UK manufacturing figures deal hammer blow to recovery hopes

[polo mint]

Thanks

 

 

 

Germany is in the EU and it is in the Euro but the German economy isn't tied to than that of Greece. They make stuff. They export stuff. Investors are quite happy to lend money to the German government. They are fairly happy they will get their money back and they don't ask for 'danger money' to cover the risk of lending.

 

Draghi would like the Germans to underwrite Greek debt but (for some strange reason) the average German isn't too happy with the idea of paying out continuously to bail out the Greeks.

 

Two comments I've heard recently:

 

"Why should I work until I'm 70 and send my money to Greece so that the average Greek can be given 14 months pay a year and retire at 53?"

 

"The Federal government say there's no money to pay for a bypass for our town - Yet there's plenty of money to send to Greece. Perhaps the next time she's standing for election, Merkel will go after the Greek vote. - She's not getting mine!"

 

Similarly the UK exported over 1000,000 motor vehicles last year. The return on our bonds is around 1.8% and our economy set to outperform the Eurozone including almost all individual countries.

I don't know why some folks want to talk down this country and its economy. Considering the world financial situation and the level of debt that was run up things could and would have been a lot worse.

[Rupert_Baehr]

... The return on our bonds is around 1.8%...

 

And the reason that the interest rate asked of the UK is so low is that foreign investors are happy with the policies of the present government and are prepared to entrust their money to the UK.

 

I don't know why some folks want to talk down this country and its economy. Considering the world financial situation and the level of debt that was run up things could and would have been a lot worse.

 

Moaning is a national pastime.

- The time to worry is when people stop moaning ...

[Rupert_Baehr]

The best thing that Germany and the other stable states could do is to leave the Euro...:-)

 

I hear there used to be a nice stable currency called the Mark. It's even got the same number of letters , you could easily retool the print designs and coin dies to accomodate it

 

Why would you have to re-tool anything? - Apparently it's already been done.

 

http://search.conduit.com/Results.aspx?q=Germany+printing+Marks&SearchSource=49&ctid=CT2801948

 

If Germany did decide to leave the Euro, I'm not sure how they would do it - but it would be possible.

 

Presumably they could nominate a change-over date and on that date:

 

1. Convert all sums held in German Bank accounts into Marks (they wouldn't want to subsidise the rest of the Eurozone - and why should they?)

 

2. Allow individuals to exchange up to (say) 1000 Euros into Marks (most people do have some cash; but few individuals would have [legal] petty cash holdings exceeding €1000)

 

Both of those exchanges would be at a fixed rate decided by the government. Perhaps 2 Marks = 1 Euro [the exchange rate at which they went in.]

 

Then allow the Mark to trade on the open market. - It would probably be worth significantly more than the fixed rate.

[I1L2T3]

And the reason that the interest rate asked of the UK is so low is that foreign investors are happy with the policies of the present government and are prepared to entrust their money to the UK.

 

 

 

Moaning is a national pastime.

- The time to worry is when people stop moaning ...

 

It's not THE reason, just one of the reasons. QE and banks being forced to recapitalise are others. And to say investors are happy with the policies is over-egging it. No investor is going to be satisfied with 1% returns. In a terrible environment they are looking for the lowest risk places to invest in and our risk is lower simply because we have our own currency. The UK is relatively safe compared to Eurozone.

 

The demand from abroad is not something to celebrate. The more we borrow from abroad the greater the proportion of non-UK debt holders is and the more we are exposed to volatile international markets

[I1L2T3]

The best thing that Germany and the other stable states could do is to leave the Euro...:-)

 

Spot on. Won't happen though.

[Uptowngirl]

It's not THE reason, just one of the reasons. QE and banks being forced to recapitalise are others. And to say investors are happy with the policies is over-egging it. No investor is going to be satisfied with 1% returns. In a terrible environment they are looking for the lowest risk places to invest in and our risk is lower simply because we have our own currency. The UK is relatively safe compared to Eurozone.

 

The demand from abroad is not something to celebrate. The more we borrow from abroad the greater the proportion of non-UK debt holders is and the more we are exposed to volatile international markets

 

The borrowing is only to bridge the deficit between government tax collected and government spending which was running out of control at £175,000,000,000 per year. It was because of spending cuts that £175 billion has been reduced to a level where rating agencies are confident that Britain can honour its debts. That is why we are paying around £18 billion per yesr in interest raher than £70 billion if our bond rates were forced up to those of Italy, Spain or Ireland.

Germany is in the Eurozone and has even lower interest on its borrowing than we do. It is countries that have their finances under control and are not spending to gain short term popularity that are paying less and countries like Greece that has lived beyond its means for longer than the UK did who's rates have spiralled to the point of certain default.

[I1L2T3]

The borrowing is only to bridge the deficit between government tax collected and government spending which was running out of control at £175,000,000,000 per year. It was because of spending cuts that £175 billion has been reduced to a level where rating agencies are confident that Britain can honour its debts. That is why we are paying around £18 billion per yesr in interest raher than £70 billion if our bond rates were forced up to those of Italy, Spain or Ireland.

Germany is in the Eurozone and has even lower interest on its borrowing than we do. It is countries that have their finances under control and are not spending to gain short term popularity that are paying less and countries like Greece that has lived beyond its means for longer than the UK did who's rates have spiralled to the point of certain default.

 

Our deficit is increasing again. Debt continues to increase. Fiscally we're in a shocking state. But we can print.

[Uptowngirl]

Our deficit is increasing again. Debt continues to increase. Fiscally we're in a shocking state. But we can print.

 

That's totally false apart from us being in a shocking state.

In 2010 we had a planned deficit of around £175 billion and this is what was being said.

 

http://www.guardian.co.uk/business/2010/may/05/uk-budget-deficit-worse-than-greece

 

UK budget deficit 'to surpass Greece's as worst in EU'

 

European commission's spring forecasts put UK budget deficit this year at 12% of GDP – the highest in the European Union and worse than Treasury estimates

 

 

Katie Allen

guardian.co.uk, Wednesday 5 May 2010 16.26 BST

 

 

 

The European commission forecast for the UK budget deficit is higher than Alistair Darling's.

 

Whoever wins the election must make sorting out the public finances the top priority, the European commission warned on the eve of the poll, as it predicted the British budget deficit would swell this year to become the biggest in the European Union, overtaking even Greece.

 

The commission's spring economic forecasts put the UK deficit for this calendar year at 12% of GDP, the highest of all 27 EU nations and worse than the Treasury's own forecasts.

 

The country's budget shortfall was the third largest in the EU last year but will overtake both Greece and Ireland this year, according to the forecasts. Greece's measures to tackle its public finances problems are projected to cut its deficit to 9.3% of GDP.

 

 

 

In 210/11 the deficit was cut to £136.8 billion

In the last financial year that deficit had reduced to £126 billion.

In 2012/13 the target is reduced again to £92 billion. Whether that target is met won't alter the fact that the deficit is reducing. That was the plan that stopped us losing our AAA + credit rating and why the repayments on our huge debts aren't increasing. By cutting £50 billion from the deficit we have probably saved £30 billion in increased interest which in itself would have required even lager cuts as is happening in Greece right now.

[I1L2T3]

That's totally false apart from us being in a shocking state.

In 2010 we had a planned deficit of around £175 billion and this is what was being said.

 

http://www.guardian.co.uk/business/2010/may/05/uk-budget-deficit-worse-than-greece

 

UK budget deficit 'to surpass Greece's as worst in EU'

 

European commission's spring forecasts put UK budget deficit this year at 12% of GDP – the highest in the European Union and worse than Treasury estimates

 

 

Katie Allen

guardian.co.uk, Wednesday 5 May 2010 16.26 BST

 

 

 

The European commission forecast for the UK budget deficit is higher than Alistair Darling's.

 

Whoever wins the election must make sorting out the public finances the top priority, the European commission warned on the eve of the poll, as it predicted the British budget deficit would swell this year to become the biggest in the European Union, overtaking even Greece.

 

The commission's spring economic forecasts put the UK deficit for this calendar year at 12% of GDP, the highest of all 27 EU nations and worse than the Treasury's own forecasts.

 

The country's budget shortfall was the third largest in the EU last year but will overtake both Greece and Ireland this year, according to the forecasts. Greece's measures to tackle its public finances problems are projected to cut its deficit to 9.3% of GDP.

 

 

 

In 210/11 the deficit was cut to £136.8 billion

In the last financial year that deficit had reduced to £126 billion.

In 2012/13 the target is reduced again to £92 billion. Whether that target is met won't alter the fact that the deficit is reducing. That was the plan that stopped us losing our AAA + credit rating and why the repayments on our huge debts aren't increasing. By cutting £50 billion from the deficit we have probably saved £30 billion in increased interest which in itself would have required even lager cuts as is happening in Greece right now.

 

It's not false at all. Osborne made some headway with the deficit but now it's increasing again. He's missed his targets and has had to extend the time it will take to reduce it altogther. Our debt has of course continued to increase.

 

Part of the headway was made by hijacking the funds of the Royal Mail pension scheme for a one-off £28bn fiscal boost. He won't be able to do that every year. We hear so much about unfunded pension liabilities - by nationalising the Royal Mail scheme he's created another unfunded scheme, liabilities to be met from tax year after year.

 

Don't compare our deficit with Greece. It was a political spin trick for idiots back in in 2010. There was never any serious comparison to be made.

[mj.scuba]

It's not false at all. Osborne made some headway with the deficit but now it's increasing again. He's missed his targets and has had to extend the time it will take to reduce it altogther. Our debt has of course continued to increase.

 

And of course it will continue to increase whilst ever we are in deficit, but we're a long long way off being in surplus in order to start paying down the national debt.