I have my Noah's Ark ready trimmed and waiting ;o)
A few months ago, there were three television programs within the same week,covering the economy here in the UK and also World-Wide. Various facts were aired by some very highly rated and knowledgeable people in the field of world finance. But what stuck out the most, was in one program the 'black book' used by analysts (UK!) was considered out of date, with the end result, the reporter threw his copy in the Thames and to a watery grave.
There is a blip in the scales, and some firms and people are beginning to tighten their belts, perhaps to a strangulation point. But haven't we been through this on other occasions and survived. Only yesterday, I was reading about the increase of house repossessions and bankruptcies, and finance providers hinting on possible government help. But in the main, all this appears to be a sign of a 'must have now' society, instead of a survival society.
There is a company I know of who recently paid off 100 plumbers/heating engineers on a friday lunch time. Due to the fact that it was tied in with major house builders who have stopped building. At the end of the day, the house prices could not keep going up at the rate they were along with large increases in fuel and household energy bills. I don't think we are in a full blown recession yet, just ordinary folk like me are spending most of our wages on just getting by. So there is very little left to spend on home improvements, new cars, tellys and stuff. A knock on efffect occurs right down the chain.
Actually the definition I gave isn't specifically our government's, it's used in America as well.
The UK GDP grew by 0.2% in the second quarter of this year, and by 0.3% in the preceding quarter, so we're not facing a recession just yet. The american economy grew by 1.0% in the first quarter, so they're not facing one yet either.
Obviously people use the word recession when they are facing redundancies and falling revenue streams, and nobody is immune - my sector of the IT industry is not exactly booming along at the moment. We're not alone in facing these problems, the European economy as a whole economy shrank at an annualised rate of 0.8% in the second quarter of this year, and the three biggest Euro-economies - Germany, France, and Italy all saw a drop in GDP.
The enemy is inflation, and the UK rate in July was 4.4%. The Bank of England will want to see this falling before it is likely to do anything about the 5% base rate, and that doesn't look likely this side of Christmas.
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