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British growth on the up.

The OECD's latest forcast suggests that British growth will be outpacing the US, Japan and Erozone by the end of 2013, and that the balance of global growth is shifting back to Western economies. This has to be good news, doesn't it?
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There has been a broad lifting of debt-to-GDP ratios as austerity is being relaxed for the time being. Some of this relaxation is the result of a modest loosening of fiscal policy in Germany in the run-up to their elections (which the IMF praises in the link). And some of it was a relaxation of the fiscal criteria on several countries, crucially including France, as it became clear that these countries were all at risk of not meeting eurozone debt-to-GDP treaty targets without more time and a bigger buffer.

The UK has clearly benefited both directly by allowing it's own debt-to-GDP to rise from 85.1% in Q1 2012 to 88.2% in Q1 2013, and by the stimulus effect induced by the extra public spending allowed throughout the Eurozone, gently pushing up PMI throughout the zone. Note that the improvement in PMI here roughly tracks the degree of debt-to-GDP expansion in the first link above.

It's not surprising that when the stranglehold of austerity is relaxed, economies show signs of life.
 
1. ISTM that the current reported growth is in all probability lower than if George had kept his idiot nose out of things he doesn't understand.
2. Germany up 2% and even the good old rapidly declining empire that is the US of A up 5%.

Not good is it?
 
Mullardman said:
1. ISTM that the current reported growth is in all probability lower than if George had kept his idiot nose out of things he doesn't understand.2. Germany up 2% and even the good old rapidly declining empire that is the US of A up 5%.

Not good is it?
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He understands them better than Gordon Brown, that absolute epitome of incompetence and nastiness ever did, could or will. That isn't saying much though.
 
Eric L said:
There has been a broad lifting of debt-to-GDP ratios as austerity is being relaxed for the time being. Some of this relaxation is the result of a modest loosening of fiscal policy in Germany in the run-up to their elections (which the IMF praises in the link). And some of it was a relaxation of the fiscal criteria on several countries, crucially including France, as it became clear that these countries were all at risk of not meeting eurozone debt-to-GDP treaty targets without more time and a bigger buffer.

The UK has clearly benefited both directly by allowing it's own debt-to-GDP to rise from 85.1% in Q1 2012 to 88.2% in Q1 2013, and by the stimulus effect induced by the extra public spending allowed throughout the Eurozone, gently pushing up PMI throughout the zone. Note that the improvement in PMI here roughly tracks the degree of debt-to-GDP expansion in the first link above.

It's not surprising that when the stranglehold of austerity is relaxed, economies show signs of life.
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I think the other effect of note is that much of the UK populace is so brow beaten, miserable and desperate that the willingness to accept any job, even a part time minimum wage or zero hours contract means that there is enough pressure on wages at the low end that it can overcome the downward stickiness of nominal wages.

Ireland also has this effect although in their case because they have a long and proud history of being downtrodden and exploited and celebrating their miserableness.

Also I don't have the figures to hand, but the graph that one really needs to look at is GDP relative to the 2008 peak, output gap etc.

And finally people need to remember that Japan has had a couple of mini recoveries over the last 15 years of lost growth and managed destroy them with a return to traditional montary policy. Indeed right now all eyes are indeed on Japan and Abenomics. If it does work it will be interesting to see what Berlin and Brussels do.
 
Krugman on this issue:

imagine that you’re a novice in this business, and you’re confronted with politicians who say, “You say that austerity hurts growth, but after three years of dismal performance under austerity, we’ve just had one quarter of pretty good growth. You’ve been proved completely wrong!” Your first reaction is to think “They can’t be that stupid, can they?” Or, alternatively, “They can’t think the rest of us are that stupid, can they?”

Oh yes they can.

As Simon Wren-Lewis says, if some positive growth, eventually, means that your policies have been successful, then a policy of simply shutting down half the economy for a year or two, then letting it start up again, is a smashing success.
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http://krugman.blogs.nytimes.com/2013/09/10/oh-yes-they-can/

Or if you prefer a graph this shows output gap relative to pre-crisis peak and where we would be without Austerity and Osborne.

Taylor.jpg


http://mainlymacro.blogspot.co.uk/2013/07/how-much-has-austerity-cost-so-far.html
 
Rcook said:
He understands them better than Gordon Brown, that absolute epitome of incompetence and nastiness ever did, could or will. That isn't saying much though.
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Side-splitting stuff there and I'm not on the side of Brown.

You have to laugh when someones political bias blinds them to this extent.
 
Georgie is like a barber surgeon in a powdered wig who's bled the patient half to death.He's come back from holiday to bleed them again and finds them a little improved
 
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