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[uaekid]

UK economy will shrink faster than rest of the developed world, IMF predicts.

The British economy will shrink by 2.8 per cent this year in the worst performance of any developed economy, the International Monetary Fund (IMF) predicted today.
In a profoundly gloomy set of figures, the fund slashed its previous forecasts for world economic growth to near standstill at only 0.5 per cent, the weakest since the Second World War, from a November estimate of 2.2 per cent.
The dire figures came as the United Nations’ International Labour Organisation published a report predicting that the two years of global recession could cost a total of 50 million jobs worldwide and trigger social unrest.
The outlook was also dire for the United States and the eurozone, whose economies were seen contracting by 1.6 per cent and 2 per cent, respectively.
George Osborne, the Shadow Chancellor, said the forecast was a devastating critique of the Government’s handling of the economy.
“Gordon Brown cannot answer the simplest question of all,” he said. “If Britain is well prepared as he claims, why are we facing the worst recession in the world?
“Let us hope these forecasts are wrong. But if they are not, Britain is set to endure the worst downturn of any major country and the worst year for the economy since 1948. Without a change of direction we will be living with Labour's debt crisis for a generation.”
Gordon Brown’s spokesman said that other economies were predicted to face similar difficulties and the Prime Minister was convinced that the Government was taking the right action to get Britain through the global recession.
He said: “The Prime Minister is absolutely confident, as he was setting out today, that the Government’s plan for stability and recovery - which is first recapitalisation of banks, then a fiscal stimulus, then action to get lending moving - is the right approach, the right plan, and it is in line with the approach of every other major economy.”
In its report the IMF said that deflation risks were rising and that toxic assets needed to be removed from the banking system to arrest the vicious spiral.
It called on governments to find new strategies to combat the economic turmoil and counter uncertainty.
“The main risk is that, unless stronger financial strains and uncertainties are forcefully addressed, the pernicious feedback loop between real activity and financial markets will intensify, leading to even more toxic effects on global growth,” the IMF report
Official figures confirmed last week that Britain fell into recession at the end of 2008.
The UK economy contracted by 1.5 per cent in the final three months of the year — worse than expected by analysts and sparking fears of a deep and prolonged recession.
Overall, UK GDP for 2008 as a whole fell by 0.7 per cent, the poorest full-year output since 1992.
Britain's housing and construction markets were hard hit, but the effects of the lack of credit has meant that all sectors across the economy are now suffering.
Howard Archer, the chief European and UK economist at IHS Global Insight, said that if anything the IMF was being kind in its predictions for the UK.
"In fact, we are slightly more pessimistic still," Dr Archer said. "Following the even worse than expected GDP contraction of 1.5 per cent in the fourth quarter of 2008, we now expect the UK economy to contract by 3.1 per cent in 2009 and then be only flat overall in 2010."
"We assume that the UK economy will contract through 2009 — with the rate of decline particularly sharp in the first half.
"We see recovery then developing only very gradually in 2010.
"We also fully agree with the IMF's forecast that the eurozone will contract by 2 per cent in 2009 and then grow by just 0.2 per cent in 2010. This exactly matches our forecast."
The IMF said that global recovery would not be possible until the financial sector began functioning again.
“Despite wide-ranging policy actions, financial strains remain acute, pulling down the real economy,” the report said.
Emerging market economies were the only ones predicted to show growth, the IMF said, expanding 3.3 per cent in 2009 and 5 per cent next year, but those forecasts as well were below projections made less than three months ago.
It expected the world economy gradually to recover in 2010 and growth to resume to about 3 per cent.
Still, the IMF said that the outlook was highly uncertain and that the timing and pace of the recovery depended on policy measures adopted by governments.
In comments earlier in the day the IMF chief warned that the global economic crisis was endangering even the fund itself, which risked running out of money if it had to meet all potential claims on its resources.
"Several states are already queueing at our doors,” Dominique Strauss-Kahn told Die Zeit, a German weekly newspaper.
“At the moment, we have enough money. But if we actually have to help them, the lion’s share of our resources will be consumed in six to eight months.
"That’s why I’m already asking member states for additional funds, and Japan has already given its consent.”
He also said that the stability of the eurozone could be in danger if its governments did not co-ordinate more closely on economic policy.


http://business.timesonline.co.uk/tol/b ... 605063.ece

[K-Dog]

I really don't see your point firefingers. Like Brits on this forum told you they have been there before and came out of it and I have no doubt that they will again this time. Just like I remember the 81 recession in the States and lets not forget about the Great Depression. The sad thing is your country doesn't have any history of dealing with such crisis. Denial and lies are certainly not going to help you. The cash that you keep talking about will last a few years for you, have you ever thought of your children's future? Probably not, your too immature for that.

[uaekid]

Good morning k-dog, those headlines surly got your attention huh, well I'm not posting to compare countries, I know UK is better than the hall world in everything, I'm just posting cuz someone here said those sort of posts are for global economic knowledge so take it like it is written.

[Chocoholic]

Geez you're becoming as bad as MB with the pointless cut and paste stories. And yes, the point is what? So what? Been there, done that, came out of it before! And....?

[uaekid]

ohh so when its about the great UK then it is pointless huh. well anyway I just don't wana beleive you guys are still going to be around but facts tells other wise, so I'm stock with you.

and why am I becoming bad passing along some info ? but thats you choc, so whats new ? anyway I'm just posting those info to piss you guys off and it's working LOOOOOL

[Speedhump]

Geez you're becoming as bad as MB with the pointless cut and paste stories. And yes, the point is what? So what? Been there, done that, came out of it before! And....?

dont feed the TROLLs. Their shame is that they are intensely jealous that they can't exist without Caucasian brains to run their projects and developments. Their money cant buy them style, respect or a history, they hate it.

[arniegang]

The difference between us and the kid is that we know its bad, its no big secret.

[muslimbangladeshi]

Geez you're becoming as bad as MB with the pointless cut and paste stories. And yes, the point is what? So what? Been there, done that, came out of it before! And....?

dont feed the TROLLs. Their shame is that they are intensely jealous that they can't exist without Caucasian brains to run their projects and developments. Their money cant buy them style, respect or a history, they hate it.

You describe the British situation well. Congrats.

In fact, Britain not only needed Caucasian but all other brains too to prosper, on top of its regular share of stealing, exploitation, skullduggery, deception, mass murder, imperialism, duplicity, wars and other illnesses.

[Chocoholic]

Geez you're becoming as bad as MB with the pointless cut and paste stories. And yes, the point is what? So what? Been there, done that, came out of it before! And....?

dont feed the TROLLs. Their shame is that they are intensely jealous that they can't exist without Caucasian brains to run their projects and developments. Their money cant buy them style, respect or a history, they hate it.

True true. We'll just ride the tide as always.

[muslimbangladeshi]

http://www.telegraph.co.uk/finance/economics/4547902/PM-Gordon-Brown-pins-economy-hopes-on-China.html

PM Gordon Brown pins economy hopes on China

The 500 businessmen and politicians who gathered at the Natural History Museum last Sunday for dinner with Wen Jiabao, the Chinese prime minister, were treated to an unusual item of fusion cooking: “London Duck”.

By Malcolm Moore in Shanghai and Mark Kleinman
Last Updated: 6:50PM GMT 07 Feb 2009


PM Gordon Brown and Chinese Premier Wen Jiabao at a breakfast meeting at Downing Street last Monday Photo: AP

Seated at the top table alongside Mr Wen, Lord Mandelson, the Business Secretary, Paul Walsh, chief executive of Diageo, and Stephen Green, chairman of HSBC, had much to talk about as they tucked into the variation on China’s signature food export.

After attacking the West over the global financial crisis in Davos the previous week, Mr Wen had kinder words for his British hosts – and revealed himself to be something of an Anglophile.

He spoke of an appreciation for Adam Smith, the father of modern economics, and quoted Percy Bysshe Shelley, the English Romantic poet. Most importantly for Mr Brown, he vowed that China would eschew protectionism and remain open for business with Britain.

The audience was impressed, but it was not a pledge borne out of altruism: four times as much trade flows from China to Britain as it does in the other direction.

The following day, Mr Brown set another ambitious target for expanding the bilateral relationship.

He hailed China's openness to British business as "the most important agreement" of Mr Wen's visit. "I believe that the doubling of exports over the next 18 months [to £10bn] is something that is absolutely crucial to helping the economy to recover," he said.

Exports to China remain a small chunk of the country's overall export economy, and seasoned sinophiles in the audience would have been forgiven, however, for expressing some scepticism at the prime minister's vision. While British exports to China rose in value by 40pc in the first eight months of last year, they crumbled during the economic crisis. By the end of 2008, the growth rate was just 3pc. And the overwhelming question remains: does Britain have anything that China wants to import?

The Qianlong emperor had an answer to that in 1793, when he wrote to King George III that the Chinese "do not have the slightest need of your country's manufactures".

The potential for expansion is obvious, however. Lord Mandelson wrote in a newspaper article last week that "China is a vital engine in the global economy, and could well account for more than $2 trillion worth of global imports and exports in 2010. Along with that of the other emerging economies, it is only China's growth that will keep aggregate global growth from turning negative in 2009."

Peter Sands, the chief executive of Standard Chartered, suggested that the principle of expanding bilateral trade was more important than specific targets. "The point is not so much the precise number, but the scale of the ambition, and the fact that China has committed to work with the UK to achieve this goal," he said.

Yet Mr Brown is aiming for a record rise in exports just as the British economy slumps into a possible depression and concerns grow about Chinese domestic demand as millions of workers are laid off in what was until recently known as the "workshop of the world".

There is already confusion in Downing Street about when this target may be met. While Mr Brown set a timeframe of 18 months in his press conference last week, other parts of the Whitehall machine are more vague about the timing.

In Beijing, Alistair Morgan, director of trade and industry at the British Embassy, declined to discuss the new target. Mr Morgan may still be smarting from Mr Brown's last tractor-production targets, issued on his visit to China at the beginning of 2008. Then, the prime minister promised to double the number of Chinese companies listed in London by 2010 and welcomed the decision by the country's vast sovereign wealth fund to open its first overseas office in Britain.

Since then, there have been just four new Chinese listings on the London Stock Exchange, and China Investment Corporation has scaled back its investments after suffering multi-billion dollar paper losses on its shareholdings in Morgan Stanley, the investment bank and Blackstone, the private equity group.

There was one concrete, if small, achievement last year. Mr Brown's visit to China was rewarded with an agreement to allow the import of British pig offal into China.

"It is difficult to overstate the importance of the China relationship," one person close to the Government said. Lord Davies, the new trade minister and former chairman of Standard Chartered, the emerging markets-focused bank, is understood to have been given a brief to build trade relations with faster-growing economies in Africa, Asia and Latin America.

Last Wednesday, the House of Commons Business and Enterprise committee announced it would begin an inquiry later this month with the grim title: "Exporting Out of the Recession". And this week, the former Cabinet ministers Patricia Hewitt and Charles Clarke will be named as members of a new all-party parliamentary group focused on UK-India trade relations, underlining the growing importance in Whitehall attached to exploiting bilateral trade with Asia.

There is a long way to go. Last week there was no new money on the table despite the plethora of "deals" announced by the two premiers. An agreement between Airbus and Xian Aircraft, a Chinese aerospace company, "was not a sale, but relates to Airbus's investment in China which will help underpin future sales and performance," according to UKTI.

There was little of substance about where the targeted export growth will be generated, although UKTI said its officials in Beijing, Shanghai and the relatively untapped urban markets of Chongqing and Guangzhou were working to promote British exports from industries such as healthcare, advanced engineering and environmental technologies.

Stephen Green, the chief China economist at Standard Chartered, said the weakness of sterling would work generally in exporters' favour. "The pound is 30pc more competitive [against the yuan, China's currency] now," he said.

In Shanghai's glitzy shopping centres and corporate watering holes last week, though, there seemed to be little appetite for a doubling of British goods. Holland & Sherry, the Savile Row-based cloth weaver, has an office in Shanghai, but the manager said they had seen a decline in demand in recent months.

Whisky importers expressed doubts that the Chinese could drink any more Scotch. "They can ship twice as much over but can we double our whisky consumption? I don't think so," said Zhuang Yan, the head of Xiamen Deyuanda Trading, a whisky importer.

Richard Yorke, the chief executive of HSBC in China, was adamant that the doubling of exports would not come through the service industry. "My sense is that it probably won't come much from the service side. It will be things like high-end manufacturing instead. There is going to have to be a good analysis by British companies about what the market is here," he said.

And while both Mr Yorke and the UKTI are targeting the £400bn of fiscal stimulus money that China will pump into its economy this year, there seems little to aim at here either. "I've been speaking to companies about the fiscal package and they say that the money is all going to go to the big Chinese state-owned companies. After all, the package is meant to create Chinese jobs. We may get a small amount of trickle-down, perhaps to the architectural firms, but it will be small," said Mr Crawford. "I was a bit surprised by [Mr Brown's target], to be honest," he added.

Pressed for examples of British success in China, the UKTI named Rolls-Royce, Bentley, Aston Martin, Mini, Jaguar, Land Rover and Bentley, all of which are foreign-owned. Tesco, Balfour Beatty, Westinghouse, HSBC, Standard Chartered, Aviva, Arup and the BBC completed the list.

Mr Crawford said: "Wen Jiabao has agreed the deal, so the Chinese will simply mandate their companies to buy British," he said. "Of course, while the companies will obey, they will probably do their best to negotiate big discounts."

One thing is certain: the doubling of exports is unlikely to come from sales of "London Duck".

[muslimbangladeshi]

Even the british are now relying on nonwestern 'communist' country of China to revive their faltering economy

That was really funny.

I hope Muslim countries form a union and realize the benefits of having a huge common market just like China. We should learn important economic lessons from China and Japan where we are lagging and they can learn from UAE, Qatar, Saudi Arabia or many others where they may be lagging.

Mutual respect and exchange is going to be beneficial for the future generation. Inshallah we must emerge as the world's preeminent bearers of truthful just and honest aspects of human civilization.

[Chocoholic]

PMSL! Truthful, Honest and Just! You gotta be kidding me!