Property prices are sky high. Inflation is on the rise. The pound is so strong that domestic industries are struggling to compete on a global level. Big businesses are either out sourcing, or moving there operations overseas. The bank of England is rumoured to be planning yet another rise in interest rates. Are we on the cusp of another recession? It was revelled last week that 2006 saw record high numbers of mortage forclosures. Is the super heated property bubble set to burst, leaving countless home owners in negative equity as we saw in the early ninties?
What do you think?
Send your answers on a postcard.... or you could just fill in the box below.
2007-02-06 03:07:53 · 6 answers · asked by Anthony R 3 in Social Science ➔ Economics
Good Answer Cruz. Here's another question. Does anybody think that the government may intentionally gearing up for recession. Using it as a tool to achive long term economic gain?
2007-02-06 03:28:18 · update #1
I think the falling yield curve in the UK is another indicator that a recession could be around the corner.
"Stagflation" is the term used to describe high inflation combined with falling output. It is unlikely that inflation is going to get completely out of control (due to the independent Bank of England), and hence the most likely scenario is rising unemployment and a recession.
This will lead eventually to falling property prices, mortgage defaults, and negative equity.
Needless to say this is likely to occur long before the press start reporting it is happening already.
2007-02-06 03:33:12 · answer #1 · answered by James 6 · 1⤊ 0⤋
Depends on where you live. The Big 3 banks (EU Central Bank, Bank of England, the US Federal Reserve) are all pursuing different monetary polices at the moment.
The most recent US growth numbers were good, and inflation was actually down --- the Fed held rates constant.
The EU and Bank of England are pursuing a "slow-down" policy by indicating they're not yet done raising rates. In other words, they're still worried about inflation.
This has caused the Euro and Pound Sterling to strengthen with regards to the dollar and hurt European exports, so in a way it is a self-fulfilling prophecy.
Economic forecasting is a tricky thing; but I see more of a 1995-type slowdown than a 2001-type recession.
2007-02-06 14:36:23 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I know this sounds nasty but I think the UK needs a recession. then at least/hopefully people who can't afford to buy will be able to. I know it will be hard on those with negative equity but hey that the house market for you. As Mrs Thatcher (in retirement) once said if you buck the market sooner or later the market will buck you back. it would also make the UK more attractive for business and maybe less attractive to immigrants.
2007-02-06 11:16:28 · answer #3 · answered by Cruz 4 · 1⤊ 0⤋
I think we are on our way to a recession but it won't rear it's ugly head until mid 08 through mid 09 to be a starting time for the numbers to sufficiently negative earnings wise. It will be absolutely ugly if my projections are correct.
2007-02-06 11:13:29 · answer #4 · answered by fade_this_rally 7 · 0⤊ 0⤋
If our bankers, funding the war that Congress did not authorize, decide to pull the financial rug out from under us for any reason (say they don't like the U.S. invading Iran), the dollar will crash. That will be a depression.
2007-02-06 11:35:05 · answer #5 · answered by H. Scot 4 · 0⤊ 0⤋
Have you had a look around the corner to find out yet.
2007-02-07 18:40:08 · answer #6 · answered by SAMANTHA H 3 · 0⤊ 1⤋