There is an air of gloom in the papers. I am in the mood for preparing lists. This is my summary of this mornings reasons for an economic downturn in 2017:
- Brexit uncertainties may hit many economies and not just the UK
- Trump may start trade wars
- Rising inflation in Europe may trigger interest rate rises that most Eurozone countries can't afford
- US tax cuts are likely to trigger US interest rate rises
- Market sentiment may move against the UK government as the deficit rises forcing a UK interest rate rise in the absence of QE
- A UK local authority funding crisis may lead to a lack of confidence in long term social care and an increase in saving, reducing current spending as a result
- Consumer credit is back to an all time high in the UK - which has usually happened before a crash
- UK house prices may go into reverse if interest rate rises lead to an increase in foreclosure
- The FTSE 100 and other stock market indices are at all time highs with little underlying logic to that, which has usually happened shortly before a crash
- There are clear signs of a UK retail down turn
- Car sales are forecast to fall by 5% in the UK in 2017
- Italian banks remain on the brink threatening the Eurozone
And of course, we may weather all that.
Maybe.
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“maybe” like 2016?
You could add, that if we begin to take climate change seriously, we will not be looking for growth but for reductions of emissions of carbon dioxide and methane on a scale that necessitates a substantial curtailment of growth. Professor Kevin Anderson of the Tyndall Centre for Climate Change Research (1) makes a compelling case for immediate cuts of 10% per year. Professor Jeremy Jackson speaking to the US Naval War College (2) agrees and speaks of sea-level rise, ocean pollution and the destruction of fisheries. Anyone who looks, also knows that we need long-term thinking about food production and care of soil and of leaving accessible resources for future generations. There is a compelling case for the economics profession to abandon terms such as ‘consumers’ and to devise incentives and measures that will increase the chances of the planet’s children enjoying a civilised life. Within the above constraints, the goal should be for every community to enjoy a better standard of living than that of royalty fifty or sixty years ago.
1 Professor Kevin Anderson — Presentation at the Unversity of Uppsala https://www.youtube.com/watch?v=2YMpz0nd9Ns
2 Dangerous Sea Level Rise: Prof Jeremy Jackson https://www.youtube.com/watch?v=WsA-_oQwhA4
Even though there there is an uncertain future of Brexit, in what terms can Brexit affect other countries? Which countries could it mostly affect?
Could the prospect of Brexit cause shifting changes within one year?
Brexit impacts other countries by
a) creating uncertainty
B) reducing trade
C) encouraging copycat activity
D) requiring they dedicate resources to new agreements
I think those changes may already be happening
R