the Tory coalition government.

The media were trying to whip people up into a state of flux yesterday to expect very bad economic news this morning and then hey presto, as if by magic, when the figures were eventually released this morning, the government is now saying that actually the fall was not as bad as expected and that the figures of 0.8% from the last set of figures showing a robust growth of 1.2% were really quite good!

I mean really, did anyone not really see this one coming?

Are these people insane? Of course these figures are NOT good. Apparently we have to do a bit of adding and subtracting to see that these are strong figures, we are told to strip out construction because actually in the last set of figures this was higher than expected and then add the 0.8% figure into Q1. Q2 and Q3 and we arrive at a figure of 2% growth, so apparently, that is OK then? NO IT IS NOT!

However, let's play the Tory game with Britain's finances and take out the growth in construction and we get to an approximate figure of the magic 0.8%, which by even more magic, is virtually the same as the latest set of figures, which means that the UK economy did NOT grow at all in this last quarter and we are supposed to think this is good?

[1].The salutary lesson here is that if construction is not growing, the housing market is flat and consumer confidence is low, this all precedes an impending recession.

[2].To have an economy stuck at 0.8% growth (which incidentally means the BoE AND the IMF have predicted the UK economy INCORRECTLY yet again) and going into a savage round of spending cuts, of £83 billion, is complete and absolute LUNACY!

[3]. Far be it for me to "wee wee" on the chancellor's fireworks, but I would also like to remind him and the "whooping media" that the stronger than expected growth in Q1 and Q2 was entirely down to the outgoing Labour government's management of the economy and as the chancellor has now stripped virtually all of Labour's policies out of the system, we are actually seeing the first quarter of this Tory/coalition's financial period and it is recording only 0.8% growth, an actual FALL of 0.4% on the outgoing Labour's figures. What is good about that?

[4]. More if this trend is to continue into Q4 and we see another fall of 0.4%, what then? Q4 will be the quarter immediately preceding the £83 billion pounds being taken out of the economy by this Conservative chancellor and the massive hike in VAT up to 20%. The news today is not good, in actual fact it is abysmal and I cannot see how these so-called economists on the news cannot see what is plainly staring people in the face. But then this conservative chancellor and Mervyn King, the OECD and the IMF all FAILED to see the looming credit crunch the banking crisis and the global financial crash. But ordinary little NON economists like me saw it coming!

As I mentioned above I am not an economist and I do not pretend to be, but here I think not being any of these things enables me (and others) to see things more clearly, we are not blinded by those trees, so we can see the woods! We do not factor in the overly and often unnecessarily complicated "ifs and buts", which enables me to see that the UK economy is on the verge of contracting and this is without the chancellor's insane spending cuts.
They can ignore construction if they like, this lady's not for ignoring!
Construction and the building industry is always the first hit in this country and the last to recover, in January and under the auspices of the Labour Government and after a horrendous time, it started to pick up and the economic figures confirmed that, HOWEVER, ask any builder, the industry has SHARPLY declined in the past 3 months and the order books are sparse and empty once again and this certifiably insane government's, cancellation of the "Schools for the Future" programme of the previous Labour government, will go down as what actually really started the contraction of the UK economy and into a double dip recession.

Remember you read it here first!

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