Monday, 18 January 2010
To double-dip or not?
Yet the IMF is warning today that the advanced countries of the world are facing just this prospect - a double-dip recession. He forsees a drop in Government support for the economies and this to cause a double-dip recession; oh how his words will please Gordon Brown and Ed Balls.
On the other hand, Gordon Brown and Ed Balls spent years ignoring the wise warnings of the IMF, so just be aware when you listen to the newsbites that labour will create what a total sham it is now that Labour agree with the IMF.
As it happens, there is not a very big chance of a doubel dip recession this year in the UK. the reason for this is for a dip you need to have an up, or even a flat-line. The truth is the UK economy is sclerotic and bouncing along a very low bottom. There ain't much lower it can go. Even recent good Xmas numbers from the retailers (a prediction of 6% average rise my co-writer Bill Quango nailed) are a bounce from last years epic low.
Just to prove the point, the E&Y Item club has published today a grim outlook for the UK economy. needing exports and less consumer demand, but unable to generate either. Seemingly the economy is set to bounce along the bottom.
On the plus side, with unfeasibly low interest rates and printing money, there will be a continued boost to the monetary economy that will see us avoid a double-dip. To get growth though, we are going to need to cut excess budgets and lower taxes and regulation. More enthusiasm from our Political Leaders is needed for this.