It's just a question of when we get a downturn now, not if.
These are the top stories in the FT this morning, according to one of its own emails:
If you think they suggest good news, you're looking at the world through decidedly optimistic glasses.
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My view is that the UK is already in the early stages of a recession and will drift into a full blown recession over the next twelve months.
Agreed.
Typical exuberance before the storm.
Business chiefs gloomy about future. Would that be demand or profits or both? If both have they got any actual suggestions other than more austerity and trickle-down (tax cuts mainly for the already wealthy) which clearly aren’t working as a form of quasi-fascism?
They have no clue on macro
They say that is someone else’s problem
Yes I believe that’s true and therein lies the weakness in Market Capitalism no idea how the government supports it. Keynes went some way to explain this by explaining that uncertainty of profit outcome meant that the market rarely optimised the economy on its own and higher than necessary unemployment rates revealed this. Secondly, he pointed out that the propensity to save removed demand from the economy. His solution was that the government should normally make up for both by deficit spending. Where Keynes failed was to point out the government should not be put into a position of propping up Market Capitalism wages with government top-up benefits. It’s how you prevent quasi-fascist parties seizing control of Parliament to keep a Minimum Wage low and top-up benefits flowing let alone equitable taxation that’s a key issue. In summary Market Capitalism claims to be interested in demand but actually wants to avoid looking at the big picture as to how this can best be achieved on a regular basis.
There is more on this coming in the next few days
Anybody who sells now is clearly smarter than the average bear 🙂
Thank you, I’m here all week. Try the poutine!
There are signs that the domino effect of bad debts may actually be starting now. Frankly I’m amazed it has taken so long.
I have a strong suspicion that the only thing keeping many SMEs afloat has been unprecedented flexibility by HMRC during and since Covid. If that organisation gets more aggressive, the dominoes will well and truly tumble.
I call the present system a form of economic fascism in a corruptocracy. I can describe it no better than that. We have royals, big landowners, corporations, CEOs and a small concentrated bunch of people living very ‘high on the hog’ whilst millions, many even in work, cannot even pay necessary bills being asked to retire near 70 so stopping young people getting into work. The system is what I call the 80/20 Society. It is working for 20% of society but at the expense of the rest of us. Whilst it works beautifully for an elite, the system won’t change.
Many of us lone warriors have been pointing these things out for decades but often they seem to fall on deaf ears. Obviously the MSM and the political system is bought and paid for and the Starmer LP is just Tory 2.0. He seems to glory in showing how mean he can be towards the poor, disabled and vulnerable doesn’t he? Presumably 350,000 deaths under the last round of austerity wasn’t enough, he needs to show how ‘on message’ he is by punching down again and causing more suffering, misery, grief and extra deaths. Ho hum.
I personally first of all want a number of things changed and ended. The bedroom tax to be ended, the continued attack on the poorest ended because things like that are always a foot in the door to attack other people with equal impunity. I also want the end of them taking money off Universal Credit when a partner gets a job. These and many similar things don’t save much money they are just punitive and punish the people who are struggling financially. Benefit fraud is a fraction of what is avoided through tax, so perhaps we need to look at that first.
I want to see austerity ended too. It doesn’t work and actually throws the general economy for the majority into further and continued economic stagnation and downturns. Taking money out of the economy and expecting things to get better is like stopping eating and drinking and expecting to continue to live.
Pressure is beginning to bear fruit. Richard Burgon’s tax the wealthy petition and many other things across the board show that the majority of us are now opposed to an elitist agenda of wealth appropriation and hoarding basically at the expense of the rest of us. It’s obvious to almost everybody that change is now necessary and due. The longer it takes the worse it will be, I believe. Wiser heads in parliament and power may see sense. But the ball is rolling.
And here we are looking at a recession most likely 4th quarter 2025 and 1st quarter 2026 and a current base rate of 4.25%. The sheer blinkeredness and incompetence of both Reeves and the MPC is staggering