Recession predictions post Osborne plans

From various sources:

RBS economists: 2017/18

RBC Capital: 2018

Jones Lang Lasalle: 2017

HSBC Economist forecast: 2018/19

Of course economics forecasts are tomorrow's chip paper. But the UK Government has staked its financial credibility on their being no recession.

With one, the Country's finances will be very quickly back in the mire of 2008/12 in terms of its overall deficit.

Considering the Tory domination of the political stage, why did they make such a bold gamble that could well lose them the next election with the economic credibility in ruins a la 1997?

Osborne scraps tax credit cuts

- Backs off in the face of opposition

- Replaced by heroic forecasting of economic growth in next 5 years

- Huge cuts to transport budget and other non-skollznhozpitals spending

A good political 'budget' shoots all Labour foxes.

I wonder though, if this timidity is shown now, what is going to happen when the economy turns south in the next few years?

The Big Day for Construction

It is an interesting phenomena that in the UK construction make-up of the economy is only around 6.5% of GDP.

George Osborne wears a lot of hard hats for that  - yet you never see him volunteering in a call centre or working in an office doing some marketing services work - both of which are services industries which account for around 70% of GDP!

Today the Government has some crazy idea about forcing housebuilders to build; as if developers are not going all out.

Here are some timely anecdotal tips:

Berkeley Homes is run by the most canny real estate investor in the UK - Tony Pidgley. He has long been trying to build as many houses as he can whilst the boom last and running down the land bank of his company whilst prices for land are so high.

Also, a friend of mine in the construction industry has noted that overall capability in the sector is well down on what it was in the 1990's. Major Government schemes slowed and also public sector work had crowded out private sector early in this century - a final hit was with the Financial crash. All the major companies are now smaller and many are in financial trouble. Even big players like Balfour Beatty have had a bad year; their shares are down over 30%. Where these companies like Laing O'Rourke are doing well is in the Middle East, not in Blighty.

Against this backdrop of housebuilders working at capacity and commercial construction struggling with demand overall we have the Government claiming it is going to beat them up - by trying to out compete them.

Where are the businesses going to be to complete these houses then? Where are the contractors? What price are they going to charge the government when their issue is supply chain challenges and escalating costs - not lack of demand?

I fear another Government solution has been found for the wrong problem at exactly the wrong time in the market.

Autumn Statement; Are the Tories and Labour working together on it?

Watching the media being generated at the moment around the total non-event that is the Autumn statement it is hard not to believe that finally Labour and the Tories have united for a national coalition.

The contents of the Autumn statement are bordering on non-existent. New roads that have already been announced, £2 billion in spare change for the NHS that is only £1.3 billion really. Flood defence spending allocated, but was announced in the Budget. These are not even worthy of a mention in reality but because we need an Autumn statement have been cobbled together as some sort of 'event.'

What is even weirder for those who can still be bothered to pay attention is that Labour and the Tories have exactly the same policies on everything that is important.

Europe, stay in,
Immigration, shrug shoulders,
Taxes, raise a bit via leaving thresholds under inflation
Deficit, ignore
Debt, increase hugely
Health, spend like billio
Welfare, pretend reform but ignore the Pensions issue
Defence, cut spending
Education, stop reforms

They are literally the same. As for the Lib Dems, well who cares anymore, I doubt even they do.

Yet in the media Labour criticise every Tory cut and the Tories lambast Labour for their economic profligacy. In reality, the debt and deficit position of Osborne is identical to that which would have occurred under Alistair Darling. There is not one iota of difference in the real world.

In fact, bar some educational changes, the Tories have achieved nothing at all that Labour would not have done of any major significance.

This is the real cause of the rise of UKIP, SNP and Greens. Sections of the population are slowly realising the Westminster/Civil service consensus is wrong on many of the major issues that face the Country.

Interestingly, the media have yet to cotton on. Swayed by their Westminster lunches and connections they see small divisions where there are none. They allow the manufactured differences to be perpetuated.

It's a sad state of affairs but I doubt the next election will see the real sea change, not enough people will have braved the change away from their tribal loyalties to recognise the problems. Perhaps the one after that when serious events will have concentrated minds somewhat more.