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Recession or Inflation
My turnover has dropped by approx £1000 per week. Some of my customers have laid off staff and gone on short weeks.
Maybe if they cut interest rates by 1 1/2% and forced Credit Card Companys to reduce there interest rates to a reasonable level people would have money to spend again. I stopped using Credit Cards because I wasn't prepared their rates.
Yes that might lead to inflation but once we were through the bad times inflation could be tackled.
if interest rates are cut without similar cuts in other major currencies the value of the £ will drop driving up the costs of imports in turn raising inflation.
old biddies that will rely on their old age savings will suffer too.
[main benefit is exporters will find it easier to export, but we do not export much these days as we are no longer a major manufacturing nation]
Maggie thought that the whole whole country could be financed from the "square mile" with no need to have a manufacturing export, so what happens when the square mile is in trouble.
The saying back then was "we are not in the buisness of propping up lame ducks"
good point no wonder gordy is so desperate to bail it out.
Sole Trader so no one to lay off. I have to find £4700 for the Taxman by 31st Jan. As I am now earning £250-300 per week less than last year I will probably have to go Bankrupt unless things turnaround within the next week or two and we all know that is not going to happen.
will need a 4p cut on tax perhaps to get things going.
The Government (not only ours as well) has a huge problem and it is now a case of damned if you do and damned if you don't.
These are the problems....we, as a nation, have been encouraged to spend well beyond our means (we are 50% at fault as well for accepting the tempting offers)and we have also been encouraged to enter all manner of risky financial bets using housing equity as collateral.
Many people would never put £100 on the nose of a nag to win a six horse race yet they think that putting their life savings into shares is acceptable or even into banks offering suspiciously high rates of interest and curiously, they seem to think that the 'gamble' is safe. Not only that but they expect a Government to bail them out when the 'gamble' goes AWOL.
People have also accepted indebtedness as a way of life. The economy of this country was based, to some extent, on debt and house price increases aka 'equity'. Now, something eventually has to give if you regard any economy as a spring that is gradually tightening and has no industrial oil to loosen it.
Yonks ago industry would have come to the rescue but this is no more in the UK and to an extent, in The States. Manufacturing produces items that provide measurable, tangible profit whereas economies based on financial dealings and assumed values provide no real measurable profit as all you tend to do is sell items from person to person increasing the price each time. Eventually the items become to expensive and people try to sell to get cash which can be exchanged for goods.
The Government of The States poured huge amounts of money into the country after the 1929 crash. This did not do much good and it was ONLY WWII that got them out of the mire. In the early 30's Germany tried to combat a weak, bankrupt market by pouring money into private and public schemes and public buildings with the result that inflation became rampant (I'm sure we all remember collecting 300 million mark stamps). The Governments of the World have already pumped $3trillion into the financial markets which has not really been effective (as history would seem to indicate).
Whatever our Government decide to do, although I suspect that they will be, as they have been until today, firefighting rather than planning,the general public will lose some of their recklessness and positive expectations of investing into various financial vehicles. I also feel that people have finally woken up to the fact that debt is expensive and can be debilitating, so they will perhaps be cautious when buying goods and even save up for items rather than follow the 'I want it and want it now!' mantra.
I suspect that the Government will be guided by events rather than vice-versa but whatever they do will need to be backed by huge amounts of money which will have to come in the form of taxation as our industrial base is rather limp and will continue so for ages.
It is abundantly clear that an economy cannot be based on financial prowess (have we forgotten Thatcher's years when 20% of all workers were in *ahem* financial services *ahem*?)
If I were GB or Darling I would be bricking it.
once people accept shares are worth less, and its normal for ftse to peak lower, things will start to settle
Sorry for your predicament but should you have not set aside money for your tax debt from previous earnings rather than rely on projected earnings to find the money.
Fully agree with you, both the government, and many of the populace have been living for years in a fools paradise, a debt led economy has to hit the buffers one day, the govenment has not put anything aside since it has been in office and now there is nothing to cushion the situation, I saw on TV that the national debt is likely to be £150B. And as you say have it now and pay later has been rampant, the unfortunate thing is that those who have been prudent are also going to suffer.
I always used to pay into Revenue on a monthly basis and got interest from them for being ahead. Unfortunatley had to have a lot of time off work this year due to leg injuries and wife was out of work for 7 months. All my upfront payments ran out wuth July's payment, been living on an overdraft which just managed to clear today.
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