So do we all think there is a recession on the way or are you still hopeful we'll avoid one?

[Callisto]

Barratt housing have announced this morning that they are expecting to lay off 1200 workers having experienced a near 50% drop in house sales recently. Bovis and Redrow have also laid people off. The City is, allegedly, laying people off too. So with unemployment on the rise (I've heard 2 million will become unemployed in the next couple of years), manufacturing shrinking for the last two months, inflation running at around 9.5% and no end in sight to high oil prices, is there any way at all we can avoid a recession? And do any of you think that the Govt can do anything to prevent it?

That is the least they will fall i think.If people don't need to move it doesn't matter.The financial times is saying we are in the worst housing downturn since the 30s and the 90s is not even in the same league.In the 90s they never fell more than 0.7% in any one month but they have fallen 5% in the last 2.We need to be re educated to see a house as a home and not an investment or cash cow.

But people always do need to move. They have babies. Or move jobs. Or, as happened in the last recession, rising interest rates made the mortgage unaffordable.

Yes those people will suffer if they have a huge mortgage.Otherwise people trading up will benefit from the drop.

That's the trouble isn't it - when people are forced into a move? I've heard the reasons described as the "Big Ds" - Divorce, Death, reDundancy and Debt. To be honest I think that things will be bad because of the Debt side of things. People who have fixed term deals coming to an end are likely to be in trouble, so are people who took equity out of their home, or those who consolidated loans. I think that there could be a lot of people struggling.

My DH is having to get rid of his carpet business. Luckily he owns the building which luckily a rich person is buying or we would be bankrupt by the end of August. This is from a position of being booked solid for 6 months. The accountant is shocked at just how quickly things have turned around.
We do not live a high end lifestyle. We drive old cars, we dont have any personal debt apart from mortgage. We have had to drop the price of our house from £249,950 to £220,000, just to get some interest!

Recession, no not round here!
GlaxoSmithKline have announced 650 jobs to go locally today as well. Just to cheer everyone up a bit more.

Back to Callisto's op- is there anything that we can be done to avoid it, or minimise its effects?

I think, regardless of one's personal financial position, global recession is going to be miserable for every one of us.

Recession is two successive quarters of negative growth. We aren't anywhere near that yet, apparently. We wont know until it;s happened.

Lewis of Moneysavingexpert.com was talking on the radio today very eloquently about the "four horsemen" of financial apocalypse: credit crunch, economy, housing market and inflation. They've all started galloping at once, which is what's caused the current situation.

That's Martin Lewis. Don't know why my mouse chopped off his first name!

i think it is here and i think it is going to get worse.

DH has seen a lot of redundancy in his field too (not the building industry). His company have shed a lot of jobs. So have another firm nearby (same industry). We're hoping that by streamlining the company now, they will avoid serious trouble later on, but of course that doesn't help the people who are already out of a job.

Yes the official definition seems redundanmt this time because of the speed and severity of the initial decline.It is a neccesary evil and part of a cycle but I fear this time is going to be shocking because the preceding years have been so good

The BBC news page had a quiz about the credit crunch that highlighted the definition of recession (i.e. negative growth for 2 quarters). According to that definition, there were only 5 recessions in the 20th century. But I bet that there were an awful lot more quarter years when people really felt the pinch.

The figures from one housing expert today (forget who) said that housing in central London will fall 25% by the end of next year. House sales in central London have fallen by 45% since the start of the year. So if it gets that bad in London, I think it will be far worse in the rest of the country.

Plus some anecdotal gloom - a friend of DP's is a high end builder (bespoke Cotswold stone homes for wealthy people, of which there are many around here) and he has nothing on his order books when his current job finishes and no enquiries coming in.

Recessions are unavoidable in the long-term and are a normal part of an economic cycle.

The woman who has always made the blinds for my houses has said she has no work coming in at all and she is thinking of going back to teaching because it has never been like this for her in 11 years

So, what on earth is going on in my parents' town, where they've been quoted an average of £3K to have their outside paintwork re-done (when 4 years ago it was done, by one of these same quoters (?) for under 1000). What planet are these cowboys on?

It means different things for different people. Was having my hair cut this morning and was told by barbress (not real word but I can't have a "hairdresser", come on) that she'd had a woman in last week who had said "oh, yes, times are really difficult, I can't afford the woman who does my ironing any more..."

And then, as if she didn't know when to stop digging...

"And I've had to cut my cleaner's hours..."

Diddums.

They are trying to get a few £ in before it all goes arse over t*t?

The Govt can't do anything at all as they are in massive debt. They can't give tax breaks to businesses to ease the strain and they can't lower the tax on fuel etc to make things easier for joe public. The Bank of England is stuffed because of inflation running at 9.5% so lowering interest rates is not an option as I understand it.

I think the only thing we can do is ride it out and hope it isn't too bad for too long. I really hope someone can come along now and tell me how wrong I am though.

If your hairdresser works every hour God sends maybe she doesn't have time to do her own ironing and cleaning.

callisto you are right if they lower interest rates again as a sticking plaster temp measure we will really be in it.We do just need to ride it out.Rates have to rise to get inflation under control or we are headinf for wage disputes and bread at 3 quid a loaf

Amusing rumour I have heard is that Labour movers and shakers want Jack Straw to be the "man with the knife", to oust Gordon, become PM and immediately announce a General Election they know they'd lose - thereby foisting all of the current economic woes on to the Tories. And giving Labour a term to regroup under Miliband or Purnell, ready to take power again when it all goes tits-up for Cameron in 2012.

It's possible!!

callisto - no, it wasn't her, it was a customer she had in. Read properly!

like it

Amusing or chillingly cynical?