[nheather]

I appreciate the recession is a world wide thing and that it was kick started by the sub-prime motgages but why is it that it seems to be hitting Britain so much worse than other countries (apart from Iceland!).

Many countries have had bank rescue schemes but our government seem to have paid out the most by a long way (including the US). We were in a better situation then most before the worldwide recession. And yet our stock market seems to be plummeting more than the others and our currency is in free-fall against the dollar and the euro.

Normally a weak currency is good for exports but I'm guessing that in the recession everyone will be tightening their belts and companies will be struggling to keep afroat so we may not see much benefit from that.

Cheers,

Nigel

[Steven]

You could argue Britain's economy is far more dependent on providing services than other nations as all of the manufacturing jobs have gone abroad

And house prices was too high

Most commentary seems to be in agreement that sterling was artificially high against the dollar anyway

[PJTX100]

We have very high levels of debt (personal and government) hence it's presumed our ability to absorb harder times is less than other countries.

[Pecker]

I dunno, is it?

Nick Robinson was on The Today Programme the day after the recent Scottish by-election. He said he'd gone up with his usual BBC film crew to do the usual stuff, which is to obtain some footage which might support the major issues being discussed in the by-election.

So, with the recession being top of the agenda they went looking for footage you might expect to see: auctions of re-possessed houses, factory gates locked shut, you get the idea.

Anyway, apparently they couldn't find any.

The only other thing I can think of is that we've had major countries announce that they are officially in recession so far, Germany & Italy, and both have announced this a full quarter before us.

Finally, at the many internet forums I frequent, I only have one mate so far who's been laid off, and he lives in Ireland.

I think the biggest way the recession has hit us so far is with house prices. But most people most of the time are not moving house, so this has limited impact.

Don't get me wrong, we may go deeper into recession than other countries and stay their longer, but at the moment I don't think we've being hit too badly.

Steve W

[shodan]

I've often thought that there is more debt and loan giving than there is actual hard currency. ie There is about 150 grand owed on my mortgage yet when i got the loan it was only numbers on a screen and I never actually had the physical money so i wonder if part of the problem would be that there isn't enough physical money to go round. If everyone in the country wanted to close their bank accounts and have the cash at home, there wouldn't be enough cash for everyone to do that. Will that have any impact on the recession? More credit than cash?

[PJTX100]

Originally Posted by Pecker

I dunno, is it?

I think we're just seeing the opening salvos at the moment.

Once xmas is out of the way I think we're in for a rough ride during 2009.

I deal with a lot of suppliers and the vibes are not good.

The number of cold calls I get has risen noticably, just trying to pick up any business.

[jerryfb]

Very high levels of unsecured personal debt
Very high levels of secured household debt
Very high levels of public sector debt
Highly inflated property market
A lot of hot money chasing our relatively higher interest rates
Over reliance on financial services as % of GDP
Poor balance of payments figures

These are all reasons why we are not in a good place to weather this well. It is only just now starting to hit home and rest assured most employers are waiting till new year to lay people off. 2009 will be very rough indeed.

[Pecker]

Originally Posted by PJTX100

I think we're just seeing the opening salvos at the moment.

Once xmas is out of the way I think we're in for a rough ride during 2009.

I deal with a lot of suppliers and the vibes are not good.

The number of cold calls I get has risen noticably, just trying to pick up any business.

Me too.

I think we'll see some bad times in '09. How bad it'll get, we'll have to wait and see.

The one glimmer of hope is that every time they interview a buisness owner on The Today Programme they all seem to say they've learned from the early '80's and early '90's. Most companies are now pretty tight, and whilst they won't be expanding or making money during the recession, they'll not have to close or lay anyone off - they'll effectively be able to sit and wait it out.

Here's hoping.

Steve W

[Yandros]

Originally Posted by nheather

We were in a better situation then most before the worldwide recession.

Good grief, have you actually been taken in by the Labour progaganda?
It's the old tactic of repeating a lie so often that people start believing it.

Gordon sold off our gold reserves when the price was rock bottom, and racked up a huge national debt. The last time we went into a recession, we started off with a budget SURPLUS!!!!

What we are actually seeing is payback time for 9/11. At the time Eddie George and Alan Greenspan knew that the world was about to go into recession then, so kept us afloat with cuts in interest rates. We then got huge levels of consumer spending, rampant house price inflation. They knew there would be a price to pay in the future. Pretty much everyone in charge knew this was coming. The smart money has already left the party, and those who were in too deep just hoped that the the music didn't stop on their watch.

Folks, we have all been lied to by the politicians and the banks, because to do anything else would've killed 'consumer confidence' and the game would've been up years ago. Gordon's big political mistake was not calling a snap election last year before all this hit.

"New economic paradigm"
"No more boom and bust"
"House price soft landing"

GARBAGE!!!!

[Ian J]

Yandros - can we keep this one on topic please rather than going over old ground yet again

[Ian J]

Originally Posted by Pecker

I think we'll see some bad times in '09. How bad it'll get, we'll have to wait and see.

I think that once the January sales are out of the way we will see a lot of household names disappearing from the High Street and if consumer confidence doesn't pick up and people start buying cars again we will see a lot of failures amongst those businesses that supply the automotive manufacturing industries too

[Desmo]

Originally Posted by Pecker

Finally, at the many internet forums I frequent, I only have one mate so far who's been laid off, and he lives in Ireland.

My brother was made redundant from a small printing firm only last month.
I've got a friend at Rolls Royce Aerospace who could be out of a job come December.
I've got a friend at TNT who has had branches shut down and could also be out of work.
I've got a friend at HP who have plans to lay off 28,000 worldwide.

These are just a few people I know. I'm sure there will be plenty more.

[mattrixdesign2]

Originally Posted by nheather

Normally a weak currency is good for exports but I'm guessing that in the recession everyone will be tightening their belts and companies will be struggling to keep afroat so we may not see much benefit from that.
Nigel

During the early signs of the down turn I think the general consensus was that exports would remain strong to the likes of the emerging economies China/Russia/India etc and this would help things, but as this is now a world wide problem, so exports are not as strong as hoped.

This had hit Germany in a big way.

Originally Posted by nheather

Many countries have had bank rescue schemes but our government seem to have paid out the most by a long way (including the US). We were in a better situation then most before the worldwide recession. And yet our stock market seems to be plummeting more than the others and our currency is in free-fall against the dollar and the euro.
Nigel

Investors are seeing the "pound" as a risk due to the high levels on borrowing in the UK, hence Gordon Brown is trying hard to get other countires to use bail-out schemes, and their borrowing will also increase, and therefore stop making the UK look so bad.

Its going to be a tough few years, I expect some big companies to go under or merge, I think there will be some big changes in the motor industry, Ford and GM in the USA are on their knees pleading for government money.

I just hope the UK can pull together abd get through this, with a few job loses as possible.

I see 2011/2012 as the recovery...

[Bald Monkey]

The industrial estate where I am based is getting quieter all the time. The number of cold calls is indeed rising. The number of people ringing for jobs has risen dramatically. Chasing money from customers is getting harder the excuses longer.

At the Moment IMHO many are still unsure how bad it will get. And many are still hopefull they can 'spend' their way through it by advertising more, reducing overheads, and being more competitive. This is just the start. In 2009 the reality will hit, then things will really get bad.. IMHO.

As for why the UK is hit so hard, I agree with the above, Housing bubble, personal debt, national debt, manufacturing decline - and not just since the summer.. , US dependancy, Not within the Euro.

But I have to keep looking at the positives, You do what you can and hope it's enough and if it is then I see the destruction we are facing as a bit like a forest fire, the strong will survive the weak will not and after the oportunity for new growth should hopefully be increased.

These are IMHO very bleak times. And we still are only just peering down the abyss we are yet to plunge and certainly no where near the bottom.

[xit2050]

Thanks for ruining my first day of the new week.


Let's commit collective suicide, wouldn't that be a solution?

[Pecker]

I've noticed a few people saying we'll get hit hard because we rely on the service sector, and we don’t manufacture & export anymore, which may be true.

But when the news of Germany going into recession came through the BBC report said something a little different. According to the report, apparently Germany is the 3rd biggest exporter in the world (presumably after Japan and China?), and as the world is in recession they're getting hit from all over, irrespective of how strong their businesses are.

I suppose the only countries that'll come off lightly will be those with fairly self-contained economies, who've been running a very tight regulatory ship, and not lending from foreign banks.

Can anyone think of any?

Steve W

[Bald Monkey]

Originally Posted by xit2050

Thanks for ruining my first day of the new week.


Let's commit collective suicide, wouldn't that be a solution?

NO !! That would be stupid..

Don't give up, but be realistic and try to prepare for the worse. Whilst trying to make the most of what you have. If it doesn't come great, if it does you've done the best you can.

I'd rather die trying than quit!

[Sonic67]

Originally Posted by Pecker

I suppose the only countries that'll come off lightly will be those with fairly self-contained economies, who've been running a very tight regulatory ship, and not lending from foreign banks.

Can anyone think of any?

Steve W

China has been loaning money out. They also have 10% growth or something.

On the firms hit, BMW Mini is having a four week holiday this Christmas.

[Pecker]

The stories of people losing their jobs make me very sad.

I hope all those affected find new employment soon. Good luck to all of you.

Steve W

[hyeongseong]

Originally Posted by Sonic67

China has been loaning money out. They also have 10% growth or something.

They'll need to have at least 8% growth just to keep people happy . Because of people in Europe and US spending last on stuff , there are already lots of factory been closing down with huge job loss. There are no social welfare in china , if you out of job then you will have to pay for every thing .

[johntheexpat]

France isn't in recession yet, growth around a tenth of 1% means they technically avoid recession. But what gets me is the difference between growth of 0.1% and contraction of 0.1%. Its not a lot but psychologically it seems huge, one is growth the other recession. And isn't the psychological aspect of all this the most important? The populations of the western world are told they are in recession and act accordingly. Draw in the purse strings, reduce debt and spending etc etc which only goes to make things worse, because then retail gets hit, more jobs are lost etc etc.
I don't know a lot of economic theory, but was once told that an economy should be able to grow by 1-2% each year just through improvements in efficiency and technology. Why weren't the alarm bells sounding when growth fell below that level?
Its going to get worse before it gets better because that is what everyone expects, imho.

[Sonic67]

Originally Posted by hyeongseong

There are no social welfare in china , if you out of job then you will have to pay for every thing .

Yes which is why as a people they also save a lot. Something else we don't do.

[Wild Weasel]

Originally Posted by johntheexpat

France isn't in recession yet, growth around a tenth of 1% means they technically avoid recession.

They're almost certainly fiddling the figures like the UK government is. We've really been in a recession for a year already here.

[mattrixdesign2]

Just one thing to remember guys!

We (the UK / the World) have all been through these down turns before, and we come out of the other side and go on to grow again.

We will get out of this, hopefully sooner rather than later, with as little job loses as possible. It may be a steep learning curve for any "non-savers" though!

GOOD LUCK

[Yandros]

Originally Posted by Ian J

Yandros - can we keep this one on topic please rather than going over old ground yet again

With respect Ian, I was keeping it pretty much on topic. The OP was puzzled as to why we're suffering, despite being in a better position than most. I would say that this is an incorrect starting assumption. We are actually very exposed due to the housing bubble, lack of gold reserves and high national debt. Most of THAT is as a result of politicions looking no further than the next opinion poll, and city types desperately trying to cover up the fact that they're building castles in the air.
A newsnight special report on the subprime crisis last year had an interview with a Morgan Stanley wizzkid who admitted that their mathematical models couldn't predict what was about to happen because "they are based on the assumption that house prices can only go up" .

Like Iceland, we have precious little manufacturing, and have encouraged a banking sector that has outgrown the goverment's ability to control or support it.

To quote Warren Buffet "when the tide goes out, you discover who's been swimming naked". Gordon "no more boom and bust" Brown and half the City have got no trunks on. His 'golden rule' of balancing the budget over the economic cycle appears to have been based on an assumption that we couldn't possibly have a recession as part of the cycle...what sort of economic cycle only goes up? As soon as things go pear shaped, the golden rule has gone out of the window.

Had we regulated the idiots in the city better, not built up the debts in boom times, and not created a debt bubble to support the econony in 2001, we might've had a chance, and had a less serious downturn back then. Going back further, we're also seeing payback time for Maggie destroying the manufacturing base making us too reliant on the financial sector, and Major for relaxing mortgage and landlord regulation - leading to the rise of Buy to Let speculators.

[Yandros]

Originally Posted by mattrixdesign2

Just one thing to remember guys!

We (the UK / the World) have all been through these down turns before, and we come out of the other side and go on to grow again.

We will get out of this, hopefully sooner rather than later, with as little job loses as possible. It may be a steep learning curve for any "non-savers" though!

GOOD LUCK

True . I just hope we don't see the sort of situation Japan got into though - economic doledrums for a decade.

There was an interesting point made by someone in the city a couple of weeks back. They said that there is a habit of having a witchhunt after fiascos like this, and getting rid of all the people who screwed up. You then get a new generation of bankers etc who'll go on to make the same mistake all over again.

He suggested that it might be more sensible idea to hang on to the current generation, using the old 'once bitten, twice shy' principle.

[PJTX100]

Originally Posted by Yandros

He suggested that it might be more sensible idea to hang on to the current generation, using the old 'once bitten, twice shy' principle.

I suspect a lot of these people aren't bitten though, they just lie low in their multi-million pound mansions for a while. They'd happily take the short term gains again and leave others to deal with the mess.

[Junglist]

I own a retail business. It is a family business that has been trading for 30years now.

We have had ups and downs throughout our history. I remeber the early '90s being very hard for us but the late '90s/early '00s being magnificent.

In the last 2 years, we have seen a gradual slowdown in our market. The footfall has decreased as have turnover and profits. Now, this could be due a range of factors, eg competition, but talking to other retailers in our field it's the same story.

I have also discussed the situation with suppliers/manufacturers and they seem to be going the same way. Business in general has slowed and is still slowing.

Now, I am no financial expert but I would say that the easy availability of credit has much to blame for the current global situation. People have been given loans much greater than what they were earning and could be expected to pay back. Now that the slowdown is happening everybody is watching their spending and cutting back on the luxuries that they had got used to over the last decade.

IMO we are now in a global market so until the major players, eg USA, Japan, Germany don't send out any good news, this downturn will continue for a while.

I am hoping it doesn't take too long as I have had to put my business expansion plans on hold for the moment.

[Pecker]

Originally Posted by Wild Weasel

They're almost certainly fiddling the figures like the UK government is. We've really been in a recession for a year already here.

I don't think it's possible to figure these figures (too much info available to everyone), but I think timing is important.

Q2 this year growth was 0%. Q3 we contracted. Assuming the economy slowed during Q2, then we might safely assume that there was a small amount of growth in April, followed by a small amount of contraction in May and June, which averaged out as 0%. So the 'recession' could be said to have started in May, which means we've been in recession for 6 1/2 months.

But official figures are published for the calendar quarter, so officially we didn't enter recession until July, and we won't be able to say that officially until mid-January, when the figures for Q4 come out.

Steve W

[tony brazao]

I am a recruitment agent, I've been recruiting for years and I now own and run a recruitment agency. There is a growing number of candidates looking for work (due to job cuts) and there is now a shrinking of vacancies. I have several friends who own firms in other sectors and we're all feeling the pinch.

The housbuilding and construction sector in general has been hit very hard, there's huge numbers of people many of whick were earning well over £50k pa (some were earning well over £200k pa) and these guys are either out of work or have taken a job with Parcelforce driving a van! I kid you not.

The economy is grim at the moment and I think it will get worse. If we look, we'll see many reasons as to why the 'dry times' are here, but, that is now historic.

What about the furture?

It is impossible to know how long the downturn will last. It could be months, a year or years. No one can say for sure.

The bulk of UK PLC functions on finance and, here lies the problem. The finance markets are stuffed, banks don't want to lend to fund business projects and if they do, the rate of interest is much higher than it was. Many proven business models 'worked' on yesterday's finance rates but on today's APR many business models will not work.

If you want job security, look for a job in the public sector and avoid private SMEs/PLCs etc.

Tony