MercoPress. South Atlantic News Agency
UK remains deep in recession: even the services sector contracted
Britain's economy shrank far more than expected in the second quarter, battered by everything from an extra public holiday to government spending cuts and the neighbouring Euro zone crisis. Read full article
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Disclaimer & comment rulesDeep in recession? For the love of God (or wherever other mythical creature appeals) invest in a dictionary.
Jul 25th, 2012 - 08:08 pm - Link - Report abuse 0Why no coments on this one?. If it were about Argentina all the islanders would be howling with joy. But sadly this is about the UK which had to borrow over £13 billion pounds just last month, and is forcast to borrow over £120 billion for the year. It is one down grade away from seeing the interest it pays on its debts skyrocket . More cuts will follow and the double dip recession they are in could well become a depression. This is not good news for Britain or any country trading with it. But you don't see any Argentines on here cheering and laughing at the uks problems. Perhaps the Argentines are just more mature.
Jul 25th, 2012 - 08:14 pm - Link - Report abuse 0In short people in glass houses should not throw stones.
1 Yomper
Jul 25th, 2012 - 08:48 pm - Link - Report abuse 0Is it “Deep” or “recession” that you are not happy with?
invest , invest , invest ,
Jul 25th, 2012 - 10:13 pm - Link - Report abuse 0Austerity isn't working
Jul 25th, 2012 - 11:28 pm - Link - Report abuse 0The British care more about the argie economy than theirs that's why they are not here, they should be here discussing this. A 0.7% drop for a developed country with low population growth is a huge contraction.
Jul 26th, 2012 - 01:41 am - Link - Report abuse 0Like I predicted, the UK back in recession and it is going to be deep. But hey, you got those new glizty carriers coming on... hahahaha.
Talk about priorities, I mean lack of.
@ 2 I am Argentine and I want to laugh at the British .. we work every day trying to have a better country for our children,,,, slowly we are getting there .. http://www.prensa.argentina.ar/listado.php?id=13
Jul 26th, 2012 - 03:34 am - Link - Report abuse 0I feel deeply sorry for the gentle-souled UK bloggers on Mercopress. They always post such kind stuff on South America when our countries go through difficulties. It's disheartening to see the UK in this condition.
Jul 26th, 2012 - 04:13 am - Link - Report abuse 0@British_Kirchnerist
Jul 26th, 2012 - 10:01 am - Link - Report abuse 0Yeap! Austerity on a depressed economy never works only cause pain to the poor and middle class people while the top ten percent richer increase their wealth.
I don’t understand why Britons don’t realise that they are going down the drains like Spain.
If they would have invested the taxpayer money to promote industries, jobs and to keep consumption instead to save corrupt bankers they will be in the path of recovery.
In short they should have bailed out the people NOT the bankers
Jul 26th, 2012 - 11:46 am - Link - Report abuse 0NObody in UK can deny they clearly have problems, but unlike some Europeans they have made the cuts needed to get things going a better direction when the world and european economy returns to better days.
Jul 26th, 2012 - 11:46 am - Link - Report abuse 0After all UK still has strong currency, low inflation, cheap interest loans, growing employment opportunites in the private sector (over 1/2million new jobs created Jan-March 2012).DannyB - they are boosting jobs- £40billion over the next few years for a start.
It is perhaps not total doom - but hell, as all over the world the papers and opposition politicians will say it is!
@argento74
Jul 26th, 2012 - 12:30 pm - Link - Report abuse 0I am neither British nor Argentina and I want to laugh at the Argentinians who believe the La Plata whore when she claims that the world's third most bonking economy is actually improving. Christ, you even make Spain look like a boom economy :)
@yomp Yours is exactly the kind of mindless coment i was reffering to at the beginning. Calling another countrys president a whore is the action of a retard.
Jul 26th, 2012 - 02:53 pm - Link - Report abuse 0It is the poor in both countrys that will suffer the most from this economic mess and the knock on effects are global. Things in both countrys will probably get alot worse before any improvement is seen or felt on the ground.
Austerity has worked in reducing the country's debt significantly. However, it is now time fr a change in policy to generate growth without throwing money at populist policies. The last government NEW Labour (not to be confused with the Labour Party) did that for a decade and spent ridiculous amounts of money they did not have.
Jul 26th, 2012 - 02:57 pm - Link - Report abuse 0The big difference is that the UK has the ability to pay debts and borrow money at very low rates. This can be used to instigate growth. Not an option for Argentina.
And please, unless you have actually spent time in the UK and Argentina, don't make yourself look foolish by making simplistic comparisons. There is no comparison between the situations or countries. Argentina is a once developed - squandered it away - now a developing country and that is the reality. If you could elect a decent government, develop a work ethic and make corruption socially unacceptable you could be a great nation again.
@ ElaineB
Jul 26th, 2012 - 04:00 pm - Link - Report abuse 0What happen with you? Do you have an understanding problem or what?
“The big difference is that the UK has the ability to pay debts and borrow money at very low rates. This can be used to instigate growth”
But UK is borrowing money to pay debt and making cut that are cooling even more the economy.
And I know more abut UK than seems you do and what you say is not true UK debt is even bigger and unemployment even worse and going into a new recession.
The total debt of UK is close now to USD 12 trillions 2,2 trillions owned domestically denominated in British Pounds by the govt. plus an external debt (denominated in foreign currencies) of USD 9,836 trillions to international lenders.
Just 3er biggest debt in the world after the whole European Union (16 trillions) and US with 14,7 trillions.
So total UK debt is 5 times current UK GDP the worst ratio gdp/debt in the world.
Spain is close to collapse for a debt of USD 2,6 trillions having a GDP of USD 1.5 trillions and Italy going same path.
Now as you seem to be an expert on international finances how UK is going to pay a debt of USD 12 trillions while going into recession again?
Do not bother there is not way to pay that debt with a little GDP as Britain has.
Elaine
Jul 26th, 2012 - 04:21 pm - Link - Report abuse 0Well said
BK
Saying austerity isn’t working is so pointless. It is like a lush, who has spent the family silver on good times and boozing; being forced to cut down on the drink and proclaiming, “this isn`t working”. It isn’t working in the sense that you are poorer than before, but that is because you squandered what you had, not because you have been forced to cut back.
Investing more is fine, but it can only be done responsibly by bringing forward already-budgeted productivity enhancing projects. New spending or white elephant projects will make things worse not better. Look at all the brand new airports in small Spanish towns if you need a reminder.
A real dose of reality is required in public services. Any country that provides “designer vaginas” on the national health service is either not trying or not wanting to come to terms with cuts (excuse the pun) that need to be made. I couldn’t believe the designer vagina story, you just couldn’t make it up:
http://www.bbc.co.uk/news/health-14627659
Haven't you folks realized that they (Camoron, Arseborne and the gang) works for the banksters?
Jul 26th, 2012 - 06:10 pm - Link - Report abuse 0No matter what they do, They are trapped in their debt that continues to rise.
You cannot solve the debt problem with more debt, no matter how many times or what tools you use to manipulate the game that benifits the zombie banks.
But ach, keep paying attention to the falklands and enjoy the olympics.
Do you know what distinguishes our Economic woes from theirs?
Jul 26th, 2012 - 06:15 pm - Link - Report abuse 0We know it is happening and are trying to do something about it.
They on the other hand refuse to believe it is happenining or bury their heads in the sand hoping it will go away.
The reality is people,
Jul 26th, 2012 - 09:03 pm - Link - Report abuse 0That most of you Argies don’t care one way or another,
And its your anti British hated that blinds you,
The UK is not the only country that has problems,
There are many better of , and just as many worse of,
We are trying to get out of it,
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
So you should understand to that very fact,
That if Europe goes down the drain, [you laugh]
If Britain follows [you laugh even more]
If the united states goes down,[you start to cry]
And when the west collapses,
You then [to late] understand that argentina has also gone down the drain, with half the world,
And you will suffer just as much, if not even more,
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
So before you put your anti British, before ya brain into gear,
You should remember that,
Besides we aint that worse of, just yet,
Its all in the lap of the ?? gods
.
“UK remains deep in recession”
Jul 27th, 2012 - 02:42 am - Link - Report abuse 0Hip, Hip, Hooray!
@Condorito
Jul 27th, 2012 - 04:43 am - Link - Report abuse 0Austerity works when you have a manageable debt for example you earn 100k at year and you owe 40k so you through austerity and not coming into more new debt you can bring your debt down during some considerable period of time.
But when you earn 100k and you have a debt of 500k your debt is impossible to be repaid because only interest over the debt will take a good share of your income. And that is even worse if you go into more debt to keep your level of life. In some part of the equation by going like this you will have to start to cut over basic necessary needs to just paying interest like health care, education, recreation, food, house maintenance, etc.
In the case above when applied to a country this produce more recession, unemployment and lack of confidence among consumers what will impact over already hit business and turns into a spiral down.
The former is the current situation of UK and PIGS.
The same attitude Britain has now is the same that other country had before the collapse.
The Irish, Greek, Italians and Spanish were denying reality until reality hits them.
Spain until 2 month ago were saying that they were not Greece, not Argentina that their economy is too big to fall, etc. Now see them they are negotiating a rescue plan.
@briton
You sound like the Spanish saying that if they collapse the rest of the world will collapse with them.
Well sorry for destroying your bubble of importance but if UK fails and the PIGS the impact for a country like Argentina would be very modest.
1-Agentina is out of the international borrowing casino.
2-Export to Europe are little and most of them in value have been already hit like the bio fuel by Spain 1.5bn. and Argentina import more from Europe than she exports (especially from Germany)
3-Imports will become cheaper from Europe.
Etc, ect.
So don’t worry you can collapse without fearing for Argentina in fact under my point of view will make Argentina stronger.
poor danny,
Jul 27th, 2012 - 11:48 am - Link - Report abuse 0more anti british rubbish, clouds your ego,
BRITON did NOT say, if the UK colapses the world will suffer,
please re-read,
eye said, if the WEST collapses. the world will suffer,
now prove me wrong,..
@ briton
Jul 27th, 2012 - 12:56 pm - Link - Report abuse 0What west are you talking about?
Because the falling starts in Europe are the BPIIGS (Britain, Portugal Ireland, Italy, Greece and Spain).
Or The GreenPIGS because they will have to eat only lettuce the next 20 years due to lack of greenback from Uncle Sam.
And the west also included Germany, Argentina, Brazil, Venezuela, Chile, Canada, Peru, Colombia, Uruguay, Mexico, etc. All quite healthier I didn’t include USA because doesn’t look very good.
The west is not going to fail only just some Green Pigs that’s all mate. No big deal.
Dany
Jul 27th, 2012 - 01:38 pm - Link - Report abuse 0I agree with you that austerity is painful and needs to be intelligently managed with measures that will improve productivity. The alternative of borrowing more is not realistic.
But you misunderstand the UK’s position. I have pointed this out to you before. You are confusing government debt with private debt. The figure you have for UK debt as 400% of GDP is privately held debt not government debt. It is government debt that is causing the current debt crisis.
UK government debt is about 80% of GDP. Japan has the highest govt debt in the developed world at 200% of GDP. The amount of UK govt debt is not good, but manageable. It would become a major problem if the interest increase to the levels Spain, Italy, etc are seeing.
The UK pays about the lowest interest in the world on its debt and this is precisely because the govt has appeased the lending markets by implementing austerity measures.
he gets a bit confused poor guy
Jul 28th, 2012 - 12:03 am - Link - Report abuse 0@Condorito
Jul 28th, 2012 - 01:43 pm - Link - Report abuse 0Ah! Dear Condorito, I didn’t confuse anything I guess you are confused.
Public debt is all the debt owed by any govt. denominated in local currency in the case of UK British Pounds also known as Internal debt.
And then you have the External debt composed by the debt issued to international lenders through bonds by govts (in UK called Gilts and in USA called U.S. Treasury securities) plus the debt of the privates mostly issued by banks denominated in foreign currencies.
So now let see Spain’s Public debt is 68.2% of her GDP much less than the UK’s public debt that is more than 80%.
So can you tell me why Spain is close to collapse?
I know you are going to tell me because of the Euro.
Nope if for the vulnerability of her banks exposed to a huge external debt.
And UK? Is even worse
A run in UK banks and you have another Greece because they will start to collapse in domino style and the govt. will have to issue like Spain and any other country a rescue plan for the banks or the entire financial sector will collapse.
And there is when “Investors” make huge profits because a country in that situation will pay premium interest rate to lenders to avoid the inevitable (collapse) like Spain, Greece, Ireland, etc. all have done.
If you don’t believe me ask George Soros he knows what I talking about.
Dany Boludo Buger,
Jul 28th, 2012 - 08:19 pm - Link - Report abuse 0You are actually agreeing with me: I am saying that UK govt debt is about 80% (not 500% as you are implying in your post 21).
And yes you are correct that Spain’s debt is less than UK debt as % of GDP.
And no I am not going to say that Spain is close to collapse because of the Euro, but as a consequence of the Euro they can’t devalue.
The reasons Spain is FUBAR are:
1) The interest on their debt is around 7% for 10-year bonds. The UK 10 year rate is 1.5%, so despite having more debt than Spain, the UK is paying much less to service it. Why does the UK have lower interest? Because it is AAA rated. Why is it AAA rated? Because the government is seen as fiscally responsible. If the UK govt had not undertaken austerity measures the rating would have slipped, the interest would have gone up, making it more difficult to meet commitments...followed by another downgrade in credit rating...and on to the slippery slope of the piglets.
2) Shrinking economy – makes it even harder to scramble up that slippery slope.
3) Massive unemployment – 6 million Spaniard holding on to the pig’s tail as he flails with all his porcine might to get traction on that slippery slope.
The UK is sailing close to the wind, but it is not where Spain is. If Spain needs a bailout it will pull France closer to the edge. French banks are much more exposed to Spain than the UK. If the markets get nervous about France then the EU will be forced to take drastic action. In fact the US and China would be forced to aid the rescue. France is too big to fail.
There is not going to be a catastrophe. Europe will stall and splutter along. Their welfare systems will be forced to shrink and the populace will have to work longer and harder until they are competitive once more.
Salu2
Standard and Poor's says UK to keep AAA rating
Jul 28th, 2012 - 09:32 pm - Link - Report abuse 0http://www.bbc.co.uk/news/business-19025747#
speaks for its self .
@Condorito
Jul 29th, 2012 - 08:09 am - Link - Report abuse 0Why instead of insulting me you don’t bother to read carefully what I have posted?
In fact I’m not agreeing with you about the National debt of UK.
You are just counting the debt denominated in British Pounds owed to domestic lenders (that is just Public debt). And which is 2 trillions dollars, then you have to take into account the debt owed by the govt in foreign currencies like Euros, US Dollars, Yens, Renminbi and whatever they have issued their debt.
The more of the 80% is just the debt denominated in UK currency (British Pound) but there is a external debt what is counted only in one account called Debt External.
“Definition “External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International IMF and WB.”
So to the more of 80% you have to add the debt of the govt. owned to international lenders.
But that is not enough because the debt owed by banks will affect the govt. because they will have to rescue them like in the case of Bankia SA in Spain An NR in UK, etc.
So Spain is going to the drains thanks the banks debt and not for the govt. debt.
See the example of Iceland the banks provoked the default of the nation.
Do you understand now or is too hard for you?
And doesn’t matter the AAA rating because Iceland had AAA and then collapsed.
Here you have de chronic of a collapse due to commercial banks (Iceland). They couldn’t refinance their debt.
http://en.wikipedia.org/wiki/2008%E2%80%932012_Icelandic_financial_crisis
The market when banks burst press govts to rescue them because te taxpayer money is the best guarantee to them to cash the banks debt.
If I would be you I will be taking my savings from any bank in UK and buy whatever to don’t be spoiled by the Bankesters.
Acording to the ratings agencys Britain has a 1 in 3 chance of losing its AAA rating on the basis that you “believe nothing until it has been officialy denied” i would say that makes the odds about 50 - 50
Jul 29th, 2012 - 12:24 pm - Link - Report abuse 0you argies just cant have it both ways,
Jul 29th, 2012 - 01:16 pm - Link - Report abuse 0the UK is not that worse of, and untill we actaual do go under, then we are still on top,
argentina on the others hand, ??
Argentina borrowed nothing last month , Britain on the other hand borrowered another 13 billion pounds which it has already spent. The only thing keeping ukplc afloat is its AAA rating and that won't make it past Xmas. What will follow is more cuts and an even deeper recession. Briton 31 the only thing you are on top of is a big pile of debt that you can't aford to pay back.
Jul 29th, 2012 - 07:10 pm - Link - Report abuse 0sooner or later the cutbacks will either kill us, or make us,
Jul 29th, 2012 - 10:39 pm - Link - Report abuse 0just wait and see,
we are not that bad off, we just have idiots for a goverment that gives billions to others insted of us,
mmmm
For once i agree with you . But our idiots give the millions to themselves .
Jul 29th, 2012 - 11:08 pm - Link - Report abuse 0We are not that different.
Saludosfrom
buenos aires
true.
Jul 29th, 2012 - 11:18 pm - Link - Report abuse 0@29 Dany,
Jul 30th, 2012 - 12:27 am - Link - Report abuse 0I didn’t mean to cause any offense. I apologise if I did.
@Condorito
Jul 30th, 2012 - 03:45 am - Link - Report abuse 0Is Ok mate and “Boludo” is not offensive per se. Depends on the context.
For example if some one has a very close friend in Argentina is typical for Argies to address him as “Que haces Boludo” or “Como andas Boludo” means something like “how are you mate”. But if you don’t know the person and even you address him with respect it is an insult like “Ud. señor es un Boludo”, even worse is “Ud. señor es un reverendo Boludo” (see here is more pompous the insult).
I like the “Es un Boludo Importante” that means something like “He is a Very Important Boludo” a “VIB”
SYL
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