Are we heading into a major recession?

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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?

Reduce corporation tax - see Ireland GDP.
The UK has very hostile policies towards business.
They delivered the budget back to front. Growth first always.
The current government are products of the Whitehall bureaucratic machine and have zero idea of how to make money through private investment.

Yes, exactly — this is what should happen. (Though the bank’s confidence in lending isn’t just about your ability to pay it back but about their own confidence in the direction of interest rate and the credit markets: the financial crash was caused amongst other things by the fact that the banks no longer cared if you could pay it back because they thought they could defray the risk with credit securitisation.)

Once a market starts falling banks tighten credit. “Pent-up demand” only happens if banks suddenly loosen credit again. If they don’t, it doesn’t matter how much you want to buy if you can’t get a mortgage. In purely numerical terms, building more affordable houses will just accelerate the price falls that will happen anyway, because the housing crisis is essentially not one of not enough houses, but one in which some people “over-consume” housing at the expense of others. Think of Auntie Mildred who’s rattling around in her five-bedroom house whilst the young family down the street live in a two-bed flat.

Now ideally we would solve the housing overvaluation issue with sensible policies, as you suggest above. But are those actually going to happen? You’d require government backing to offset the risks enough for the banks. And voters will all vote against because they don’t like the idea of their house prices falling no matter how economically sensible it might be!

You are correct people will vote for those most likely to protect their wealth. But as we are seeing, the haves are becoming a smaller and smaller group, with the have nots getting larger. At some point hopefully those without will vote in a government for their needs.

But looking at it from a banks point of view.
I borrow £120k over 25 years for a mortgage on an affordable home but at a high rate of 10%. I pay back in interest above my purchase price just over £200k. The bank knows that is managable and likely to be paid back. Monthly repayment £1090.
Or
I borrow at todays prices £320k over 25 years but at 5%, What I pay back above the initial price is £241k. But the bank knows I am stretching myself and if something goes wrong I may default. Monthly repayment £1870.

I'm using a £30k deposit in both calculations.

If you were looking at that purely as a risk v return point of view. I'd imagine most would choose the first.

So again the only people gaining any great benefit are those sitting on multiple properties, valued way over what they are truly worth.

@WhitegreeNcandle
we are currently recruiting for well paid manual jobs with career progression. The time wasters are staggering- it’s very apparent they come for interviews to fulfil their obligations to look for work. They know exactly what to say to not get selected. I will be contacting my local Job centre to put forward my ideas to stop this pathetic behaviour. Employers need to feed back to the Job centres so their clients can be sanctioned.
if we cannot recruit for these jobs then that obviously leads to less growth- recession is looming.

What also needs to happen is a seismic shift in what we consider higher paid jobs. We have a lack of workers in a number of manual positions, hospitality and care industry especially. Paying just above minimum wage doesn't cut it in comparison to role demands.

Perhaps we all must accept that cleaning and caring for elderly people or dealing with the public in service situations etc must be higher paid, in comparison to more office based jobs which can often be semi automated with modern technology.

Completely agree with this. I’d love to be able to pay our staff more. Quite a lot more. Mumsnet normally shouts me down saying that my business isn’t viable if I can’t pay a decent wage. Thing is, the price we pay is based on what supermarkets pay us which is based on consumer appetite. Every tiny decision we make about how we live our life has impact on the rest of society.

We need a seismic shift in what jobs are respected and valued.

@juggleit its so frustrating isn’t it. We had one chap recently who said his car broke down so he couldn’t get to work. He lived very close to existing staff so we ordered to arrange transport whilst he got it fixed. Never heard from the chap again.

I was thinking that about this type of post on every thread from Labour

Do you swerve all news and economic analysis?

Someone mentioned universities. Its about time this sector has a light shone on it. The VC salaries are obscene. I have just over the last 3 years had two children go to university. One to Exeter and another to a northern university. Just look up the salaries for the average VC. One son did his degree during Covid. The lecturers made a run for it as soon as they could. The then went on strike and worked to rule. Old lectures were just posted online for the students to watch. A group of students made some attempt to get back some of the fees due to the appalling standard of teaching but lacked the expereince to take it very far.

We also need to review the students attending courses from abroad where it seems a number overstay their visa and make the immirgation issue we are currently suffering from much worse. The greedy universities dont want to give up the higher International fees. After all - who would pay their salaries??

You sound very smug and privileged. Meanwhile, over 20 people at my work are being made redundant due to increased costs because of Labour budget and fewer customers because of shrinking economy.

But the economy grew

https://www.bbc.co.uk/news/live/c4gx50z4527t

And if you want to talk about job losses can we discuss Brexit. None of you Tories gave a shit when many many people lost jobs and continue to do so as whole companies moved out of the uk.

@Ma11ard the private sector is shrinking and jobs are going. Are you happy Labour is causing that?

Are you happy with what the Tories did the last 14 years making tough decisions and measures necessary?

Who thinks that increasing NI for employers will start growth??

Answer = Reeves

It wasn’t just Tory supporters that voted Brexit though was it?!? You can thank vast sections of society from both ends of the political spectrum for that.

It has also been acknowledged on this thread that Brexit was a disaster. But does that give Labour a free pass to also introduce ill thought through, stifling policies that also cause huge economic harm. Is being shit okay just because it’s labour? How depressing.

Big business like tesco etc are terrible for the way they treat suppliers and staff alike.

If you look a little closer, the economy grew only because of a slight recovery in manufacturing and services. This growth could also very easily be revised down at a later date.
GDP per person has actually fallen for the second consecutive quarter.

From the other side of the brexit coin, how many UK workers found their wages stagnate or struggled to enter many industries due to cheap migrant labour.

I don't think looked at objectively the UK is worse off than other European countries such as Germany or France. Long term whether brexit was best or not, I genuinely cannot say and nor can anyone else.

@Ma11ard the BoE recently halved growth projection and increased inflation getting us closer to stagflation

This is due to Labour's policies. Why is that good exactly?

We should all be angry with this government, however you vote.

When the US sneezes, the world catches a cold. The new President is working hard to tickle the Statue of Liberty's nose.

So it's the wrong sort of growth ?

Didn't you work for British Rail once ?

So it's the wrong sort of growth ?

Is 0.1 what Labour are after? I thought they wanted 'fastest growing in G7'

They took 0.7 first quarter 2024 and reduced it to near zero.

Is that what you and they had in mind?

FFS. There are none so blind ...

Who would pay your child's tuition fees come to that? You know - the actual cost incurred, not just the part of it he pays.

It's just that it's hard to remember the last 14 years under the Tories and then think that Labour are the source of all our troubles. Most people's brains can't manage that sort of mental gymnastics.

Or maybe you're one of the lucky few who did well under the previous government, in which case sorry your snout has been displaced from the trough.