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So do we all think there is a recession on the way or are you still hopeful we'll avoid one?

(128 Posts)
Callisto Thu 10-Jul-08 08:36:42

Barratt housing have announced this morning that they are expecting to lay off 1200 workers having experienced a near 50% drop in house sales recently. Bovis and Redrow have also laid people off. The City is, allegedly, laying people off too. So with unemployment on the rise (I've heard 2 million will become unemployed in the next couple of years), manufacturing shrinking for the last two months, inflation running at around 9.5% and no end in sight to high oil prices, is there any way at all we can avoid a recession? And do any of you think that the Govt can do anything to prevent it?

hertsnessex Thu 10-Jul-08 08:40:52

i don't think we can avoid it. we are already taking measures to cut back. have been a bit more careful with our spending even though we are still bringing in the same £££ - and dh's job is v safe (as is possible) i think if we all slow down on spending now it will help.

don't think the govt can do alot, i know GB said he wants to cut oil prices and food prices - but think that is just a last ditch attempt for election.

lets hope its not as bad as the one in the 80's. my parents mortgage payments tripled - luckily they could meet them - but we know lots of ppl that couldnt.

noddyholder Thu 10-Jul-08 09:00:19

I think its inevitable too.Now it is a case of damage limitation and being prepaerd.Many industries say we are already in recession because although we haven't had 2 quarters of -ve growth yet (official definition)the speed of this decline has been shocking for them.Govt powerless imho Interest rates should never have been so low it just encouraged people into debt and to live an unrealistic lifestyle in relation to their salaries.I think house prices will be the least of our worries once jobs start being affected

Freckle Thu 10-Jul-08 09:06:39

I think it's inevitable, not least because the media is talking us into one. There are companies round here which have already opted to go to a 4 day week rather than force redundancies, but that leaves people facing rising prices and diminishing salaries.

claricebeansmum Thu 10-Jul-08 09:07:41

I don't know if we will go into a full blown recession - two quarters of negative growth but we are in for a rocky time. IME the construction industry is always the first to suffer in this sitution.

noddyholder Thu 10-Jul-08 09:20:57

House prices fell 2% again in June which is traditionally one of the best months and prices are now 6% down on this time last year.Forecast is to be in double figures by xmas and approx 17%down by then shock.

Callisto Thu 10-Jul-08 09:24:47

I actually don't believe the 'talking ourselves into a recession' theory. Oil prices are mainly to blame for our current situation, although I am not excusing the fact that our national debt is vast and housing prices became unsustainable long ago. It does seem to have happened incredibly fast, but I'm sure that the signs were there for those that wanted to see them at least a year ago and probably longer.

The things I find most worrying are the shrinking of manufacturing output for the last two months and current signs that the service industry is beginning to follow suit. The problem with a service-based economy is that once people lose confidence and stop spending the economy grinds to a halt.

Callisto Thu 10-Jul-08 09:27:44

A couple of months ago I didn't think that houses would lose much value, simply because there is a housing shortage in the UK. I'm beginning to change my mind now.

Page62 Thu 10-Jul-08 09:30:10

no doubt in my mind we're heading for a recession.
job losses are now accelerating (and city jobs included in that too), price increases (food, fuel etc) are now hitting the average family, housing sector will see a massive correction (in London, only £5m+ houses seem to be immune).
don't be tempted to buy any shares yet, knuckle down (? is that the right phrase), keep anything you have in high yield savings and perhaps have another look around (shares and/or property) mid next year. Defer any major spending you can as in a few months, suppliers will be competing hard for your business.

noddyholder Thu 10-Jul-08 09:31:01

i agree the talking ourself into it is not the case here.All the factors are in place for a recession with oil at the top.Manufacturing is really suffering and 455 of co's have plans to increase prices so interest rates should rise.House prices aer set to plummet now.2% falls in peak selling season is unheard of.

noddyholder Thu 10-Jul-08 09:31:42

45%

dinny Thu 10-Jul-08 09:32:08

we are IN recession

jimjamshaslefttheyurt Thu 10-Jul-08 09:34:39

It's all the redundancies that are going to have an effect. The place I work is laying off people, ditto where dh works (we're both as safe as anyone can be - but I know families where both adults have been threatened with redundancy - and of course there's no jobs out there to apply for).

The interest rates etc can be managed to some extent by cutting back (although I'm shocked at how fast fuel and food prices are rising)- but not if you lose your income as well. Having said that if interest rates go sky high we will have to cut back considerably to pay for the mortgage- and we were able to buy our house before the prices went crazy so our mortgage isn't stupid.

This feels worse to me than the last recession- I don't know if that's because then I was single, just leaving university etc and a bit clueless or whether this really is worse.

noddyholder Thu 10-Jul-08 09:35:21

dinny i wanted to say that but was trying not to

LaDiDaDi Thu 10-Jul-08 09:35:36

I think that we will end up in a recession which will be really pretty nasty.

I'm lucky in that my job is pretty well secure but dp works in car sales and has a very comission based salary so he has really noticed a fall in sales over the past month or so.

noddyholder Thu 10-Jul-08 09:37:26

Most economists agree this will be a lot worse than last time as the debt bubble has been huge and many people are out of their depth.The growth and prosperity the givt keep banging on about was debt and nothing else The high street spending boom was not based on better wages or people saving it was credit cards and remortgaging,

jimjamshaslefttheyurt Thu 10-Jul-08 09:39:20

Yes I can see that noddy. Whose to blame for that? (I am very ignorant about economics). Is it the banks? I am shocked at how much they've offered to lend us in the past. Or was it encouraged by Labour, or even the tories before them?

jimjamshaslefttheyurt Thu 10-Jul-08 09:39:35

er Who's

Callisto Thu 10-Jul-08 09:42:14

We sing from the same sheet Noddy. Personal debt is huge now and wages have actually shrunk in real terms (taxes have risen more than earnings over the last 10 years, thanks Gordon). I was reading yesterday in the Torygraph that more and more people are paying bills with their credit cards. That is not a good situation to be in right now.

dinny Thu 10-Jul-08 09:43:17

Labour inherited v good coffers from Tories, they have spent and spent and spent and encouraged everyone else to do the same - even now the want banks to start lending again, rather than admitting the reality of the prob, which is that there has to be a point where you pay back what you have borrowed

dinny Thu 10-Jul-08 09:43:52

think we are going to be asked to strike by our union soon as our pay rise offer is is 2%!!!!!

Callisto Thu 10-Jul-08 09:45:25

I think (a la DC) that we have to take a little bit of personal responsibility here, although I would love to lay the whole blame at the door of Gordon Brown. Borrowing far more than you can pay back is barmy, especially at the top of the market. I know that banks were practically forcing us all to take on more credit cards and loans but we were the ones who signed on the dotted line. Having said that, the reasons for this recession are many and varied and personal debt is one small part of it.

dinny Thu 10-Jul-08 09:46:53

I do agree with that, Callisto, many people have borrowed with such abandon

jimjamshaslefttheyurt Thu 10-Jul-08 09:51:02

We have too much debt (mainly spent to fund therapies and equipment for ds1 tbh rather than luxuries) but I am pleased we didn't take on everything we were offered.

noddyholder Thu 10-Jul-08 09:54:36

I think people have ben living like pop stars fuelled on by crappy shows like pop idol and big brother where average joes with no brains live an unrealistic lifestyle based on nothing at all.Joe public sees this and wants a bit of the sam,e but without any hard work.years ago big cars and flash holidays etc where the rewards for either hard work or family money now everyone wants it.It had to end and I for one am pleased.Not that recession looms but that we may see a return to different values where young people aren't out attacking each other for mobile phones and games consoloes because they don't feel they are good enough without

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