to think the current economic crisis is far from over

[Litchick]

I know that the Bank of England announced we were back in growth, but when I look around me things still seem pretty dire.

Two shops in my local town have shut down in the last month.
A friend recently closed her internet business.
The industires I know most about are in melt down. Publishers are ridding themselves of staff and taking on very few debut authors. DH tells me the city is dead and the start of 2010 has been the worst he can remember.

Do we really think there's going to be a turn around soon? Or are we in for a long hard slog?

I think long hard slog.

Once interest rates start to rise there'll be a whole load of repossessions as well.

Long slog I think TBH

i may be alone but to me things has been dire for most of my adult life. still seem to be earning not that much more than i was 20 years ago. dp still works in an industry that has to strike every now and again to get basic working rights and the rich don't seem to be getting poorer, so it's just usual to us.

I can't say where DH works, but it is a very big company and they are making loads of people redundant over the next year. They do it in small blocks each month. If they did it in one go it would be national news. I work in HE and could be made redundant soon, so I think we could both be out of work by the end of the year.

I suspect lots of people are in the same position, and there are public sector cuts coming, aren't there?

Yes I worry about a rise in interest rates. I'm assuming that much of the current spending is being done by poeple feeling flush due to decreased mortgage payments.
If that goes, many more businesses will fail.

How likely is a rise?

Long, hard slog to be sure. I hope that the country uses this downturn as the time to change all of the things that put us here. The 'boom' that caused this bust was unsustainable IME and everything needs to be rationalised. The best we can all do is be sensible with our choices according to our means and slog on through.

Once the Election is over I'd be fairly certain that interest rates will start to rise - I just hope not too high, for the sake of our mortgage.

The bubble bursting had been on the cards for a long time and, personally, I think Labour's attitude of chucking more money at the problem is making things worse.

Well that's another thing, Milly.

If we have to call in the IMF won't they insist on massive cuts in public spending?

Again, does anyone know how likely that is?

I'm no economist, you've guessed.

Dh (City lawyer) experienced a mini boom in business at the end of last year and start of this (although all from overseas clients, nothing in this country), but says everything has suddenly stopped dead.

DH is the same. Overseas work in the middle east coming through, but bugger all else.

He says the property department is like the Marie Celeste. Ditto M&A.

It's not over. It's not been right for a long time.

The only people I know who are doing well in law right now (admittedly in the US), are in divorce and bankrupcy.

I think Cavemum has hit the nail on the head. They are trying to keep us cheerful in the run-up to the election. How can you call a growth of 0.3% "the end of the recession"?
Didn't they just announce the trade deficit in January was at its worst since Aug 08, with exports at the lowest for three years.

All the estimations I have heard is interest rates staying as are until prob towards the end of the year. We'll see...

Thak God, Mrs C.
When that spare cash is gone from the economy we will be in deep shit.

Well, there has been talk of a "w-shaped" recovery, so there's a dip, it looks up for a bit and everyone's relieved, but then it hits again. I think that's pretty likely.

I think it will be a while yet before things start getting back to "normal", and I think it will be a while before employment rates pick up.

I do hope I'm right! We're on a good tracker on our house but my flat (rented out) is on a variable. It has a fair way to go before it reaches the rate of rent and good long-term tenants, but I am a bit nervous and am waiting for the best time to fix again. Am hoping our IFA is on the ball! TBH I might sell in the next year or so, I won't have lost anything on it and I don't want the worry indefinitely.

I think Abs' theory sounds reasonable. I think we will prob have a few more fluctuations before we steady up. I can't see the powers that be putting interest rates up yet, not while there is still so much unemployment etc...the breadline balance is still so fine for many they'd be running a massive risk.

Its going to be a long hard slog and it terrifies me!

DH works in Finance. He has been made redundant twice in the last 2 years (though I realise he has been fortunate to get a new job each time). We have used up all our savings and if interest rates rise we wont be able to afford our mortgage.

I think that it has taken us 10 yrs to get in this mess so it seems reasonable to assume that it will take 10 yrs to fully recover.

Does anyone really not know that we are in deep shit? We are going to be paying for years to try and draw down the debt we are in.
We are close to losing our international rating so are getting close to Greece in the shit creek stakes.

The next government is going to have to cut the crap out of everything. The current governement is just hoping it is notthem and then they can blame the next govt for cutting jobs and services. But the truth is cuts to jobs and services are coming for a long time.

Our children will be paying off the credit card we used to pay off the banks debt...

There are very interesting insights into what is happening in the 'real economy' on this thread.

I agree with a lot what has been said. New shops closing down every week in our town and I would say 20 - 25% are vacant. I personally know 3 people that have been made redundant snce Xmas in different industries.

My BIL is a truck driver. He had a bit of a pick up before Xmas but now nothing. If he can get work it is tending to minimum wage and at weekend only.

The property market is still in a dire state and banks are really unwilling to lend against property without a big deposit.

I spent a good part of yesterday looking at some companies I thought about investing in and found 3 out of the 10 I looked at are technically bankrupt and just being kept on life support by the banks. These are companies currently listed on the London Stock Exchange. Many small and medium sized companies are really on the edge.

Outside London the housing market has definitley started turing down again and very few are selling. Prices will have to fall to find a buyer.

I volunteer at a credit union as a loan officer and see a lot of people with credit card debts, unsecured debts and doorstep loans. I used to just see people on benefits and low wages but in the last few months I have seen a lot more 'middle class' comfortably off people in serious financial difficulty.

If interest rates rise, many people will struggle to pay mortgages and repossessions will rise. Bank will suffer a second round of huge losses and ome may well fail. The Bank of England may have to raise rates to defend the pound from collapsing even further. That collapse in the exchange rate has made foreign holidays all our imported goods very expensive and our balance of trade collapsed last month as a result.

Have friends in the City saying very similar things to what Litchick/MrsJohnDeere DHs are saying. Suddenly gone very quiet. The stock market is going nowhere and deals are being cancelled.

The small 0.3% rise in GDP is shockingly low after the massive amount of money pumped into the economy by Govt/BoE. That kind of stimulus cannot be repeated and now we are expecting savage public spending cuts. That inevitably will push us back into a double dip recession if not a Depression as Govts around the world are forced to cut spending.

As far as the housing market goes, are we not still at 'deadlock', with buyers unable or unwilling to pay sky high prices, and sellers unwilling to drop asking prices?

The thing is, house prices have rocketed in the last 20 years, to insane levels of unaffordability. But the downturn has only produced a meagre drop in selling prices. If prices were to go back to levels of say, 10 years ago, they'd have to drop by 50%.

If houses are costing ten times the average salary then a huge correction is desperately needed.

Abs - do you not think we'll need to totally redefine "normal"? We spent years living on credit, refusing to wait for anything, borrowing ridiculous sums to spend on houses - it was hardly 'normal', was it?

In many ways I hope we never get back to that way of life, and that this belt-tightening period gives us an opportunity to sort ourselves out in the longterm.

January and February were disastrous for us. Nobody died. We are in the 'transportation of the dearly departed' business. I kid you not.

I also think that people don't realise that all of the snow has massivley effected things even more- I know lots of roofers/ builders/ shops going out of buisness