Are we heading into a major recession?

[bodychanges]

Things are already tough in my industry - I’m a contractor and this past year is my worst in over two decades - but should I be expecting things to get worse not better?

and I sound stupid, but what are the main economic indicators?

@SerendipityJane
It may be wrong and economically illiterate.
However it is what UK (and indeed US) economies are based on.

Again, wrong. UK - mostly yes. Masses of low productive people and a very high number of economically inactive.

US - they are a power house because they attract (even if smallish) number of ultra productive individuals and business who in turn can feed unproductive masses (to certain extend).

Investing in infra and education - yes absolutely, big time. But for this to happen you need to make it attractive to invest in UK. You can't pay for this all through taxes. And you need to ensure that people who chose to be unproductive are disinsetivised to do so. This is all achieved by reduction of taxes, removal of cliff edges which force high earners to reduce their hours etc etc. Increase individual allowance from 12.5k to something substantially higher and make benefits time limited full stop. Ideally link benefits to previous earnings.
Education - very controversial, but what about giving £3.5k to people who chose to educate privately? instead of applying VAT? if it is believed that private schools deliver educational benefits, why not to make them accessible to more people? of course not everyone can still make it, but you give half of what you spend on state school per pupil per year, you still save money but more people get this presumably better education and you relief pressure on state schools? But no, this would be unfair. Nordics do this by the way.

Far, far too sensible @nearlylovemyusername , so it won't happen. I think we should encourage people to have health insurance by making their personal (not employer) premium payments tax deductible, and to issue a voucher worth £x,000 pa per capita for primary and secondary education, which can be spent anywhere deemed adequate by OFSTED, but which crucially can be topped up fairly inexpensively for more specialist provision, of whatever type is required. It wouldn't stop elite schools existing, but it might help reinvigorate the small town independent day schools that used to exist in much larger numbers.

Absolutely agree. Growth can come from govt spending but what actually helps people is having a job NOW, that pays pretty well, and having goods and services that don’t take up that entire pay cheque. This amorphous “growth” that they talk of, coming from “infrastructure projects” at some point in the far future, may create “growth” but who does it actually benefit? Big business, investors etc. Yes some workers but when?

We run a business and the effect of the recent tax changes means that most of our suppliers have increased prices. We will also do this, and we sell B2B so they will then increase their prices to the end customer. We also are looking to cut costs if we can, to pay for the tax rises. We will probably lay off two of our underperforming staff who we have carried for the time being. The business can no longer afford to have any fat.

If we are typical (and I believe we are - apart from the fact that our product is not a discretionary spend business, which I believe will be hit even harder) then we are laying off staff and slightly rising prices.

I also believe that spending cuts are on their way by the govt too, this has been widely reported.

@Ozgirl76

You're typical, or rather your response to Labour budget is absolutely typical, every single business I know of is doing the same. Retail, which is largest in terms of number of people employed, is preparing mass redundancies.
What's annoying - this was so predictable even without any economic credentials.

Some countries do similar but our electorate have voted for the opposite. We're just too opposed to using tax in such a way.

Yes the government are using
private Capital landlords) to support the social housing needs as this is cheaper in the short term but again a failure to invest in the future.
Unfortunately the policy of modern governments seems to be ‘we’ll kick the can down the road and bury our heads in the sand’

Sadly @juggleit, I think government have two options in the absence of willingness to build housing: rely on landlords to deliver housing they don't fund building so BTL, and pay rent subsidies, or stick their fingers in their ears, sing lalala and pretend there are no problems. But going back a few posts, why do we need so much more housing if the birthrate is declining?

@Papyrophile Because we haven’t housed who is here and immigration means the population is growing.

And also because while the birth rate is declining we have not yet, really, hit the ‘more die than are born/enter’ point. The increase in world population is not due to births - they levelled out a long time ago. People who say there should be limits on babies don’t understand the numbers. It’s longevity that’s causing it.

The increase in world population is not due to births - they levelled out a long time ago. People who say there should be limits on babies don’t understand the numbers. It’s longevity that’s causing it.

Thank you, why do so many not get this!

I thought we'd started to decline on living age

In any case it's not hard to see the increase in population over the last few decades

"The ONS expects natural change to turn negative in the mid-2030s, with the number of deaths exceeding the number of births each year. At this point, only migration will be causing the population to grow, as shown in chart 2."

Not yet

www.theguardian.com/society/2024/jan/11/uk-life-expectancy-falls-to-lowest-level-in-a-decade

I must have recalled this

We're close then either way. If we don't want to keep building houses we know where to look

Well some of us would happily bump ourselves off rather than live longer but in poor health. Government not going help there though.

Yes, just cull everyone over a certain age, bring in 100% IHT and it’s job done.

Our buisness should be spending roughly 350k on replacement machinery costs this year. DH made the decision to keep old plant going another year after the budget.

Two of the companies we do work for went into administration last week.

BIL’s employer is making noises about halving their workforce, so that’ll be 250 redundancies. So, yeah, everything seems pretty miserable and I wouldn't be at all surprised if we are in an official recession very soon.

Sounds familiar.
I don't think those who work in the public sector, (or retired from it) understand what's going on out there. The job losses will be huge! I hope things improve for you and your BIL's employer.

I'm so curious to know how many of those who are "surprised" now voted Labour.

This was so obvious in June, yet there are some surprised ones.

💯 this is a clear reflection of where we stand as a business too. Everyone in our sector has been quiet since October with companies failing all around is. We are struggling daily.

Who would have thought an 'economist' with '10 years experience at the BofE' could get things so wrong eh?

@TheNuthatch
The issue is not RR herself, as rubbish as she is. It's the entire party ideology and she's just a face of it. They do believe that despite current world set up and UK level of taxation they still can achieve something by redistribution.

It's very fundamental. Even if RR goes today, her replacement will have the same views and will screw in the same way. It's the dead end.

Yes, spot on. It's a car crash with no end in sight. If Reeves goes, any credibility Starmer has left will go with her, and I cant see them changing course on the budget.

Yes, just cull everyone over a certain age, bring in 100% IHT and it’s job done.

Economically we would be in a very strong position if we did this, morally I'm not sure. Can't see voters going for this though, particularly as so many are over the culling age!

Also seeing this. Family have a fair bit of commercial property. 3 out of 10 tenants have gone bust in the last 2 months. Hadn’t had one for 10 years before that.

@wipeywipe
ah, your view on IHT again.

No, we wouldn't be in a much stronger position. Because anyone who's hard worker /has some wealth and is below culling age would quickly escape with their families. Leaving those coasters who expect someone else to contribute. It's happening now on a big enough scale, but there would be mass exodus the same day. And you know what? despite not being in EU, other countries would open their doors to this cohort gladly. Leaving all state dependants on this island.