UK Economy

[TF S4DK]

Did you really just send me a link to what going on in Germany? Fuck off I ain't German. I'm talking about here and you send me a link to Germany, lmao.

[TF S4DK]

Did you really just send me a link to what going on in Germany? Fuck off I ain't German. I'm talking about here and you send me a link to Germany, lmao.

[Supermalt]

The UK recession has deepened, latest official figures have shown, after the output of the economy fell by 0.7% between April and June.

The contraction was much bigger than expected and follows a 0.3% drop in the first three months of the year.

The Office for National Statistics said the fall was largely due to a sharp slowdown in the construction sector.

It said it was not yet sure of the size of the effect of the poor weather and the extra June bank holiday.

This means that these figures, which are the first estimate for what happened in the economy between April and June, are more uncertain than usual.

"The bottom line from all this is that the underlying performance of the economy was probably somewhat better than the headline figure of -0.7% would suggest, having regard to the extra bank holiday and to the poor weather," said Joe Grice from the ONS.

"How much that effect might be is something we won't be able to say or to quantify until we have further experience against which to judge."

The figures could be revised in the coming months as more information comes in. The first estimate is largely based on information the first two months of the three-month period.

"Nevertheless, the overall picture is of an economy that remains fragile," the ONS said in its latest analysis of the economy.

http://www.bbc.co.uk/news/business-18977084

f*cked

[dub]

http://www.guardian....rate-rogues-tax

At the other end of the spectrum though, things are going swimmingly. The richest 1,000 people in Britain have seen their wealth increase by £155bn since the crisis began – more than enough to pay off the whole government deficit of £119bn at a stroke. Anyone earning over £1m a year can look forward to a £42,000 tax cut in the spring, while firms have been rewarded with a 2% cut in corporation tax to 24%.

[TF S4DK]

In a recession, of couse you will get rich tho, opporutunities arise for those with money to move in and capitalize.

[Kurtis]

dumb question (im like KS2 with finance sh*t)

do banks have to buy money from the bank of england or are they given it?

or do they rely solely on customer deposits and investments?

where does the money come from? i know it circulates, but if i wanted to start a bank tomorrow, would i just need a hell of alot of investment?

[Mame Biram Diouf]

UK Corporation Tax revenue down by 9% for the year

Maybe now these MNC will actually be forced to start paying tax here

[TF S4DK]

They won't or they will leave.

They have the power.

/

Things gonna start like they are or get worse until 2014. Election year and the break up of the coalition should see a let up.

[Captain Planet]

House prices UK wide down 2% but in London up 1%

It's going to be hard out here but bring on the challenge

[Mame Biram Diouf]

They won't or they will leave.

They have the power.

/

Things gonna start like they are or get worse until 2014. Election year and the break up of the coalition should see a let up.

They wont leave they make too much money here

Cant just go an relocate their business to Gambia and co

They need the city and high disposable income

(In reference to someone like Starbucks)

Not like we are a high manufacturing company where you can just relocate to other countries with cheap labour

Our labour market is highly skilled

I reckon they would swallow up and pay at least in the short term anyway

[TF S4DK]

They would threated to leave, in reality they probably wouldn't, but they would have to cut stores.

Which = cutting jobs and people paying tax and adding people to the benefit system.

[Mame Biram Diouf]

Could go the other way too though

[TF S4DK]

How?

[Mame Biram Diouf]

They are forced to pay corporation tax

Government receives more money

They then use the money collected from these MNC to either invest in Education (develop more skilled workers), Small Businesses (fund new enterprises) which will hopefully in turn create more jobs, and many other positive things it could be invested into such as even greater tax breaks for smaller businesses so they can expand incumbent operations which would also mean recruiting more staff

[TF S4DK]

You do they aren't doing nothing illegal right? So they can't be forced...

They have paid in the past, but have figured out their accounting can get creative to reduce payments/make none at all.

[Mame Biram Diouf]

You do they aren't doing nothing illegal right? So they can't be forced...

They have paid in the past, but have figured out their accounting can get creative to reduce payments/make none at all.

I know its not illegal it is just morally wrong and these loopholes should not exist

The big companies should not get away with it just because they can afford the better lawyers and accountants where as the smaller to medium firms suffer and have to pay

[TF S4DK]

TBH some smaller and medium firms do the same...

The difficulty is just like in the case of Starbucks, proving it.

The issue, well my issue, isn't even the creative accounting per say tbh, it happens. It's the pressure they and other companies lean on the taxman to get standard tax %'s reduced to their own particular rate, that suits them.

[dub]

http://www.huffingtonpost.com/2012/09/20/microsoft-taxes-profits-offshore_n_1901398.html

The US is starting to wise up on sh*t too.

What is the way around this stuff though? Where are the proposes regulation changes?

[Kurtis]

dumb question (im like KS2 with finance sh*t)

do banks have to buy money from the bank of england or are they given it?

or do they rely solely on customer deposits and investments?

where does the money come from? i know it circulates, but if i wanted to start a bank tomorrow, would i just need a hell of alot of investment?

 

ite that wasnt answered but w/e

 

/

 

Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement

 

 

Most Ph.D. students spend their days reading esoteric books and stressing out about the tenure-track job market. Thomas Herndon, a 28-year-old economics grad student at UMass Amherst, just used part of his spring semester to shake the intellectual foundation of the global austerity movement.

Herndon became instantly famous in nerdy economics circles this week as the lead author of a recent paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," that took aim at a massively influential study by two Harvard professors named Carmen Reinhart and Kenneth Rogoff.  Herndon found some hidden errors in Reinhart and Rogoff's data set, then calmly took the entire study out back and slaughtered it. Herndon's takedown — which first appeared in a Mike Konczal post that crashed its host site with traffic — was an immediate sensation. It was cited by prominent anti-austerians like Paul Krugman, spoken about by incoming Bank of England governor Mark Carney, and mentioned on CNBC and several other news outlets as proof that the pro-austerity movement is based, at least in part, on bogus math.

We spoke to Herndon about his crazy week, and how he's planning to celebrate his epic wonk takedown.

"This week has been quite the week," Herndon told us in a phone call from UMass Amherst's campus. "Honestly, I was not expecting at all the kind of attention it has received."

Herndon, who did his undergraduate study at Evergreen State College, first started looking into Reinhart and Rogoff's work as part of an assignment for an econometrics course that involved replicating the data work behind a well-known study. Herndon chose Reinhart and Rogoff's 2010 paper, "Growth in a Time of Debt," in part, because it has been one of the most politically influential economic papers of the last decade. It claims, among other things, that countries whose debt exceeds 90 percent of their annual GDP experience slower growth than countries with lower debt loads — a figure that has been cited by people like Paul Ryan and Tim Geithner to justify slashing government spending and implementing other austerity measures on struggling economies.

Before he turned in his report, Herndon repeatedly e-mailed Reinhart and Rogoff to get their data set, so he could compare it to his own work. But because he was a lowly graduate student asking favors of some of the most respected economists in the world, he got no reply, until one afternoon, when he was sitting on his girlfriend's couch.

"I checked my e-mail, and saw that I had received a reply from Carmen Reinhart," he says. "She said she didn't have time to look into my query, but that here was the data, and I should feel free to publish whatever results I found."

Herndon pulled up an Excel spreadsheet containing Reinhart's data and quickly spotted something that looked odd.

"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49."

What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

Herndon was stunned. As a graduate student, he'd just found serious problems in a famous economic study — the academic equivalent of a D-league basketball player dunking on LeBron James. "They say seeing is believing, but I almost didn’t believe my eyes," he says. "I had to ask my girlfriend — who's a Ph.D. student in sociology — to double-check it. And she said, 'I don't think you're seeing things, Thomas.'"

The mistakes Herndon found were so big, in fact, that even Herndon's professors didn't believe him at first. As Reuters reported earlier:

"At first, I didn't believe him. I thought, 'OK he's a student, he's got to be wrong. These are eminent economists and he's a graduate student,'" [uMass Amherst professor Robert] Pollin said. "So we pushed him and pushed him and pushed him, and after about a month of pushing him I said, 'Goddamn it, he's right.'"

After consulting his professors, Herndon signed two of them — Pollin and department chair Michael Ash — on as co-authors, and the three of them quickly put together a paper outlining their findings. The paper cut to the core of a debate that has been dividing economists and politicians for decades. Fans of austerity believe that governments should cut spending in order to grow their economies, while anti-austerians believe that government spending in times of economic duress can create growth and reduce unemployment, even if it increases debt in the short term. What Herndon et al. were claiming, in essence, was that the pro-austerity movement was relying on bogus information.

When Herndon and his professors published their study, the reaction was nearly immediate. After Konczal's blog post went viral, Reinhart and Rogoff — who got a fawning New York Times profile when their book was released — were forced to admit their embarrassing error (although they still defended the basic findings of their survey). And today, another UMass Amherst professor, Arindrajit Dube, followed up on Herndon's paper with additional proof that there were serious theoretical and causal problems (as opposed to just sloppy Excel work) in the Reinhart-Rogoff study. Observers have been raising serious questions about what Herndon's work means for the future of austerity politics, and Reinhart and Rogoff's respectability as scholars.

Herndon says he isn't implying that Reinhart and Rogoff intentionally skewed their data to support a pro-austerity finding, and simply reported the errors.

"I don’t want to sound the alarm and call for anyone’s jobs," he says. "I didn’t do this to be punitive or malicious."

With Reinhart and Rogoff's once-authoritative work now under serious question, there's no question that the austerity movement has been dealt a major blow. But Herndon's finding won't likely stop politicians from trying to reduce the deficit. The global march for austerity began before Reinhart and Rogoff's work was published, and will continue as long as there are people who believe that governments can shrink their way to prosperity.

Still, Herndon holds out hope. He calls austerity policies in the United Kingdom and elsewhere "counterproductive," and implies that part of why he took up the study of Reinhart and Rogoff's study was to question the benefits of current economic policy. "I have social motivations," he says. "I care deeply about how policy affects people."

Now that he's left his mark, Herndon says he's coping with the effects of academic celebrity — getting a new publicity head shot taken, receiving kudos from his professors and colleagues, handling interview requests. He says he's gotten extensions on some of his papers in order to handle his quasi-fame, but that he hasn't been popping Champagne yet in celebration.

"I’m going to celebrate this weekend," he says. "But for now, I have a really gnarly problem set."

 

 

http://nymag.com/daily/intelligencer/2013/04/grad-student-who-shook-global-austerity-movement.html

[dub]

nice - but it won't change the way politicians think - it just means they'd have to come up with new excuses for fucking over the lower classes

[dub]

UK 'great recession' almost over, says thinktank

Economy will regain pre-recession peak in next few months but GDP and output per capita has long way to go, says NIESR

 

Britain is finally shaking itself free of the grip of the "great recession", a leading thinktank has claimed, as it said the economy was on the cusp of returning to its pre-crisis strength.

 

The National Institute of Economic and Social Research (NIESR) forecast benign inflation and falling unemployment, and said that the UK economy will regain its pre-recession peak in the next few months.

 

"It is quite important symbolically that the economy is, or will very shortly be, bigger than it was in 2008," its director, Jonathan Portes, told BBC radio.

 

"But, as far as individuals are concerned, what really matters is how rich we are – per capita GDP – and that's well below the level of 2008 and won't get back to its previous level for a couple of years."

http://www.theguardian.com/business/2014/may/09/uk-great-recession-almost-over-niesr-economy