Are we headed for a recession?

[Whathastheworldbecome]

Boris has pledged another 5 billion to put into infrastructure/ building projects so that we don’t end up like the 1930s Great Depression.

I don’t understand how borrowing more money doesn’t undermine the economy further?

There seems to be little talk of any recession at the minute and the housing market seems to be holding up

[hashtagbollocks]

Really?
You've not heard any mention of a recession?
Really?

[ohthegoats]

Erm...

It's going to be a fucking catastrophic cliff edge depression. World wide.

[Whathastheworldbecome]

I mean on the news

I’ve just goggled recession in the uk and the last article I can find mentioning recession was over a week ago

[SummerHouse]

Are we heading for a recession? Yes.

[Scrumpyjacks]

Of course we are. You can't shut the country down for 3 months and expect it to all be fine and dandy. Thankfully, The whole world will be in the same situation which will soften the blow slightly In comparison to a recession localised to just the UK for example.
I'm currently greatful I work in a sector which tends to soar during recessions due to people needing money any way they can get it.

[Eyewhisker]

We are in the worst recession in hundreds of years!!!!! The impact is cushioned at the moment due to government subsidy/furlough but this will start being wound-down in August. I support the government support but the economic impact is beyond catastrophic and will blight many lives, particularly those of young adults.

[ListeningQuietly]

Capital projects just make rich companies richer.

Schools need more day to day money for teachers.

Hospitals need more day to day money for nurses

Councils need more day to day money for social workers

Care homes need more day to day money for staff pay

but that does not make Tory donors rich
so it won't happen

[joystir59]

Tories will claim it so they can impose even more punitive fiscal measures on us.

[Sirius99]

Unfortunately yes, probably a very deep recession, we never really came out of the financial crash, Interest rates can’t go any lower, like in previous recession, unemployment will probably rise to levels not seen since the eighties,
The government will try to pump more money into the system, but the resources are limited, then there is a no deal Brexit in the new year, but at least that in GDP figures will only now seen as a hiccup compared to Covid-19

[Sirius99]

ListeningQuietly Will where the money come from? It’s only a pot that is already empty and we are now borrowing from other people’s pots

[Chessie678]

Yes. We are likely looking at millions of jobs lost once government support runs out particularly in hospitality and retail but also in any industry which depends on them. I work for a law firm which will either make redundancies or cut people’s hours for example. The economist has had some good articles on this but it isn’t being covered very well in the mainstream media. The thinking is that the pandemic will accelerate a trend towards automation which was already happening. It will be worth businesses investing in automation now because they can’t rely on staff at the moment. If that happens lots of job losses will be permanent even if the impacted sectors recover. Of course many businesses will also cease trading particularly if there are repeated lockdowns and consumer spending will fall due to restricted incomes and / or economic uncertainty. This will happen at a time when public finances are constrained by the massive spending programme put in place to deal with covid.
One way to deal with increased automation might have been a universal basic income but that’s going to be really difficult to fund right now (apart from various other issues with it).

I think it’s right to spend our way out of this as Boris is suggesting rather than go for an austerity approach. The money is being borrowed cheaply and spending will create jobs and mean more money is circulating in the economy. Obviously there is a limit on what we can borrow and spend though.

I always thought that alongside the medical experts brought out at the briefings there should have been economic experts talking about the damage being done to society by the lockdown.

I actually think that so far the government have done fairly well on the economy. The furlough scheme is much better than the support package in the us for example. I don’t see how any government could avoid a huge recession now though.

[IndianaJonesAndTheTempleOfBoom]

Scrumpyjacks
Ooooh what industry is that? Is it a nice job?
PM me, hun!
(I'm only half joking - my industry is fucked).

[IndianaJonesAndTheTempleOfBoom]

Also laughing at the innocent 'are we heading for a recession?'
And by laughing I mean weeping.

[ListeningQuietly]

Will where the money come from? It’s only a pot that is already empty and we are now borrowing from other people’s pots
They are printing it
had you not noticed?
Its been going on for months already

[Sirius99]

ListeningQuietly It will have to be paid back over the generations

[Sirius99]

ListeningQuietly Are you suggesting we just carry on printing for ever and not worry about the consequences?

[ListeningQuietly]

It will have to be paid back over the generations
probably not
they will just print more

anyway, money spent on wages turns into money circulating in the economy
the furlough scheme

money spent on capital project white elephants ends up in offshore tax havens
PFI and Mapely steps

[Kazzyhoward]

@ListeningQuietly

Capital projects just make rich companies richer.

Schools need more day to day money for teachers.

Hospitals need more day to day money for nurses

Councils need more day to day money for social workers

Care homes need more day to day money for staff pay

but that does not make Tory donors rich
so it won't happen

We need more staff, not pay the existing staff more.

We need to spend on training, recruitment, etc to increase the numbers.

If there are more people working, the workload of existing staff will ease, and thus the jobs may be more attractive, with fewer people leaving. (Although with the state of the economy, few people will leave anyway as there are no other jobs to move to!).

[kirinm]

We aren't heading for one. We are in one. Even the story chancellor has said that out loud.

[ListeningQuietly]

Are you suggesting we just carry on printing for ever and not worry about the consequences?
Its what Japan has been doing for 30 years and it does not seem to hurt them

Actually no, tax rates in the UK and the other low tax economies need to rise significantly

• back to what they were under Thatcher

but that would not make Tory Donors rich

[wheresmymojo]

As per PP.

It's being talked about A LOT in certain parts of the media - the Economist, the Financial Times, etc.

I think the mainstream media haven't been saying as much...but we are already in a (very fucking deep) recession which the figures will confirm when released.

It's going to be a very unhappy time for many. Redundancies have started but are just the tip of the iceberg at the moment - there are about to be a lot more over the second half of the year.

The forecasts are that 1 in 10 people will be unemployed like the 1970s.

However unlike the 1970s the average person has a lot more debt these days so will more easily become bankrupt.

Plus there's no social housing available when people lose their homes so I predict a lot of people having to live in multi-generational homes (and lots more homelessness).

[Kazzyhoward]

anyway, money spent on wages turns into money circulating in the economy

Not if it ends up going abroad when people spend it on importing goods, or where it's paid to immigrant workers who send most of it back to their homeland.

That philosophy only works if it's paid to locals who spend it locally on goods produced locally (in this country), or local service providers.

We already have a huge balance of payments deficit and just putting more money randomly in people's pockets will make that even worse.

[Kazzyhoward]

Actually no, tax rates in the UK and the other low tax economies need to rise significantly

I don't think the lower paid who've benefitted enormously from the reductions in basic rate tax and increases in the tax free allowance would agree with you.

[ListeningQuietly]

I don't think the lower paid who've benefitted enormously from the reductions in basic rate tax and increases in the tax free allowance would agree with you.
47% of UK adults do not pay tax
so what would they care if the rate went up to 26% again

and if people do not want to pay tax
then they should not expect services

[KaronAVyrus]

We are in a recession but heading for a depression. There’s no way around it when you shut down half of the economy.