This Could Be The Biggest Recession Since The 1930s

[Chekhov]

Many of us have thought we were going to get a massive recession after shutting down much of the economy for months on end during the pandemic, and also huge inflation (15% or more is perfectly possible) from the many billions pumped into at at the same time. But I reckon it's going to be even worse than I originally thought, partly because of the war in Ukraine, but also because many people  (esp in their 50s and 60s) have dropped out of the labour market.  They were at home off work getting used to not doing much with their money (because they couldn't) and basically got out of the habit of working. This was exacerbated by the recent relaxation in the rules as to what people can do with their pension pots (taking it our as cash rather than having to invest in an annuity paying them every month for the rest of their lives). This is one of the main reasons for low unemployment at the moment, and because there is no longer free movement of labour, we cannot compensate for it like we could before. Even worse, those 50 and 60 somethings are, because of their experience, some of the most productive in the economy, so the effect on the economy will be even more significant.

But it could get even worse because many of these early retirees will find their money does not last as well as they thought (esp with high inflation) so they will be re-entering the labour market, possibly whilst we are in a serious recession.

I am really worried, hold on to your hats, this is going to hurt, and possibly for years and years.

[Padders]

13 minutes ago, Chekhov said:

Many of us have thought we were going to get a massive recession after shutting down much of the economy for months on end during the pandemic, and also huge inflation (15% or more is perfectly possible) from the many billions pumped into at at the same time. But I reckon it's going to be even worse than I originally thought, partly because of the war in Ukraine, but also because many people  (esp in their 50s and 60s) have dropped out of the labour market.  They were at home off work getting used to not doing much with their money (because they couldn't) and basically got out of the habit of working. This was exacerbated by the recent relaxation in the rules as to what people can do with their pension pots (taking it our as cash rather than having to invest in an annuity paying them every month for the rest of their lives). This is one of the main reasons for low unemployment at the moment, and because there is no longer free movement of labour, we cannot compensate for it like we could before. Even worse, those 50 and 60 somethings are, because of their experience, some of the most productive in the economy, so the effect on the economy will be even more significant.

But it could get even worse because many of these early retirees will find their money does not last as well as they thought (esp with high inflation) so they will be re-entering the labour market, possibly whilst we are in a serious recession.

I am really worried, hold on to your hats, this is going to hurt, and possibly for years and years.

Things are going to get very ugly Chekhov.....

[Guest sibon]

43 minutes ago, Chekhov said:

Many of us have thought we were going to get a massive recession after shutting down much of the economy for months on end during the pandemic, and also huge inflation (15% or more is perfectly possible) from the many billions pumped into at at the same time. But I reckon it's going to be even worse than I originally thought, partly because of the war in Ukraine, but also because many people  (esp in their 50s and 60s) have dropped out of the labour market.  They were at home off work getting used to not doing much with their money (because they couldn't) and basically got out of the habit of working. This was exacerbated by the recent relaxation in the rules as to what people can do with their pension pots (taking it our as cash rather than having to invest in an annuity paying them every month for the rest of their lives). This is one of the main reasons for low unemployment at the moment, and because there is no longer free movement of labour, we cannot compensate for it like we could before. Even worse, those 50 and 60 somethings are, because of their experience, some of the most productive in the economy, so the effect on the economy will be even more significant.

But it could get even worse because many of these early retirees will find their money does not last as well as they thought (esp with high inflation) so they will be re-entering the labour market, possibly whilst we are in a serious recession.

I am really worried, hold on to your hats, this is going to hurt, and possibly for years and years.

You know what …. I think you are right.

 

Mostly.

 

But I don’t think that the early retirees are the problem. They might well be the solution. I’m one of them, by the way. I really didn’t fancy classrooms full of covidy kids. I’d already reduced my hours and chucked my responsibilities. Covid was the spur for me to stop completely. I won’t be going back.

 

Why the solution, simple really, most are asset rich. If you are 50/60 and own your own home, you have a tidy sum to draw upon should you need to. Getting older folk to spend some of that money might just keep businesses afloat.

 

This is why you should also support the rail workers. Decent pay rises mean that people can spend, which leads to growth. So the way out of this mess is twofold. Get all of us old folk spending and make sure that those working get fair wage rises. Anything else and we are completely in the mire. Now is not the time for meanness.

[Guest]

Unfortunately, you're not wrong

[Dromedary]

1 hour ago, sibon said:

....

Why the solution, simple really, most are asset rich. If you are 50/60 and own your own home, you have a tidy sum to draw upon should you need to. Getting older folk to spend some of that money might just keep businesses afloat.

....

Maybe it would be better if people retired earlier and thus free up jobs for the younger generation as it the younger generation that need the money and will also spend more, housing, furnishings, white goods etc. The older generation maybe asset rich and own their own home but that not much good if they then have to sell it as they will still need somewhere to live, unless its for downsizing purposes. From experience older people also tend to have already accumulated what they need and are not really in need of other things. The ones I know just tend to spend their spare cash on holidaying abroad several times a year. 

 

I have spare cash but nothing that I really want that I can spend it on.... Mind you though, just been looking at some telescopes!

[lobster]

Was allways going to happen ever since the crisis of 2008 . Governments around the world have been pumping money in to their economies and keeping interest rates artificially low . It just needed an event ( in this case 2 covid & Ukraine War ) to start the whole thing crumbling

 

The fact that we now  have a service based economy where nobody makes anything is only going to make matters worse, are non essentials we could see , As 40% of the jobs in the UK  are non essential we could see quite a lot of blood letting

[ukdobby]

7 hours ago, Dromedary said:

Maybe it would be better if people retired earlier and thus free up jobs for the younger generation as it the younger generation that need the money and will also spend more, housing, furnishings, white goods etc. The older generation maybe asset rich and own their own home but that not much good if they then have to sell it as they will still need somewhere to live, unless its for downsizing purposes. From experience older people also tend to have already accumulated what they need and are not really in need of other things. The ones I know just tend to spend their spare cash on holidaying abroad several times a year. 

 

I have spare cash but nothing that I really want that I can spend it on.... Mind you though, just been looking at some telescopes!

They've just moved the women's retirement age up 6 years and men's a year,we can't fill jobs now so people retiring earlier won't help.

[Baron99]

6 hours ago, lobster said:

Was allways going to happen ever since the crisis of 2008 . Governments around the world have been pumping money in to their economies and keeping interest rates artificially low . It just needed an event ( in this case 2 covid & Ukraine War ) to start the whole thing crumbling

 

The fact that we now  have a service based economy where nobody makes anything is only going to make matters worse, are non essentials we could see , As 40% of the jobs in the UK  are non essential we could see quite a lot of blood letting

My bold. 

 

40% of UK jobs are non-essential?  Seems a bit high?

 

Which jobs would you consider 'non-essential'?   Apart from Estate Agents; Wedding / Party Planners, I can't think of many? 

[crookesey]

6 hours ago, lobster said:

Was allways going to happen ever since the crisis of 2008 . Governments around the world have been pumping money in to their economies and keeping interest rates artificially low . It just needed an event ( in this case 2 covid & Ukraine War ) to start the whole thing crumbling

 

The fact that we now  have a service based economy where nobody makes anything is only going to make matters worse, are non essentials we could see , As 40% of the jobs in the UK  are non essential we could see quite a lot of blood letting

Would that include Public Sector jobs?

[forgeman]

If you expect it then it will happen. Why not look on the bright side. There are more jobs vacancies than unemployed. As to we being a service provider rather than manufacturer, what a load of tosh.

We have some of the most cutting edge factories in the world. Just yesterday a company is to build a factory to build air ships and will provide 1800 jobs.

 

I know this post will create some responses but I'm prepared for them.