Britain is officially back in recession. Double-dipping

[Mecky]

I don't know if anyone has noticed but the current government isn't exactly popular at the moment with both the media and the UK public. In fact I very much doubt no amount of bribing will see them through the next General election. I bet the people who moaned at Labour are really kicking themselves now.

[MrSmith]

As HM's official opposition they had a duty to raise the issue continuously if it was going to be as ruinous to the country as GO claimed in 2005-6. Only one voice on the opposition benches - Vince Cable - and politicians on both sides treated him like a crazy old grandad.

 

When we look at house prices, Tories on the whole liked what was happening. There weren't many complaints about it in the Daily Mail. No end of aspiration lifestyle articles in the Telegraph, Times etc... Voters of all flavours took part in, enjoyed and benefited from the boom. Now it's time to pay. Well maybe not quite now, maybe a little later. But pay they will.

 

I agree with everything you say, but nothing would have changed if they had constantly apposed Gordon’s policies.

Just one point though the Tories did stop the last property bubble inflating out of control when they had the power to do so.

[MrSmith]

I don't know if anyone has noticed but the current government isn't exactly popular at the moment with both the media and the UK public. In fact I very much doubt no amount of bribing will see them through the next General election. I bet the people who moaned at Labour are really kicking themselves now.

 

Can't say that I am. NO

 

Raving Loony Party would do a better job than Labour.

[LeMaquis]

I bet the people who moaned at Labour are really kicking themselves now.

 

It will take a long time before the last Labour government is forgiven.

[I1L2T3]

I agree with everything you say, but nothing would have changed if they had constantly apposed Gordon’s policies.

Just one point though the Tories did stop the last property bubble inflating out of control when they had the power to do so.

 

They did nothing deliberate to stop it unless you consider complete economic ineptitude resulting in 12-13% base rates to be deliberate.

[I1L2T3]

It will take a long time before the last Labour government is forgiven.

 

The opinion polls seem to suggest otherwise.

[MrSmith]

They did nothing deliberate to stop it unless you consider complete economic ineptitude resulting in 12-13% base rates to be deliberate.

 

That’s what stopped it, see government can't win, you moan when they do nothing and you moan when they act.

 

Increasing interest rates stops people borrowing which in turn stops inflation and house price growth, of cause it hurts those people that have already borrowed, instead of those people that have saved. But it didn't leave the next generation unable to buy an house.

[I1L2T3]

That’s what stopped it, see government can't win, you moan when they do nothing and you moan when they act.

 

Increasing interest rates stops people borrowing which in turn stops inflation and house price growth, of cause it hurts those people that have already borrowed, instead of those people that have saved. But it didn't leave the next generation unable to buy an house.

 

Interest rates hit those levels because the Lawson boom caused inflation to spiral out of control. The rates stayed high through 1990-91 and tipped us into recession. It was economic ineptitude of the highest order not some virtuous, considered and carefully executed economic plan.

[MrSmith]

Interest rates hit those levels because the Lawson boom caused inflation to spiral out of control. The rates stayed high through 1990-91 and tipped us into recession. It was economic ineptitude of the highest order not some virtuous, considered and carefully executed economic plan.

 

It highlights nicely that everything the people want will cause a boom which will inevitably lead to a bust. Welcome to the boom bust cycle.

 

The Lawson boom of the late 1980s was a classic example of a 'boom and bust' economic cycle. The late 1980s were a period of rapid economic expansion. This was caused by rising house prices, tax cuts, lower interest rates and high confidence. However, the boom cause a rise in inflation and a larger current account deficit.

The effect of these tax cuts was a fiscal stimulus which helped to increase disposable income and consumer confidence. This led to a rise in consumer spending and economic growth.

Policies to tackle this inflation caused the recession of 1991-92.

[rickiethecat]

It highlights nicely that everything the people want will cause a boom which will inevitably lead to a bust. Welcome to the boom bust cycle.

 

But if it's a cycle then eventually a boom will follow the bust phase we're currently going through. This means that the government doesn't need to do anything different, just ride out this short term recession phase and we can look forward to good times ahead within a year or two.