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I am seriously worried about the state of the British economy where i live 40 percent are employed in the public sector in Swansea city ,they just announced cut back in services reduced wages ,my wife works in NH they removing services and still closing wards even if the government say that the nhs are not .I went shopping for the dreaded wife's Xmas pressie to the heart of town this scared me ok a bit of snow on the ground but it was a ghost town no cues no he pushing talked to staff very quiet, a WEEK before Xmas ,went to big out of town shopping centre quiet there as well.If major stores cant be busy this time of year the uk economy is in deep deep trouble.

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If major stores cant be busy this time of year the uk economy is in deep deep trouble.

Correct.. the UK economy has been in deep deep trouble for a number of year now with the biggest structural defecit since the war. This is despite some politicians (and some of the public) being in defecit denial.

Many people are however reining-in spending and are paying down debt.

From Markit report Sept 2010 just before the spending review...

"Concerns over pay and job security remain at the forefront of people's minds, while stubbornly high inflation and an impending VAT rise are becoming increasingly difficult to ignore," said Markit economist Tim Moore.

"Those working in the public sector reported the greatest degree of pessimism, perhaps because of a sense of unease ahead of next month's government spending review.

"Households have responded to the uncertain outlook by paying down debt, reining in their appetite for unsecured credit and delaying major purchases."

Edited by kar999
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2.75% Base rate ..... peice of Pish. Folks today don't know how lucky they are! :whistling: (Thu, 15 Nov 1979 17.00%)

Eeeeeeee when I were a lad we had it tough! If you were lucky enough to afford a shoe box t'live in t'mortgage were so high you had t'lick road clean wit tongue to have owt t'eat!

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp

Edited by kar999
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Not so sure that will happen - of course, it must happen, sometime ...

The BoE has purchased an awful lot of toxic paper; one way of getting rid of it is to inflate it away quietly without telling anyone .... hence low interest rates, and QE; and as the US/China continue in their race to devalue, it will hurt our exports and thus we face the risk of recessionary pressures once more. Not much choice but to sit in the middle of road like a rabbit staring at those headlights ... getting closer ....

Edited by VillagePlank
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2.75% Base rate ..... peice of Pish. Folks today don't know how lucky they are! :whistling: (Thu, 15 Nov 1979 17.00%)

Eeeeeeee when I were a lad we had it tough! If you were lucky enough to afford a shoe box t'live in t'mortgage were so high you had t'lick road clean wit tongue to have owt t'eat!

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp

Exactly, for many people a 'six fold' rise actuallt translates to 2-3% rise on their current very low rate. Even if this happens mortgage rates will still be incredibly low when considered in a long term historical perspective. Makes for nice hysterical headlines though................

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There are always winners and losers but having paid my mortgage off, higher interest rates would benefit me. As a net saver and with a marginal higher rate of tax of 40%. My savings and pension pots are being eroded by inflation like millions of others. You dont have to be rich to pay 40% if you include a few benefits in kind, car allowance etc. once you trip into that bracket ALL your savings interest gets hammered.

I hate tax on savings as it's tax on tax on an already taxed income. It's no wonder some people pish it all up the wall and then rely on benefits. :closedeyes:

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There are always winners and losers but having paid my mortgage off, higher interest rates would benefit me. As a net saver and with a marginal higher rate of tax of 40%. My savings and pension pots are being eroded by inflation like millions of others. You dont have to be rich to pay 40% if you include a few benefits in kind, car allowance etc. once you trip into that bracket ALL your savings interest gets hammered.

I hate tax on savings as it's tax on tax on an already taxed income. It's no wonder some people pish it all up the wall and then rely on benefits. :closedeyes:

"You don't have to be rich to pay 40%"

Aye right, dry your eyes and get on with it. Boo-hoo. You don't pay "40%", you only pay 40% on what you earn over and above what the rest of us pay on our less deserving salaries.

Also, you don't pay tax on your savings, you actually pay tax on the unearned income you receive from the interest from your savings. Big difference. You do not get taxed for having £1,000 in the bank, you pay tax on the £50 (if you're lucky) of what you earn (for nothing) from having the original £1,000 in the bank.

Get some perspective on the reality of how most people live. You evidently have no idea of how hard most people work to get far less than you earn. You are lucky. Stop bleating.

Edit: My total household income is approx £25k a year and I don't feel the need to whinge about it like you do. Also remember we could be living in one of the many places in the world that doesn't even have clean drinking water, let alone someone bleating because they have to pay a high rate of tax on their upper earnings. Give up your second holiday of the year! The vast majority of the world's population would laugh at you for your faux upset. Seriously buddy!! I'm really well off and I don't remotely fall into the higher 40% tax bracket. You need to get a grip.

Edited by CatchMyDrift
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My point was debating in this UK economic thread the issues about interest rates and inflation, not the rights and wrong of income levels of the worlds population. Almost all people in the UK, including those on benefits, are "rich" by some countries standards.

Get some perspective on the reality of how most people live. You evidently have no idea of how hard most people work to get far less than you earn. You are lucky. Stop bleating.

Actually I do have a very good perspective... believe me, I DO know despite your presumptions of my undertstanding. I'm not bleating. I've always paid taxes (and NI) all my long, and not always easy, life through long hours and very hard graft. I'm not a rich toff. My grandfather was a pit labourer. A household income of c. £40K is hardly rich by todays standards when union leaders and hundreds of thousands of champagne "socialists" are getting £100-£150k+ p.a.

Every single penny of interest, from money I have managed to save (after tax) through thrift, towards my old age is being taxed at 40% and also eroded by inflation. High inflation and low interest rates are bad news for many people on fixed incomes who rely on savings such as pensioners or even people made redundant both rich or poor or higher and lower tax payers. Anyone who has managed to be thrifty or hard working and saved more than £16k (that's not a lot to last a retirement) is also worse off as they are unable to claim means tested benefit.

That was the point of my post..Inflation, tax and interest rates.. Thanks

Edited by kar999
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Well went top town this morning and was first surprised how quiet the roads were and lack of people at the bus stops. Town itself considering the 2nd day of sales was extremely quiet looking like a poor day Saturdays shopping. More people came out later around twelve but still the town centre was far from heaving and was fairly quiet. I presume many have gone to the out of town shopping centres like meadow hall.

I'm going to be very surprised when the figures are in that it has been a good xmas.

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"You don't have to be rich to pay 40%"

Aye right, dry your eyes and get on with it. Boo-hoo. You don't pay "40%", you only pay 40% on what you earn over and above what the rest of us pay on our less deserving salaries.

Also, you don't pay tax on your savings, you actually pay tax on the unearned income you receive from the interest from your savings. Big difference. You do not get taxed for having £1,000 in the bank, you pay tax on the £50 (if you're lucky) of what you earn (for nothing) from having the original £1,000 in the bank.

Get some perspective on the reality of how most people live. You evidently have no idea of how hard most people work to get far less than you earn. You are lucky. Stop bleating.

Edit: My total household income is approx £25k a year and I don't feel the need to whinge about it like you do. Also remember we could be living in one of the many places in the world that doesn't even have clean drinking water, let alone someone bleating because they have to pay a high rate of tax on their upper earnings. Give up your second holiday of the year! The vast majority of the world's population would laugh at you for your faux upset. Seriously buddy!! I'm really well off and I don't remotely fall into the higher 40% tax bracket. You need to get a grip.

I think you have just lost a lot of respect on here with that reply. The 'green eyed monster' comes to mind! What an unpleasant, agressive attack on a what was a reasonable point in the context of this thread.

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Spare a thought for NI where the inefficiency of water companies means no water for a lot of people for quite a time. This could well happen here as well as cuts and pressure to pay the share holders mean repairs are left to the last minute.

Looking at the state of the roads I'm glad Sheffield still has money to repair them other wise we wouldn't have a road structure. Of course long term repairs will be undone by poor work by the utility companies but that's the price your pay for going for the cheapest contractor.

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I was very much wondering what peoples views were on 2011 for the UK, so feel free to post them up.

Personally I feel it's a difficult year to judge due to so many factors coming into play.

We've got VAT increasing and taxes increasing Most people will see earnings either frozen or down( http://www.bbc.co.uk/news/business-12082884 ).

The CIPD and Government ODR both predict that unemployment will increase this year.

We also have house prices struggling and some pretty high (relative) inflation.

All of which will eat into the UK's ability to grow.

So if we can't grow internally how can we grow ?.

Well we can increase stocks, companies might invest heavily or we might see a continued increase in exports, particularly as I am positive that imports will decline this year.

Interest rates are low and companies with good credentials will find it very easy to borrow to expand and invest which should help competiveness nad productivity in the medium term as will lower wages.

In many respects we are seeing the UK responding well to the new global situation we find ourselves in.

However the UK is very much a global player still and the wider global and european happenings will effect us greatly.

Firstly we have the impact on raw materials such as metals, cotton, food prices etc on the UK and inflation inparticular.

Secondly we have the impact on sterling of the flight of money into more stable currencies (witness the new record high of the swiss franc).

Thirdly we still have the European debt crisis, this has only been postponed until the next political crisis or set of above expected borrowing figures are produced from portugal, spain, italy, france.

Forthly we still have a US Economy that is dependent on government borrowing and debt, house prices in the US are still falling (see the latest monthly figures), you can't help but think that the US is overdue a wake up call as it needs to go through the same adjustment process as the European countries and the UK (i.e reduced growth, reduced govt spending, reduced real wages etc to start competing again). GM was a very good example of this where productivity was massively improved in the US factories by reducing overly nice pensions, raising retirement ages and freezing or reducing pay.

Finally we have the Far East factor. China, India etc are becoming over heated with money supply restrictions in force, China has to be singled out as it continues to struggle to control it's economy, this struggling with only increase IMO as it becomes more and more open to markets, as it grows and as it's population become more afluent.

On top of all this we have a number of global potential crisis such as Korea, Iran etc.

Notice I didn't include a banking crisis in the above, IMO this is most likely to come fro sovereign debt issues and so is increasingly more unlikely for the UK as banks continue to offload and downsize in vunerable countries such as Spain.

There might be a secondary impact if the likes of Soc Gen etc are impacted but I wouldn't rate this as overly likely this year and view it more as an impact for 2012.

In total I would be surprised to see growth of more than 1.5% this year, and equally surprised to see less than 0.5%.

Inflation will be an issue for the entire year IMO and government borrowing will likely be higher than planned.

So overall a weak year but nothing dramatic, the realyl dramatic stuff it likely to happen away from our little island.

Edited by Iceberg
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I was very much wondering what peoples views were on 2011 for the UK, so feel free to post them up.

Personally I feel it's a difficult year to judge due to so many factors coming into play.

We've got VAT increasing and taxes increasing Most people will see earnings either frozen or down( http://www.bbc.co.uk...siness-12082884 ).

The CIPD and Government ODR both predict that unemployment will increase this year.

We also have house prices struggling and some pretty high (relative) inflation.

All of which will eat into the UK's ability to grow.

So if we can't grow internally how can we grow ?.

Well we can increase stocks, companies might invest heavily or we might see a continued increase in exports, particularly as I am positive that imports will decline this year.

Interest rates are low and companies with good credentials will find it very easy to borrow to expand and invest which should help competiveness nad productivity in the medium term as will lower wages.

In many respects we are seeing the UK responding well to the new global situation we find ourselves in.

However the UK is very much a global player still and the wider global and european happenings will effect us greatly.

Firstly we have the impact on raw materials such as metals, cotton, food prices etc on the UK and inflation inparticular.

Secondly we have the impact on sterling of the flight of money into more stable currencies (witness the new record high of the swiss franc).

Thirdly we still have the European debt crisis, this has only been postponed until the next political crisis or set of above expected borrowing figures are produced from portugal, spain, italy, france.

Forthly we still have a US Economy that is dependent on government borrowing and debt, house prices in the US are still falling (see the latest monthly figures), you can't help but think that the US is overdue a wake up call as it needs to go through the same adjustment process as the European countries and the UK (i.e reduced growth, reduced govt spending, reduced real wages etc to start competing again). GM was a very good example of this where productivity was massively improved in the US factories by reducing overly nice pensions, raising retirement ages and freezing or reducing pay.

Finally we have the Far East factor. China, India etc are becoming over heated with money supply restrictions in force, China has to be singled out as it continues to struggle to control it's economy, this struggling with only increase IMO as it becomes more and more open to markets, as it grows and as it's population become more afluent.

On top of all this we have a number of global potential crisis such as Korea, Iran etc.

Notice I didn't include a banking crisis in the above, IMO this is most likely to come fro sovereign debt issues and so is increasingly more unlikely for the UK as banks continue to offload and downsize in vunerable countries such as Spain.

There might be a secondary impact if the likes of Soc Gen etc are impacted but I wouldn't rate this as overly likely this year and view it more as an impact for 2012.

In total I would be surprised to see growth of more than 1.5% this year, and equally surprised to see less than 0.5%.

Inflation will be an issue for the entire year IMO and government borrowing will likely be higher than planned.

So overall a weak year but nothing dramatic, the realyl dramatic stuff it likely to happen away from our little island.

I believe the UK is likely to see v low levelsof economic 'growth' - over the next few years (maybe longer) i see periods of growth of around 1.5% but other periods of at or around 0.5% - maybe even close to 0% -

fairly stagnant, maybe even close to 'Japan-style' levels seen in last 10-15 years there.

House prices will continue to drift lower before stabilising in 2013 (not a bad thing in my view - eventually it will bring more people 'on to the ladder' if they're in relatively secure employment).

Interest rates will rise slowly thru' back end of 2011, into 2012 - prob settling at around 2.5%.

Public sector job losses will not be so severe as first thought - mainly because govts normally lose their bottle as time goes by (further into a parliament) - and there's always the chance the coalition will fail.

There are many private sector co.s sitting on piles of cash, i would expect consolidation across many sectors in next few years as mergers reign.

Across the channel, the Eurozone will continue to fudge and patch - but it wouldn't surprise me to see some of the 'lesser' countries return to their own currencies.

I would expect a widening of the income gap, between the well-off and the poorer elements of UK society - there are many of the middle classes and above, in well-paid employment - ignore the sensationalist headlines - these people have been and are, pretty shrewd at stashing income in various 'vehicles' - they may have to belt-tighten but those households earning £75-80K plus will not do without - they'll just re-prioritise and many in the higher end of this bracket (go above £120K now) are the wealth creators. They basically drive the economy (the SE will continue to prosper - cross london rail, olympics construction, the City, etc)

Much more i can add - may do later

Regards

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Spam Alert. You've posted it before PP.

Repeats, repeats, repeats.... that's all you get nowadays. First it was Christmas telly.... now it's bloomin' You Tube.

I thought the hamster might die before it got to five when I watched it this time. A bit like Steve McQueen clearing the barbed wire on that motorbike in The Great Escape .. if you watch it enough, by the law of averages, he's bound to manage it one day. :whistling:

"Take me with you... I can see.."

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Sterling is falling heavily against the Aussie and the Kiwi dollar. When we emigrated to NZ in 2006 you got NZD3 to the GBP. Today you get less than NZD2 to the GBP. A devaluation of 33%! Reading various commentary over the holiday period suggests that things are going to get a whole lot worse in 2011!

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Spare a thought for NI where the inefficiency of water companies means no water for a lot of people for quite a time. This could well happen here as well as cuts and pressure to pay the share holders mean repairs are left to the last minute.Looking at the state of the roads I'm glad Sheffield still has money to repair them other wise we wouldn't have a road structure. Of course long term repairs will be undone by poor work by the utility companies but that's the price your pay for going for the cheapest contractor.

Northern Ireland Water is a State owned Company and was recently found by the water regulator to be 40% less effecient than the privtised companies in England and Wales despite it's spending being £6m over budget in 2009-10.

No comfort to those without water (who happen to all be stakeholders ....)

Edited by kar999
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Sterling is falling heavily against the Aussie and the Kiwi dollar. When we emigrated to NZ in 2006 you got NZD3 to the GBP. Today you get less than NZD2 to the GBP. A devaluation of 33%! Reading various commentary over the holiday period suggests that things are going to get a whole lot worse in 2011!

The devaluation of GBP is not an accident ....

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....as where I live, driving isn't really a choice. However, if there wasn't duty, the government would simply take thousands of pounds from each of us another way.

Cue PP Peak Oil/Monetary reform post..... :whistling:

....as where I live, driving isn't really a choice.

Ditto.... and excessive Road Tax on 4X4's. Not 4.5ltr petrol guzzling city school run Chelsea Tractors but basic diesel workhorses without which, life would have been impossible for some rural workers on some of our tracks and untreated roads last month.

My heart really went out for those holiday makers moaning because they couldn't get to the Bahamas for Christmas when Heathrow was closed with snow. I was just grateful for the District Nurses who managed to struggle on and managed to visit & treat Mrs Kar 3 times a week.

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Cue PP Peak Oil/Monetary reform post..... :whistling:

Ditto.... and excessive Road Tax on 4X4's. Not 4.5ltr petrol guzzling city school run Chelsea Tractors but basic diesel workhorses without which, life would have been impossible for some rural workers on some of our tracks and untreated roads last month.

Slightly off the economy topic but the Tax on my 4X4 Jeep is only the standard rate whatever that is now @200 and more surprising to me was that my 3.2 ltr petrol car is the same and they are both gas guzzlers.
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Road tax as it stands is a ridiculous way to tax driving anyway as it does not take into account milage. Someone could drive VW Polo Bluemotion and do 20,000 miles a year and pay no road tax whereas someone with a 4x4 could do 2,000 miles per year and pay over £400.

If they're serious about reducing consumption they'd be better lumping it all on Petrol/Diesel, that way the more you drive the more you pay. It would also solve the people illegally not taxing their cars too, as they'd have no choice.

It wont ever happen though, governments love calling the same taxes different names to make it sound more palletable. National Insurance and PAYE are another example.

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