The UK economy is set to experience the slowest pick-up in consumer spending of any post-recession period since 1830, according to a Financial Times, 31 May 2011.
A new analytic study suggests that Britain will experience its slowest recovery in consumer spending for any post-recession period over the last 180 years.
“Families are expected to spend just slightly more by 2015 than they were before the financial crisis hit in 2008, as high inflation, tax rises and slow wage growth eat into disposable incomes.
“The recession may have been relatively benign for households, but the recovery is going to be particularly awful,” said Simon Kirby, an economist at the National Institute for Economic and Social Research.
“British consumers have not experienced such a slow recovery in their spending power since 1970s-era stagflation. A period of stagnant spending growth could mean that consumers will barely feel the difference even as the economy expands.
“Everyone will hear and read about the economy growing in the news, it’s just that households are not going to notice it,” said Mr Kirby.
While the UK labour market has been surprisingly strong, both the Bank of England and the Treasury say that stronger export growth and business investment is still needed to offset the fall in consumer and government spending.
“The only sustainable recovery is the kind of recovery that rebalances away from consumer demand and towards external demand,” said one Treasury aide.
It is unclear, however, whether trade and business investment will prove sufficient to offset weak consumer spending and public sector cuts – which together account for more than 85 per cent of the economy.”
We have to realize that even these proposed solutions will not hold off the inevitable collapse of an unsustainable debt-based monetary system.
The hard reality is that our current financial system – specifically, the process of allowing commercial banks to create money whenever they make loans – is going to lead us all in to extreme poverty. And the bitter truth is that this will be completely unnecessary.
The reality is that this recession is completely unnecessary.
Nothing has changed in real terms – we have the same number of people, the same amount of food, the same technology, knowledge, office space, houses, and the same amount of hours in the week as we have had throughout the last decade of economic boom. We have everything we need to create and sustain a prosperous economy, so why are people with real skills losing their jobs and being left to sit at home doing nothing productive with their time?
The recession/depression was 100% inevitable, but also 100% avoidable – if the reform that we are proposing was implemented.
However, there is no way out of this recession until the state prevents high-street banks from creating money.