Wow - deep topic!
Are we going to see a recession? I hope not. A recession is defined as 2 consecutive quarters of negative GDP growth. Q3 2007 showed a growth of around 0.8%, consistent with the past 12 months, so a full on recession would be a quite a shock.
Is there a problem with personal debt in this country? Yes, I think so. But then I'm risk averse. I don't have a credit card, but I am fortunate in that I don't need one. Culturally we have changed and personal debt is not only acceptable, it is expected, and I think this is a bad thing because debt compounds and most people do not understand this. Will this cause problems? Yes. More debt -> more personal bankruptcy -> higher cost of credit -> less purchasing power for the individual -> retail sales down ...
Housing market: market pricing interest rates at unch to slightly down in the next 6 months, which isn't a bad thing for a slow cooling, but if there are more credit crunch surprises this could have an effect. Changes in stamp duty would help bolster the housing market, as would a retail downturn. The worrying thing is the cost of getting a mortgage (arrangement fees etc.) has gone up a lot which could impact re-arrangement of mortgages, especially on buy to let, which might lead to sales. IF a sell-off starts, prices will fall, and quickly but you won't see it in the stats until a couple of months later (ie: when the stats based on sale-prices, as opposed to asking prices come out)
Russell has it on the head with fuel prices and strong pound being quite worrying bear signals, but there is still plenty of opportunity to make money in a declining economy. At the moment, I think we're uncertain - just check the volatility in the Equity markets right now - but a few days of -1% soon adds up if it's not chased back up the following day.
Blimey. Rant over. Sorry ...
Rampant Capitalist
Are we going to see a recession? I hope not. A recession is defined as 2 consecutive quarters of negative GDP growth. Q3 2007 showed a growth of around 0.8%, consistent with the past 12 months, so a full on recession would be a quite a shock.
Is there a problem with personal debt in this country? Yes, I think so. But then I'm risk averse. I don't have a credit card, but I am fortunate in that I don't need one. Culturally we have changed and personal debt is not only acceptable, it is expected, and I think this is a bad thing because debt compounds and most people do not understand this. Will this cause problems? Yes. More debt -> more personal bankruptcy -> higher cost of credit -> less purchasing power for the individual -> retail sales down ...
Housing market: market pricing interest rates at unch to slightly down in the next 6 months, which isn't a bad thing for a slow cooling, but if there are more credit crunch surprises this could have an effect. Changes in stamp duty would help bolster the housing market, as would a retail downturn. The worrying thing is the cost of getting a mortgage (arrangement fees etc.) has gone up a lot which could impact re-arrangement of mortgages, especially on buy to let, which might lead to sales. IF a sell-off starts, prices will fall, and quickly but you won't see it in the stats until a couple of months later (ie: when the stats based on sale-prices, as opposed to asking prices come out)
Russell has it on the head with fuel prices and strong pound being quite worrying bear signals, but there is still plenty of opportunity to make money in a declining economy. At the moment, I think we're uncertain - just check the volatility in the Equity markets right now - but a few days of -1% soon adds up if it's not chased back up the following day.
Blimey. Rant over. Sorry ...
Rampant Capitalist