Vote totals:
Yes:
0%
No:
0%
Neutral:
0%
DEBATE: IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
official figures on economic growth keep getting worse
Each month predictions made by official bodies about percentage growth are overestimated. The OECD’s latest figures suggest that overall economic growth for 2008 will be 1.2%. This is much smaller than the estimated 1.8% growth made in July(1)
(1)Steve Schifferes (2008) ‘UK recession this year, OECD says’[online] available; http://news.bbc.co.uk/1/hi/business/7592660.stm
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
the majority of the electorate seem to have no faith in the government
The Labour party is losing by-elections left, right and centre in constituencies that were once their strongholds. This is not a promising sign for the existing government for the next general election. Heavy criticisms of the government and the economy, once Gordon Brown’s showpiece, do not paint a rosy picture. It does not seem that Labour will have the chance of correcting the economy promptly because even ‘David Cameron and George Osborne have an "implementation team" preparing for the early months of a Conservative government’(2) . The point is that negativity breeds bad results. If the electorate has no faith of those currently in charge then the present government will have to work that much harder to earn the electorate’s trust.
(2)Robert Chote (2008) ‘Economic downturn means the next government may have to increase taxes’ [online] available; http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/06/ccliam106.xml
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
the economic downturn in the UK is not isolated, the rest of Europe has also been affected
Britain relies on Europe for 50% of its exports(3). However with Germany, France and Italy’s economies also suffering this will result in fewer exports and will increase the problems with the UK’s economy. It is not just a relatively small case of the UK regaining its growth but also Europe needs to regain its own growth.
Steve Schifferes (2008) ‘UK recession this year, OECD says’[online] available; http://news.bbc.co.uk/1/hi/business/7592660.stm
(3)Steve Schifferes (2008) ‘UK recession this year, OECD says’[online] available; http://news.bbc.co.uk/1/hi/business/7592660.stm
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
income in real terms continues to decrease
Increasing prices of bills, oil and food prices teamed with fixed wages has resulted consumers having less money to spend and less money entering the economy. This summer ‘46% of retailers reported a fall in sales (4) This is not going to benefit the economy and there does not seem to be any indication of a fall in the cost of commodities.
(4)2008) ‘UK shops have “summer to forget”’ [online] available; http://news.bbc.co.uk/1/hi/business/7586270.stm
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
Darling backtracked
Alastair Darling had to correct his claim that the downturn was worse than previously thought, by stating that the “fundamentals” of the economy were still stable.
http://www.istockanalyst.com/article/viewiStockNews+articleid_2565515.html
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
Government assistance
House prices have been rising rapidly before this credit crunch. So much so that most small houses, and even flats, cost more than £175,000. In fact, before the credit crunch, houses worth under £150,000 were exempt from stamp duty. So will this £25,000 help Britain’s floundering market? I very much doubt it. Especially when the average house price in Britain is £219,262 (1)
http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm
This morning, the prime minister is announced plans to help revive the floundering house market. Houses costing less than £175,000 will be exempt from stamp duty (land tax, paid when buying, 1% of the house-price), saving the buyers up to £1,750. Buyers of more expensive homes remain unaffected by this. The PM’s plans also involve help for families in danger of having their homes repossessed, help for first-time buyers, and more council homes.
http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article4659032.ece
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
earlier predictions have proved to be wrong so this gives little validation to current predictions
Last August it was thought slight falls in growth would be short-lived. Now it seems poor growth or lack of it is here to stay. This suggests that the downturn may be even worse than predicted.
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
consumer awareness of the economic position will result in more people being careful with their money
There has been a trend for people to shop at cheaper supermarkets in a bid to watch their purse strings. As a result larger, more expensive supermarkets are missing out. This may spur them to drop prices and then consumers’ could slacken their purse strings and extra spending could help to reinvigorate the economy slowly.
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
media involvement has heightened the panic
The problems with the economy must be taken into context and not blown out of proportion. Unemployment levels are not the lowest and interest rates are not the highest.
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
the downturn is part of a continuing economic pattern, the situation will get better
Like other patterns in history, the economy experiences fluctuations too. At the moment it is at the bottom but it will grow again. The down turn is temporary, inevitable and was to be expected. After many years of economic growth a slump is almost obligatory.
IS THE ECONOMIC DOWNTURN IN THE UK GOING TO BE AS BAD AS SUGGESTED?
a fall in value of the euro due to the downturn is not necessarily a bad thing
A fall in the value of the pound sterling against the euro should help the UK in the competitive export market. Making British exports more favourable and thus remove an influential factor of the downfall. Thus the “bad” effects of the downturn may be a blessing in disguise and will help the situation get better.
