Adverts

Tuesday, October 26, 2010

Economic Thoughts

I thought it only prudent (don’t worry, not in the Gordon Brown sense of the word ‘prudent’) to comment upon the state of the UK economy today, with the release of good news with the quarter on quarter increase in GDP of 0.8%.

I am sick of the bashing from the Anti-Tory left-wing of this country already (BBC - you are on notice as my favoured news provider). They are so desperate for power that they will choose any way to attack the government, and talk down the country’s prospects. And don’t even get me started on the politically-motivated unions, like the London fire-fighters looking to strike on November 5th.

The left of this country had 13 years in charge of the economy. Despite my natural misgivings given how badly Labour handled the economy in the 1970's, I had no major complaints at the handling of the economy when Labour first took over in 1997, until around 2003 anyway, and looking back now, I stick with my same stand-point. It was around 2003 when I really started to get the jitters about the future of the economy.

Now the Tories and Lib Dems have only had 5 months.

It will be a good couple of years before we really see the fruits of the work going on now. Many economic inputs have a significant lag-time.

That the figures for this last quarter were better than expected is no surprise to me. Our annual GDP growth rate is now 2.8% - just about what it was prior to the recession.

I still expect it to dip somewhat in future quarters before rebounding strongly later in 2011 or 2012.

I don’t think we have felt the full effects of the £200billion quantitative easing from last year, and I think inflation could very well rise further, which would likely mean higher interest rates to tackle it, and more problems for home-owners, and subsequently the poor banks.

There is still quite a rough ride ahead. Enough internal possibilities on the down-side without even considering all the potential external down-sides. But I am confident that the seeds of future prosperity are being sown.

I really wish everyone would give the government a chance. I gave the Labour government a chance back in 1997 despite my misgivings...and it took them a few years longer than normal for their standards to mess it up.

I have faith in the government – and fear not, I will be warning if I feel they are not taking the right steps in the future, I am not blind to following one party – just because I fully believe the Conservatives fixed the country in the 1980’s and are doing so now (along with the Lib Dems), does not mean I assume they will always get everything right. I will be scrutinising and making my opinions known to them if necessary.

But for now, please give them a chance. If in 5 years time, we are in a worse place, then I will stick my hands up and admit I was wrong, and re-consider all my learned economic thinking (you have this in writing).

I have placed my confidence in our government.