cuts are pushing us into a double-dip recession

[darleneconnor]

www.google.com/hostednews/ap/article/ALeqM5ijzMRzu10jnYoqIb69_R0hrzgnoQ?docId=4c0373e5575c4481ba144f9b11dd5e83

This isn't good news.

Thought the OP read 'cunts'

That would be accurate too

"cuts are pushing us into a double-dip recession"

At the moment that's an opinion rather than a fact.

The recent economic contraction is certainly related to the recent bad weather. The retail, services and construction industries all took a very heavy hit from that.

However let's see how the start of this year goes and whether this contraction goes away or whether we genuinely do slip into a double-dip recession. Right now it's too soon to tell...

Yes, will that be when the 20% VAT kicks in

There has to be a case for predicting that the next quarter will show better-than-expected growth purely because the previous one was lower-than-expected. 20% VAT is unlikely to reduce sales because retailers will absorb some of the costs.

dd bought something last weekend that cost £8.49, she peeled that sticker off to reveal a price of £7.89. I think that many retailers are using the VAT to hike their prices by way more than 2.5%. This is surely going to drive inflation up?

Yes, manufacturing is doing better is great news.

It is curious that George claims that manufacturing was not affected by the weather. How can that be?

Maggie did destroy manufacturing yes, you are right.

Sorry but who on earth didn't expect this and the worse that is to come.

The last few months many of us have seen benefits cut and fuel,utilities,petrol,VAT,student fees etc rocket. We're probably going to loose free activities like going to the forest,talking a walk in your local woods etc,etc.

The gov live in a totally different world. A privately educated,massive salary world. I'm honestly starting to think they're either v dim or completely clueless to what living in the real world is really like. Ie if people are poorer they are going to spend significantly less if anything bar the esssentials.

Note to DC- if you slash our benefits, hike up the cost of just about everything and terrify us with the dread over what you're going to do next guess what we aint going to be spending any money.

There isn't a month that goes by without DC smugly announcing something else he'll be taking away from many families and that we're all in it together. Well no we're not in it together actually David otherwise you'd have some inkling about how much these cuts scare and are only just beginning to bite-big time. You can't have it both ways- a population struggling and growth.

To be honest I'm so looking forward to DC and GO falling flat on their faces and coming to the realisation that squeezing hard working families to the bone may not actually be good for them or the financial sector which lets face it is all they care about. This will happen as things are going to get far,far worse-they can't not.

I don't know a single person who isn't counting the pennies and bracing themselves big time at the moment and that's right across the board salarywise. People who've never ever had to live within a small budget,who grow up surrounded by wealth are not the right people to run a country at a time like this they really aren't,they're just totally clueless.

I guess the weather didn't affect manufacturing as much as retail because in bad weather people go out to work but they don't go out for anything else unless they have to in bad weather which is why retail and leisure sectors didn't do so well.

You don't have a recession unless you have 3 quarters of a contracting economy so it is too early to tell if it will be a double dip.

Not really sure what effect the hike in VAT will have. If the view at the time was that a decrease of 2.5% in VAT, when it went down to 15% was not enough to stimulate the economy and get people to spend, I have yet to be convinced that a 2.5% increase will have much of an effect either. Depends very much on inflation as inflationary increases and VAT increases combined might be more of an influence.

"People who've never ever had to live within a small budget,who grow up surrounded by wealth are not the right people to run a country at a time like this they really aren't,they're just totally clueless."

Well part of the reason that we're in the mess that we're in is that the people who were running the country at the time when we were doing OK were clueless. Labour only managed to live within their means for 3 years out of all the years that they were in office. Even in the "good years" they were spending far more than they earn.

If you cannot afford the services in the good years then how on earth can you possibly believe that you can maintain the same level of spending when things go wrong?

And before we hear any cheers from Tory supporters as the woeful financial short sightedness of the previous Labour Government is pointed out let's also remember that the previous Tory Government (79 to 97) was even worse. They only managed to balance the books for two years.

And that is the problem.

We've had years of living beyond our means and we've all become accustomed to it. Basically our country's lifestyle for the last 50 years has been funded by hitting the credit cards. It felt good at the time, but the debt was slowly mounting.

And we've now got a painful period of readjustment as we get used to what we really can afford and political parties of all persuasions try to point the finger anywhere but at the idea that you can constantly borrow in order to pay day to day bills.

Manufacturing declined faster under Labour than Tories, didn't it?

See here

Plenty of labour MPs were privately educated including the current shadow chancellor. Does that mean they were out of touch with reality too?

I don't agree.

At Christmas people will spend,it may be a few days later or on different items to what they planned but they'll still spend what they were planning to spend.

In the run up to Christmas people don't just stay in due to a bit of bad weather,they re-schedule. I don't know of anybody completely snowed in, housebound for 3 months, come on.

Also pre Christmas everybody is busy. If you can get into work you'll also get yourself out to do Christmas shopping. Presents don't buy themselves.

I think people planned to spend less this Christmas,most of the people I know certainly did.

The last Labour PM was educated privately - he alone confirmed my worst fears about private eduction

Sorry - last but one

"At Christmas people will spend,it may be a few days later or on different items to what they planned but they'll still spend what they were planning to spend."

I think people usually spend more than they planned to spend if they get into the shops and start looking around.

"In the run up to Christmas people don't just stay in due to a bit of bad weather,they re-schedule."

The final weekend before Christmas is usually meant to see a massive surge in spending as people rush around getting the last few bits and pieces. People put things off or possibly just enjoy the mad crowds. Either way it's a definite phenomenon that you see year after year after year. That was most certainly hit by the poor weather that weekend.

And people didn't at that point flip to buying online as there were warnings about all sorts of delivery problems. So the money went unspent. Possibly we'll see a bit surge as people then might have blown it in the January sales...

"If you can get into work you'll also get yourself out to do Christmas shopping. Presents don't buy themselves."

People are usually willing to put more of an effort into getting into work.

Whoever is to blame the fact is they are doing far too much too soon.

They're just trying to slash and burn as fast as they can within the single term they know they've only got for their own political and ideological views. They hope Joe public will just mumble grumble for a few years but keep funding the growth they want-not going to happen.

Badgers I spent what I planned and I live miles from a city.

Our roads were only unable to drive on for 3 days. I did a lot of mine online and everything arrived(I know Scotland was different) on time. Most people I know do the vast maj of Christmas shopping before the last week to avoid the rush anyway.

I agree the weather will have had a slight impact but if things were tickety boo before it wouldn't have been such a noticeable drop.

I thought the title said 'cats' and wondered what the poor cats had done. [wanders back out of thread]

Office of National Statistics reckon that without the weather, growth would have been roughly 0%, so it definitely did have a big effect, but 0% still would have been much worse than predicted, which was a rise of 0.2 to 0.6%, so the weather seems to have been partly, but by no means totally, to blame.

It also needs to be remembered that this is the first set of stats for the 4th quarter of last year(I think). There is a margin of error (as there always is) that could wipe out a negative growth figure when it is corrected by the revised set of figures in a few weeks time. Of course it could make it worse too but nothing is certain yet.

Too soon to be jumping to conclusions one way or another on double dip recessions

"Badgers I spent what I planned and I live miles from a city."

Would you normally go on a big shopping spree the last weekend or few days before Christmas?

I wouldn't.

However that doesn't change the fact that millions of people usually do and this year didn't.

In 2009 the biggest spending day for Barclay Card was December the 23rd. A vast number of people do either delay or splurge and then spend right at the last moment.

That didn't happen this year and it's lack was certainly noticeable and given the usual yearly pattern and the weather utterly predictable.

"I did a lot of mine online and everything arrived"

The fact is that many online traders had big warnings up that last weekend that delivery in time for Christmas was not guaranteed. So those of the millions who didn't go and do the big shopping spree and then looked on line would almost certainly have been put off ordering.

Not everybody had bad weather in the run up to christmas.

"Not everybody had bad weather in the run up to christmas."

But significant portions of the country did have transport problems during what are normally the highest earning days of the year for retailers.

And online retailers were unable to step in to fill the gap due to a combination of their own weather induced delivery issues and the fact that the usual highest spending day is too late for deliveries anyway.