UK/Europe/Asian Economies Slowing

[mrmouth]

UK economic growth ground to a halt between April and June, according to the latest official figures.

The Office for National Statistics said the economy stalled, showing no growth from the first quarter of 2008. It ends a run of more than 15 years of consecutive growth in the UK and will raise expectations of a rate cut.

The 0% growth figure was down from an earlier estimate of 0.2% and lower than the 0.3% growth recorded in the first three months of 2008.


'Challenging times'

The figures were the weakest since 1992 and the news sent the pound lower against the dollar and the euro. The government said the economy was feeling the effects of global pressures such as high commodity prices and the continuing credit squeeze.

"The Government's priority is to guide Britain through these challenging times, while also supporting those hit hardest as a result of these global factors," a Treasury spokesman said.


But the Conservatives said that Labour's economic record had been tarnished.


"For years Gordon Brown boasted about consecutive quarters of economic growth," Shadow Chancellor George Osborne said. "Now economic growth has ground to a halt and Brown's bubble has burst."

Friday's figures showed that the services sector, the backbone of the UK economy, grew just 0.2%, while manufacturing output fell by 0.8%.

Household spending dropped by 0.1%. Exports also fell as Europe, the UK's main trading partner, saw growth contract in the same period. The UK economy grew 1.4% from the second quarter of 2007, revised down from an initial estimate of 1.6%.

"The figures are very weak and suggest the UK economy is already in recession," said George Buckley, an economist at Deutsche Bank. The economy technically enters a recession when it shrinks for two consecutive quarters.


Rate dilemma

Bank of England governor Mervyn King has warned that the UK economy is in for a difficult and painful period due to a combination of high inflation and rapidly slowing growth.

Inflation, which at 4.4% is well above the 2% target rate, could make it more difficult for the Bank to cut interest rates to spur the economy. But analysts said the zero growth reading could lead to lower borrowing costs by the end of this year. "This really does put a rate cut firmly on the agenda although it is unlikely to come until we have seen the peak in inflation," said Brian Hilliard, an analyst at SG.

http://news.bbc.co.uk/2/hi/business/7576274.stm


The European and Asian economies are also following similar trends. Japan appears to be nearing a recession too.

While people were gloating over the US' economic troubles, what anyone with a brain thought would happen is happening. Our friends kept interest levels high, and it hurt the US, now its coming back to bite them directly in the ass.

[attilavolciak07]

It is weird, in Macedonia our economy is getting better! I can buy a Mars bar for like 10 cents! In Luxembourg I bought it for almost a Euro!

[Sven788]

It is weird, in Macedonia our economy is getting better! I can buy a Mars bar for like 10 cents! In Luxembourg I bought it for almost a Euro!

Ofcourse it's getting better there!
The West pays for your backwards in time to bring you back to the time because they want that kind of countries in the EU.

[Senno]

The West pays for your backwards in time to bring you back to the time because they want that kind of countries in the EU.

Can you clarify what you mean by this? Is it that the "West" is subsidizing Macedonia?

[Enemy of the State]

Yeah the economy is going to everywhere. Estonia used to have the highest growth rate in Europe, but last quarter we actually had negative growth. I fear a recession. Well, it's cyclical, so it will probably turn around again soon.

[Erik]

Our friends kept interest levels high, and it hurt the US

How is high interest rates in Britain and Europe a bad thing for America?

High British and European interests = strong Pound and Euro = relatively cheap dollar = more Brits and Europeans buying American made products = good for US economy.

[Ghoul_Sunday]

In economies you all mentioned the "slowdown signal" was already emited about a year or two. Only because of press, managers and politicians trying to persuade us all to keep our money on the Stock Exchange so that they (or "they") can withdraw their assets and liquidities in a way unseen by the public, the individual investors are going to lose a lot of their funds. The slowing down process started long time ago (obviously it depends on the country) and the information on that can already been seen in the press... but not among the "big" news. Only the people that had open access to particular information in the entreprises and reliable source of statistics knew all about it. Still, who thinks the the so-called bull market can last longer than 4,5 years? (the situation in the US in the 90' was a different one)

[LoZz]

because the american economy is steaming ahead like a ... fresh cow pat? we are all about to be royally screwed by our banks and your gloating about what exactly? we are just as screwed as you are? brilliant.

[Каие]

The Banks and simpletons are too blame, not Gordon Brown as is commonly thought. Banks handing out loans like confetti and people think that's cool.

[Heinz Guderian]

Its kinda worrying being a Brit and all, but i just got a fat pay rise. Totally undeserved. I put it down to my BSing my line manager. Such a n00b. Totally rolled over when i said i had other offers from competitors. But enough about me, hows the UK economy?..oh wait..

[Каие]

Its kinda worrying being a Brit and all, but i just got a fat pay rise. Totally undeserved. I put it down to my BSing my line manager. Such a n00b. Totally rolled over when i said i had other offers from competitors. But enough about me, hows the UK economy?..oh wait..

Inflation?

[Dr. Croccer]

The entire ''recession'' which involves marsbars becoming a little more expensive, is largely due to the inflation of the dollar and growth of the euro.

[Wodeson]

When America catches a cold, the rest of the world sneezes. China's the place to watch at the moment, they've been buying a lot of US Dollars over the last decade.

[Каие]

When America catches a cold, the rest of the world sneezes. China's the place to watch at the moment, they've been buying a lot of US Dollars over the last decade.

yet they are chilling...

[Mithie]

The reason "growth" has halted in recent times is mostly because the previous "growth" was nothing but hot air?

Do you really think all those money being mortagaged to expand property and cause the massive "growth" in the past years was actually there?

Or how about all those short sells of Gold in the Chinese market that drove up the prices and "growth" in the first place? Do you really think that money existed?

Hell no. And now, all of a sudden, we're not growing any more because we just found out the growths we've experienced in the past was nothing but a giant blob of cancer. This isn't a recent phenonmenon, people. It's the culmination of about a decade of total retardation regarding irresponsible mortages and short sells, i.e. using money that didn't exist in the first place.

We're not in a recession. The world isn't going to collapse. We DID just get chemotherapy and now we're in a state of slow recovery. This is a GOOD thing, and it's better that we lance the boil now than later.

It'll teach people not to be retarded with their investments and loans - the hard way.

The Asian market is FINE. There is not going to be a collapse. Japan is floundering for completely different reasons - none of them unexpected. The American market will stabalize within the year, and the European market... well, aside from a bunch of Englishmen worrying about the apocalypse just because of a few drops of rain, there's really no problem with the European market.