Recession Expected, Worst Of It In Europe... CEOs Agree With Analysts

[AbhainnTirim 368]

I think that a lack of will by political leaders across the world to support families and households with the rising cost of living, especially in regards to fuel/energy and food bills, has exacerbated this economic downturn.

 

There was a BBC News report on this, that the lack of purchasing power has meant that people are buying less as they’ve less to spend, meaning businesses have less customers, less income to pay their own bills and staff, which adds tonnes of more people into financial hardship. The government’s refusal to give financial credit and support to families was to blame, according to the report. I don’t know if it’s online, but I believe I watched it on Wednesday or Thursday…

 

Giving a few £100s in every household may cost a lot, but it will go such a long way, and help so many struggling people. If this trend continues, and we don’t give support to people, then this economic crash will lead to a reduction in tax revenue, which will cost the government even more! I just wish that we had courageous leaders in this world that are willing to make difficult decisions.

[Economy 52,842]

31 minutes ago, AbhainnTirim said:

I think that a lack of will by political leaders across the world to support families and households with the rising cost of living, especially in regards to fuel/energy and food bills, has exacerbated this economic downturn.

 

There was a BBC News report on this, that the lack of purchasing power has meant that people are buying less as they’ve less to spend, meaning businesses have less customers, less income to pay their own bills and staff, which adds tonnes of more people into financial hardship. The government’s refusal to give financial credit and support to families was to blame, according to the report. I don’t know if it’s online, but I believe I watched it on Wednesday or Thursday…

 

Giving a few £100s in every household may cost a lot, but it will go such a long way, and help so many struggling people. If this trend continues, and we don’t give support to people, then this economic crash will lead to a reduction in tax revenue, which will cost the government even more! I just wish that we had courageous leaders in this world that are willing to make difficult decisions.

I'm certainly in favour of helping the most vulnerable specifically but given the nature of the economic pressures that are forecast to lead to this downturn no amount of cash would have prevented the downturn in my opinion. Whoever wrote the report is obviously not taking the root cause into account and the basic laws of supply and demand and what happens when the economy reaches the stage in the cycle where demand outstrips maximum productive capacity

 

The economy has an imbalance right now of not enough capacity to meet demand which is why there's so much inflation right now. If you gave people more cash to try to offset the inflation you'd only get even more inflation in this case. Once that ceiling in capacity is reached you cannot increase purchasing power wealth further because the maximum goods and services that can be produced at that time are already being consumed, giving people more money is just increasing currency for the same amount of goods and services meaning even more inflation is what would happen

 

The pandemic disruptions to supply chains and now the war have reduced the economies maximum productive capacity of goods and services from where that ceiling would otherwise be. If we didn't have the war and pandemic perhaps the economy wouldn't be overheating yet

 

As a result the economy is overheating at an earlier stage of recovery than it normally would (overheating is when growth in demand is not able to be met by supply capacity due to either labour shortages, material shortages or investment shortages)

 

Giving people cash credits may disproportionately help the people at the bottom struggling the most by equalizing the burden more evenly since a flat check is a higher percentage of low income earners paychecks than someone earning more meaning for lower income people the checks would be worth even more inflation. But the same recession would still occur regardless the cash infusion would only alter the amount felt by different people. Someone making $20,000 might be helped while someone making $70,000 might loose more purchasing power from the inflation those checks create than they get out of it.

 

It would ultimately be an equalizer not an economic stimulus

[Better Day 5,766]

7 hours ago, Economy said:

He's to blame for a global recession that's likely to come due to pandemic bottle necks, comodities shortages and Ukraine-Russia disruptions...

 

Explain...

 

I'm not disputing how good or bad he is as a leader or what mistakes he might have made but u gotta admit if ur actually blaming the UK Prime Minister for this that's a bit much

He’s too blame for it hitting the UK 

[Nathan 2,079]

2 minutes ago, Miss Dolly said:

He’s too blame for it hitting the UK 

While I genuinely love your hatred of Boris Johnson, this recession is global and was always going to hit the U.K. regardless of who was in charge.

However, him wasting billions in the pandemic, and pulling us out the EU will absolutely make it harder for us to get through the next few years.

[Guest]

So does it mean even less chances for me to get a job?  

[Economy 52,842]

6 hours ago, Miss Dolly said:

He’s too blame for it hitting the UK 

 

6 hours ago, Nathan said:

While I genuinely love your hatred of Boris Johnson, this recession is global and was always going to hit the U.K. regardless of who was in charge.

However, him wasting billions in the pandemic, and pulling us out the EU will absolutely make it harder for us to get through the next few years.

@Nathan is right. The dynamics at play are too major and inescapable

 

Bad leaders can make the situation a little worse, but they aren't to blame that it's happening

 

Look at my Country (Canada). We get a lot of offsetting factors right now and are among the best positioned because not only are we more isolated from direct trade with Russia/Ukraine... We also export a lot of comodities that have gone up in price (Oil, Natural Gas, Lumber, Grain, Metals etc) so our exports are on fire right now in those sectors. Our trade surplus is hitting close to all time highs right now, and our budget deficit is falling from all that revenue with the Provinces that export the most like Alberta swinging Tina budget surplus

 

Add to the Trudeau and the Liberals while I don't agree with every single thing they do I think overall they handled the crisis reasonably well and we gave people the most assistance of any major advanced economy running a deficit of 20% of GDP at the peak of the crisis just infusing mass stimulus and checks etc

 

Despite all these advantages in our situation and strong growth of late and lowest unemployment since 1976, Canada is forecast to also join the recession. Maybe not as severely, but it's expected to. Because the disruptions to chains will hurt our industrial sector so much that our high in demand natural resources can't fully compensate for it. And we can't do anything about that fact that supply disruptions are putting the economies capacity at a lower level than it normally would be so we're already overheating with high inflation which will hurt consumer spending

 

You can be in the best if conditions and still slip into this recession

 

You can blame Boris Johnson for making a lot of stuff worse but no leader would have been able to prevent this from hitting the UK. That's just not a reasonable expectation of any leader

[Dojo 19,823]

let's just eat cake y'all 

[Neroneau 1,017]

I will NOT let this affect me 

[TEANUS 16,140]

It’s only gonna get worse especially in the US because we can’t find a good administration. It’s been battle after battle of the evils since Bush

[PhantomOfTheDance 13,795]

Is it ever going to get better?

[Economy 52,842]

45 minutes ago, TEANUS said:

It’s only gonna get worse especially in the US because we can’t find a good administration. It’s been battle after battle of the evils since Bush

Yeah these leaders aren't making policies to help ppl properly

 

But that is more long term deterioration or stagnation... 

 

In the short term tho this downturn if it happens as expected will have more to do with short term cyclical swings and pandemic/war disruptions and less to do with whoever is in charge

[Economy 52,842]

23 minutes ago, Lady JarJar said:

Is it ever going to get better?

When China stops locking down their factories creating shortages every time 2 covid cases pop up and when the Russia-Ukraine war ends or at least eases

 

Regarding China I don't get why they still keep targeting COVID 0. Like it's endemic at this stage it's here to stay... It's always gonna come back, the time to try to eliminate it is long gone

 

It has mutated into multiple strains and is way more contagious than the original virus. COVID 0 isn't realistic anymore. They need to move on

 

What's happening right now is the economy is overheating because demand is exceeding the economies maximum output capacity of goods and services. Usually this occurs when the economy has gone thru a big boom and the last stages of its peak. At this point inflation surges because the economy cannot produce anymore than it does cuz unemployment is low, not many left to hire and factories run at maximum capacity. The economy cannot respond to even higher demand and prices surge and it has reached its peak

 

But because of the war and pandemic shutdown disruptions to supply chains, the economy has reached its productive capacity ceiling at a lower level than normal. Normally the current level of demand wouldn't cause overheating yet but these disruptions are artificially lowering our maximum productive capacity. The demand is there but we can't respond to it with output so the economy just overheats, sellers can take advantage and over charge for products (hence high inflation) and that causes a downturn eventually cuz high prices drain people's savings and purchasing power

[Economy 52,842]

1 hour ago, Neroneau said:

I will NOT let this affect me 

If your job isn't affected you may be better off actually. Most people will be cuz we will get relief from inflation

 

It's the people that loose their jobs or hours. They will feel it

 

This downturn is far from guaranteed tho. War may yet calm down and pandemic supply chain disruptions may yet work themselves out and inflationary pressures drop

 

But China's insistence on COVID 0 is not helping the latter

[AbhainnTirim 368]

14 hours ago, Economy said:

I'm certainly in favour of helping the most vulnerable specifically but given the nature of the economic pressures that are forecast to lead to this downturn no amount of cash would have prevented the downturn in my opinion. Whoever wrote the report is obviously not taking the root cause into account and the basic laws of supply and demand and what happens when the economy reaches the stage in the cycle where demand outstrips maximum productive capacity

 

The economy has an imbalance right now of not enough capacity to meet demand which is why there's so much inflation right now. If you gave people more cash to try to offset the inflation you'd only get even more inflation in this case. Once that ceiling in capacity is reached you cannot increase purchasing power wealth further because the maximum goods and services that can be produced at that time are already being consumed, giving people more money is just increasing currency for the same amount of goods and services meaning even more inflation is what would happen

 

The pandemic disruptions to supply chains and now the war have reduced the economies maximum productive capacity of goods and services from where that ceiling would otherwise be. If we didn't have the war and pandemic perhaps the economy wouldn't be overheating yet

 

As a result the economy is overheating at an earlier stage of recovery than it normally would (overheating is when growth in demand is not able to be met by supply capacity due to either labour shortages, material shortages or investment shortages)

 

Giving people cash credits may disproportionately help the people at the bottom struggling the most by equalizing the burden more evenly since a flat check is a higher percentage of low income earners paychecks than someone earning more meaning for lower income people the checks would be worth even more inflation. But the same recession would still occur regardless the cash infusion would only alter the amount felt by different people. Someone making $20,000 might be helped while someone making $70,000 might loose more purchasing power from the inflation those checks create than they get out of it.

 

It would ultimately be an equalizer not an economic stimulus

Nobody is talking about “prevention”, and I hope I made that clear in my last. This is about softening the blow in the short term. 
 

The facts are showing that sales in the UK took a drop of 1.4% after the month of February this year, according to the ONS, as a result of limited purchasing power, which will hamper COVID recovery and disproportionately impact small businesses who are already struggling with rising overheads. There’s also talk that fuel poverty could be as high as 40% now, with many people who are working struggling to pay their bills now, people who normally would earn a decent enough wage to pay for all their necessities. The supply change pressures in areas like natural gas, electricity and oil are now impacting on other industries, such as retail, because of more of people’s money centralising around paying their energy bills, industries that aren’t necessarily experiencing the same constraints (as evidenced by a reduction in sales). It’s imperative that we offset this economic damage in these industries through financial support to protect jobs and wages. 
 

The constraints facing the energy sector will need long term solutions, we can both accept. I willingly will stand corrected, but to me, the issue with the energy prices is that we’re too dependent on particular forms of energy, most notably gas and oil. A long term strategy is needed to develop a wide range of energy sources, like wind, tidal, solar, geo-thermal etc, to remove the focus on gas and oil, expand the capacity of the energy industry and widen choice and competition for consumers. 
 

And, honestly, financially supporting families to pay their energy bills, it goes beyond economics. Is it morally acceptable that we let kids and the elderly sit in freezing houses because Putin’s destroying another nation? Is it fair that people develop respiratory conditions because they can’t get heat as a result of the energy market struggling with supply chain disruption from a pandemic? These are rhetorical questions, if some haven’t noticed. 
 

One solution the Irish government found was by deducting a €200 credit automatically from people’s energy bills, so the money went directly into the energy bills, which I think is a fair compromise. I would’ve preferred more to help offset the cost, most particularly for lower income welfare recipients and pensioners. 

[Korok 4,272]

Not this  I just bought a condo Ah