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News from Sir Merv

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    News from Sir Merv

    Mervyn King: UK outlook has worsened due to eurozone debt crisis

    The news came as the country's public sector net borrowing rose much more than expected in May on a 7.3pc fall in income tax receipts.

    "In the last six weeks... I am very struck by how much has changed since we produced our May Inflation Report," Mr King told parliament's Treasury Committee.

    "I am pessimistic [about the eurozone outlook]. I am particularly concerned because over two years now we have seen the situation in the euro area get worse and the problem being pushed down the road," he said.

    His views came as public sector net borrowing increased by £17.9bn in May compared with a rise of £15.2bn in the same month one year earlier, the Office for National Statistics said in a statement. Analysts had forecast a borrowing rise of £15.7bn.

    "The main problem remains a sharp slowdown in tax receipts," said Vicky Redwood, chief UK economist at Capital Economics research group. "The combination of worsening public finances and renewed recession is likely to intensify calls for the government to change tack on its austerity programme."

    Howard Archer, chief UK and European economist at IHS Global Insight, added: "The May public finances make pretty bleak reading for the Chancellor. Only two months into the fiscal year, it is evident that Mr Osborne is facing a major battle to meet his fiscal targets for 2012/13 and is in grave danger of losing it.

    "While expenditure can fluctuate appreciably from month to month, it does suggest that the government is having trouble imposing its spending cuts. And if the spending cuts are yet to bite, the impact of this on the economy is yet to be felt, which is worrying for growth prospects."

    Britain's economy slipped into its second recession since the start of the financial crisis around the turn of the year and fears of a longer slump have been rising as companies hold back investment and exports suffer from the eurozone crisis.

    The central bank's Monetary Policy Committee voted 5-4 against buying more government bonds with newly created money to boost the economy, but most economists expect another round of quantitative easing in July. (AtW's comment: see now that Govt needs to borrow more they will print money, otherwise yields on bonds will be 6-7%)

    The government and the central bank announced two schemes on June 14 get credit flowing through the economy by lowering banks' funding costs.

    Policymakers Ben Broadbent and Spencer Dale - who both voted against more stimulus in June - as well as David Miles all indentified the eurozone debt crisis as the main threat to Britain's economy in their annual reports to parliament.

    Source: Mervyn King: UK outlook has worsened due to eurozone debt crisis - Telegraph

    DOOOOOOOOOOOOOOMED!

    #2
    It's pretty obvious what is coming next, printy printy.

    At least house prices will go up sharply, so we'll all better off in the end.

    Comment


      #3
      Originally posted by DimPrawn View Post
      It's pretty obvious what is coming next, printy printy.

      At least house prices will go up sharply, so we'll all better off in the end.

      Nope. They'll pretty much stay the same and devalue in real terms. We're all getting poorer that's for sure.
      ...my quagmire of greed....my cesspit of laziness and unfairness....all I am doing is sticking two fingers up at nurses, doctors and other hard working employed professionals...

      Comment


        #4
        Originally posted by Lockhouse View Post
        We're all getting poorer that's for sure.
        The rich aren't.

        Comment


          #5
          Originally posted by TimberWolf View Post
          The rich aren't.
          The lesson is to get rich.

          Post less tulip on CUK and do more billing hours.

          HTH

          Comment


            #6
            Originally posted by AtW View Post
            The lesson is to get rich.

            Post less tulip on CUK and do more billing hours.

            HTH

            The lesson is to get rich.

            Post less tulip on CUK and do more billing hours.

            Comment


              #7
              Originally posted by AtW View Post
              The lesson is to get rich.

              Post less tulip on CUK and do more billing hours.

              HTH
              How is your "expensive" contractor doing? Is he up to his first 1000 posts yet?
              Let us not forget EU open doors immigration benefits IT contractors more than anyone

              Comment


                #8
                Originally posted by DodgyAgent View Post
                How is your "expensive" contractor doing? Is he up to his first 1000 posts yet?
                He is doing good training that does not require computer connected to the Net

                Offering him longer term contract now ...

                Comment


                  #9
                  Thanks for reporting current developments AtW, but UK's economy is in a bad situation, has been for a few years, and will be for more years yet.

                  Incidentally, the idiot Blair said in an interview over the weekend that he still thinks the UK should join the Euro. WTF?

                  Comment


                    #10
                    Originally posted by Doggy Styles View Post
                    Incidentally, the idiot Blair said in an interview over the weekend that he still thinks the UK should join the Euro. WTF?
                    He actually said that possibility of UK joining euro in the future should not be ruled out.

                    Comment

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