Liberal Burblings

Archive for the ‘Economy’ Category

Well, we somehow need to reverse or recompense any negative recession-related thoughts we had during April and May. Why? Because we weren’t in a recession in April and May. GDP was actually rising during those months. And, as a recession is normally defined as two consecutive quarters of negative growth, by my book that means the recession ended, appropriately, on April 1st! Trebles all round! Let’s see the BBC rolling out their special green upwards arrow graphic labelled “End of the Recession” (unlikely – good news on the BBC is normally confined to Springwatch and even that has enormously distressing blood and gore episodes in it).

However, that doesn’t mean we couldn’t now be plunging back into a recession, of course. Indeed, with Old Moore himself, Saint Vincent of the Cable Knit telling us to beware of an oil price hike, it is perfectly conceivable that there will be no “early bath” for the recession.

It’s smiles all round as a deal is agreed to repay the UK government for the retail deposits lost when Icesave collapsed. The UK will unfreeze Icelandic bank assets on June 15th. Phew. We can turn round the gunboats.

Councils will have to wait though – this deal only applies to retail accounts.

….or at least not terminally depressed.

Etched on my memory is the big red graph line going down behind the newsreaders on the BBC with headlines like “SHARE CRISIS” and “CREDIT CRUNCH”.

The media caravan has moved on with its scorched earth policy, to expenses and Susan Boyle.

But it would be nice if some attention is paid to some good news in the economy.

Honda Swindon reopened production today! Hurrah!

The Dow is up 200 points today, despite the GM bankruptcy!

The FTSE is up 2% also today – that’s up 4% or 180-odd points in the last five days.

Come on – let’s get a bit optimistic.

And at a local level, spending is going well. Only last Saturday my offspring came back from a shopping trip to announce: “I’ve been putting money back into the economy”.

General Motors filing for bankruptcy. Some clue as to why this has happened may be gleaned from this little slide show of the “GM Junk heap“. My favourite is the Hummer H2 (below) – what a disaster!

Mind you, they produced nothing as catastrophically disastrous as the Ford Edsel. Children used to point and laugh at that one in the street.

This berating of Gordon Brown in the European Parliament has “gone viral” and been watched by 1,400,000+ people on You Tube. I bet he was practising in front of his shaving mirror for days. I think he is a bit of a burke.

[youtube=http://www.youtube.com/watch?v=94lW6Y4tBXs&hl=en&fs=1]

Oh dear me. The BBC need to find out what the difference between “an index” and “a change in an index” is.

Yesterday, their bulletins were routinely announcing that the Retail Price Index is at its “lowest ever”.

Similarly, BBC Online stated:

But a sharp fall in mortgage repayments caused the Retail Prices Index (RPI), which includes housing costs, to fall to zero for the first time in 49 years.

Well, no actually. According to the Office for National Statistics, the Retail Prices Index is at 211.4. Far from zero.

What BBC Online should have stated is that “Retail Prices Index inflation” has fallen to zero for the first time in 49 years.

Similarly, those bulletins which hailed the “lowest Retail Prices Index ever” would have been more correct in saying that ‘last month the Retail Prices Index was the lowest since the previous month’. What they meant to say, I think, is that ‘the rate of change in the Retail Prices Index was the lowest ever’. But that is not so sexy is it?

The Office for National Statistics reported the situation correctly, as you would expect:

Retail Prices Index (RPI) inflation (my bolding) slowed to 0.0 per cent in February, down from 0.1 per cent in January

…RPI is the Retail Prices Index. The uses of the RPI and its derivatives include indexation of pensions, state benefits and index-linked gilts.

Inflation is the percentage change in the index compared with the same month one year previously.