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 thank you ER We have more in common with Japan and greece than the papers and politicians dare to admit.The agent selling our house rang me yesterday and he was saying the mini boom has fizzled out and that he is getting a lot of valuation requests for flats which are some people BTL investment that they are offloading.He says this is EXACTLY what happened last time.Over xmas the bulk of house sales/purchases were going to completion after about 2 rocky years.Already this last fortnight several locally have fallen through and are back on and he says this is probs again getting mortgages.

A nation that cannot feed itself or make its own goods

no nation exists in separation from th rest of humanity - China may manafacture for the rest of the world, but if no-one was buying, it'd be pretty screwed. In fact it is also ssuffering in the down turn due to the reduction in orders.
It is in many ways pretty screwed anyway...

if British people like to eat rice, drink tea, enjoy a good banana - we have already committed to importing. I don't think that's necessarily harmful to the economy.

I agree there are many similarities with JApan (island nation, educated population, pressure on housing) - unlike the Greeks, we pay our taxes!

and agree that the housing sector is far from rosy, and sales falling through is a v. bad sign. still, long term the only way is up.

The UK has not been self sufficient in food or raw materials for at least 200 years.

We manufactured and exported to the world during the 19th Century but imported moephysical goods for most of the 20th Century. Witness the deperate shortages during WWII.

We now mainly export services and import everything else. Nothing intrinsically wrong with that.

Alouiseg wrote
"how bad do you think sterling will get against $."
Who knows how deep the rabbit hole goes....

But seriously, for me all bets are off.
There have been posts on here of people hanging on just with interest rates at .5% and that even a modest rise in interest rates would cause them to default.
Icelands interest rates went up to 18ish% at their worst, three years on they are sitting at 9.5%.
A modest interest rise would be very serious. Interest rises such as Iceland has seen would be catastrophic.
When I think of rates rising to 10 plus %, with our 800 billion debt and increasing welfare payments...
I dunno its too scary to think about

NoddyHolder (love the name) wrote:
"The agent selling our house rang me yesterday and he was saying the mini boom has fizzled out and that he is getting a lot of valuation requests for flats which are some people BTL investment that they are offloading"
No surprise there.
I said above DP and I are currently renting a nice 3 bed semi. Our landperson after saying we were welcome to stay, told us at the end of Jan she was putting the place on the market.
Two odd months on we have had one person round to view the place, one bloody viewing! I think our landperson hoped to fly on the coat tails of the mini boom. Unsurprisingly the price was over inflated. More fool them!
In the mean time we are sitting pretty until we give them notice.

Separate issue but something thing that came to mind...
I had/have advised some close relatives to sell their buy to let properties, on interest only mortgages, that are not yet in negative equity. Bunny in the headlights style, they dont seem to be able to respond

When you think that a 1% rate is double its scary!

I remember my parents had a flat in london which I was living in and paying rent for.They were charging me 300 a month for it which was the mortgage when they bought it unknown to me it went up to 1100 for quite a time and they had to sell it at a loss.That was when I bought my 1st place on one salary as a waitress.I wouldn't take on a big debt now for anything.

I remember that, Riven.

I also remember losing my job at the same time as I had a mortgage. It was nail-biting but I was very lucky and found work again quickly.

And of course I didn't have children.

Abetadad: I think the point is that these foods we import will become even more expensive because fossil fuels to transport them are running out. Also, the increasing birth rates in continents like Africa means they will need to keep more of their foods for their own populations.

It is indeed very worrying when people say that a doubling of rates would send them over the edge. Part of me feels sympathetic, but there's also a large part of me thinking "well what the heck did ya think was gonna happen?" How else is the UK going to get rid of its debs? There has to be inflation because we cannot pay back what is owed.

Mind you, I'm an old fuddy duddy who when I bought a house I locked in to a rate for 5 years which could only go up a max of 2% at the end of that 5 years for another 5 years and so forth.

Riven not sure what UK prices are but yesterday I paid 1.10 euros for a can of coke... I can get 2 litres of milk for 95 cents. How bloody wrong is that?

I do agree about the price of food although rises will inevitably mean a massive downsizing in our diet in terms of quality, tehre'd be no option.

WRT to rates more people will end up claiming benefits to cover them- at the moment we qualify for benefit but as some of our costs are lower than average (we have no debts at all for a start, learned the hard way mind when we lost our house post sickness) we choose to pay rather than claim; should it double we will have no option but to claim, we coulod not absorb it. Would be a shame, we've both had a bit of a self esteem boost doing what we can to avoid taking where it is at all avoidable.