What next for the UK Economy - 2020/21 - Recession? House prices? Unemployment?

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LE
Book Reviewer
Why don't they simply re offer these on the lease market at a cheaper price ?
Instead of paying cash up front ( mostly involving credit anyway ) people can drive them by paying monthly on a DD .
The only thing stopping me leasing is the price of leasing new cars .

I'd guess it is merely an accounting thing.... Depreciation defined as 3 years for certain categories. Which for some things seems a bit short, like cars, for others it can feel like an eternity, like laptops.

I worked for BCA for a while as a temp job and could not work out how the lease companies made money... Took a BMW M5 which was 3 years old and 25k miles to a dealer and they crayoned £13k on the windscreen. So I looked it up and that model was a £43k car supposedly from new.... Available on lease for between £250 and £300 a month.

Unless they are getting almost 50% discounts from the manufacturers or some accounting trick due to depreciation then the economics of it didn't immiediately make sense to me.

Meanwhile driving some crappy Citroen to the firm which fixes minor defects before auction and someone ran into the back of me. Only damage was a dent in the tailgate and car seemed in very decent nick apart from being.... french. It was written off though as beyond economic repair so their margins can't be very high.
 
I'd guess it is merely an accounting thing.... Depreciation defined as 3 years for certain categories. Which for some things seems a bit short, like cars, for others it can feel like an eternity, like laptops.

I worked for BCA for a while as a temp job and could not work out how the lease companies made money... Took a BMW M5 which was 3 years old and 25k miles to a dealer and they crayoned £13k on the windscreen. So I looked it up and that model was a £43k car supposedly from new.... Available on lease for between £250 and £300 a month.

Unless they are getting almost 50% discounts from the manufacturers or some accounting trick due to depreciation then the economics of it didn't immiediately make sense to me.

Meanwhile driving some crappy Citroen to the firm which fixes minor defects before auction and someone ran into the back of me. Only damage was a dent in the tailgate and car seemed in very decent nick apart from being.... french. It was written off though as beyond economic repair so their margins can't be very high.
Your maths are way out , you cant lease a £43k car for £250-£300 a month unless you pay a huge deposit.
 
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Another scrappage scheme perhaps ? Then people can buy up these three year olds
They still haven't scrapped the ones from 2009 , but never mind , as I have a plan for them , too . I would re write the Scrappage laws so that the classics can be sold at auction
There are a few Youtube videos of blokes who've broken into / " wandered " into scrappage scheme holding sites and go " Ohhh " and " Argh " at various appreciating classics
 
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Indeed - which is why the Government is offering bail out loans. The issue is with no sign of return to revenues that will support the cost base, its becoming a stark choice for businesses in that position. If there are no further bail out loans and furlough is ending, then companies will go off a cliff edge into administration.

Grim

We were offered one of the loans recently - a quick call to our accountant conffirmed our decision not to take it. Just as you say, it will need to be repaid and you cannot, at the present time at least, assume that your income will cover the repayments on top of the usual admin costs of running a business.
 
We were offered one of the loans recently - a quick call to our accountant conffirmed our decision not to take it. Just as you say, it will need to be repaid and you cannot, at the present time at least, assume that your income will cover the repayments on top of the usual admin costs of running a business.

Deloitte and KPMG run weekly briefings on the state of play. I've not attended on for donkeys. As far as I can see the Government is propping up the Healthcare supplier base - there are 175,000 suppliers to the NHS and HS2 are propping up huge swathes of the construction and building sector - between them, they spend about 450bn per annum. Unfortunately we are in neither sector..............

I wonder how grim it is out there at the moment? The business press is very quiet
 
Deloitte and KPMG run weekly briefings on the state of play. I've not attended on for donkeys. As far as I can see the Government is propping up the Healthcare supplier base - there are 175,000 suppliers to the NHS and HS2 are propping up huge swathes of the construction and building sector - between them, they spend about 450bn per annum. Unfortunately we are in neither sector..............

I wonder how grim it is out there at the moment? The business press is very quiet

We are very busy in the hobby industry - people can't go out and spend money or go on holiday so our customers are indulging in their hobbies..

I have spoken to a builder and an electrician (both self employed) over the past week (both of whom have being doing some work on my house) and they are booked up for weeks ahead. People are having their properties repaired, renovated or extended for the same reasons. Can't go anywhere so do the house up. I daresay that plumbers and painter/decorators are the same.

These are usually the people, like us, who suffer from a financial depression. This time it has worked out in their favour.

It's an ill wind as they say...
 
House prices are up 12% on last year thanks to Rushi`s stamp duty wheeze unfortunately his colleagues at the Treasury & BoE are still getting printers ink on their hands with all the QE

QE debts are pilling up and I don't think that there is the political will to change that, all politicians are saying now is the time to for the Government to borrow more money as interest rates are low.

Things may change - USA they have just handed out $1500 cheques to everyone, returns on US bonds on the increase - I am seeing inflation with increasing - prices of things going up where I shop and there are also a myriad of shops and business just waiting to recoup the lost revenue, and indeed a wave of unspent money just waiting for the dam to be opened

If things pick up in the US the UK will have to increase interest rates

There is an increase of young people buying shares and new mobile apps which have suckered people into buying tech shares - the apps on the mobile phone makes it very easy, seen this trend a couple of occasions in my life time (obviously pre mobile phones) always ended in grief for the majority of unlucky punters


Archie
 
We are very busy in the hobby industry - people can't go out and spend money or go on holiday so our customers are indulging in their hobbies..

I have spoken to a builder and an electrician (both self employed) over the past week (both of whom have being doing some work on my house) and they are booked up for weeks ahead. People are having their properties repaired, renovated or extended for the same reasons. Can't go anywhere so do the house up. I daresay that plumbers and painter/decorators are the same.

These are usually the people, like us, who suffer from a financial depression. This time it has worked out in their favour.

It's an ill wind as they say...

Some are seeing massive growth and others have seen a collapse in revenues - its all about the industry sector you are in.

generating revenues from new business sales is murder as you are entirely dependent on people reading bloody emails, and I dont know about you but my mailbox is full of junk every day
 
Deloitte and KPMG run weekly briefings on the state of play. I've not attended on for donkeys. As far as I can see the Government is propping up the Healthcare supplier base - there are 175,000 suppliers to the NHS and HS2 are propping up huge swathes of the construction and building sector - between them, they spend about 450bn per annum. Unfortunately we are in neither sector..............

I wonder how grim it is out there at the moment? The business press is very quiet
Retail , tourism , travel , hospitality , charities , airlines , coach companies , service companies such as office cleaning companies , the railways are all dead in the water
As far as I can see , the only people making money are healthcare , Amazon , the supermarkets , Costas coffee , haulage , deliver companies and deliveroo
 
Retail , tourism , travel , hospitality , charities , airlines , coach companies , service companies such as office cleaning companies , the railways are all dead in the water
As far as I can see , the only people making money are healthcare , Amazon , the supermarkets , Costas coffee , haulage , deliver companies and deliveroo

Anyone who is in food, either as a retail outlet or in the supply chain is OK.

Some retail market segments are fine, and therefore people in their supply chains

About 70% of the healthcare supply chain is OK.

Construction is managing from what I can see, although as I say, the £217.00 bn HS2 are spending is helping somewhat.

A lot of things are either broken, part broken or completely fecked

The US big tech companies are fine.

For the most part its not great out there I'd say, but its very difficult to tell
 
Most small retail shops have had to close but should still survive as legit retail businesses have received £20k and more so far in grants.
 
Some really interesting POVs in this thread.
I have gone ahead and tried to buy a house. WTAF, it is totally crackers.

Depending who you speak to, if the economy is heading for a recession and 6%+ unemployment then the housing market is going in totally the opposite direction. I think it is more than just the Stamp Duty holiday.

A friend who does a bit of property development also says its bonkers. His theory is that people who have lost money elsewhere (e,g, markets, commercial property) are now piling back into residential property.
He was contacted by an estate agent about a house, chap left a message. By the time he got round to ringing the guy back less than 24hrs later there had been nearly 200 enquiries.

I saw a house go on RM. 50s build 4 bed semi, bit of a project as the elderly occupants had passed on.
It was listed on RM on the Tue. By Wed PM they had pulled the ad as they had so many enquiries.
They had 25 viewings scheduled for Thu & Fri. I went in 2.5% over list price.... no chance.

Then comes the next issue. Spotted a nice little project house. (I recommend the Property Log plugin for your Google browser. Shows the whole listing and price history on RM.)
A bit of back and forth and we settle 5% under list price. However mortgage valuer then down values it by 10%! The vendor won't budge, even though any other purchaser is probably going to end up in the same position. I've since seen 2 or 3 more houses that were going to end up going the same way.

This is the other problem. the media (esp. the Daily Heil) is telling everyone their house is worth a fortune, so some are putting the price up; even if they have been sat on the market for a while and haven't sold yet.
The Estate Agents are also being optimistic as it benefits their commission.
But the surveyors are being very cautious as if there is a crash they don't want the lenders coming after them like they did in 2008.
The lenders don't care as it means buyers will have to put more money in and have more skin in the game.

Its totally bonkers and I'm struggling to get my head round it.

<rant on> Also I fcuking hate it when estate agents call a house 4 bed and then list one room as a "dining room/bedroom" or "lounge/bedroom". NO, its a 3 bed house you tw@s; otherwise by that rationale most houses would have 6 bedrooms". AND stop taking stupid Instagram style pictures of the house, i.e. weird angles zoomed in on strange features or using stupid filters and lenses. I want to see the whole room/garden/house as it really looks you idiots. <rant off>
 

Flight

LE
Book Reviewer
Some really interesting POVs in this thread.
I have gone ahead and tried to buy a house. WTAF, it is totally crackers.

Depending who you speak to, if the economy is heading for a recession and 6%+ unemployment then the housing market is going in totally the opposite direction. I think it is more than just the Stamp Duty holiday.

A friend who does a bit of property development also says its bonkers. His theory is that people who have lost money elsewhere (e,g, markets, commercial property) are now piling back into residential property.
He was contacted by an estate agent about a house, chap left a message. By the time he got round to ringing the guy back less than 24hrs later there had been nearly 200 enquiries.

I saw a house go on RM. 50s build 4 bed semi, bit of a project as the elderly occupants had passed on.
It was listed on RM on the Tue. By Wed PM they had pulled the ad as they had so many enquiries.
They had 25 viewings scheduled for Thu & Fri. I went in 2.5% over list price.... no chance.

Then comes the next issue. Spotted a nice little project house. (I recommend the Property Log plugin for your Google browser. Shows the whole listing and price history on RM.)
A bit of back and forth and we settle 5% under list price. However mortgage valuer then down values it by 10%! The vendor won't budge, even though any other purchaser is probably going to end up in the same position. I've since seen 2 or 3 more houses that were going to end up going the same way.

This is the other problem. the media (esp. the Daily Heil) is telling everyone their house is worth a fortune, so some are putting the price up; even if they have been sat on the market for a while and haven't sold yet.
The Estate Agents are also being optimistic as it benefits their commission.
But the surveyors are being very cautious as if there is a crash they don't want the lenders coming after them like they did in 2008.
The lenders don't care as it means buyers will have to put more money in and have more skin in the game.

Its totally bonkers and I'm struggling to get my head round it.

<rant on> Also I fcuking hate it when estate agents call a house 4 bed and then list one room as a "dining room/bedroom" or "lounge/bedroom". NO, its a 3 bed house you tw@s; otherwise by that rationale most houses would have 6 bedrooms". AND stop taking stupid Instagram style pictures of the house, i.e. weird angles zoomed in on strange features or using stupid filters and lenses. I want to see the whole room/garden/house as it really looks you idiots. <rant off>

Just sold my house the other day and I did feel I got a got deal out of it. Took bloody ages though as everyone and his dog uses covid as an excuse for everything. In particular the local authority searches....

I sold it as I'm expecting a crash, and places with large gardens I thought would be in demand due to covid restrictions. Then again I bought it on a fixed rate mortgage 10 years ago as I expected inflation so I'm not claiming to be a financial soothsayer.

After I had accepted an offer roughly at, what I thought was optimistic, asking price suddenly several previously very low bidders jumped in. But I chinned them off.... The buyer definitely wanted it and wasn't going to muck around.

Apparently people have been spending lots of money on houses generally... Furniture, decorations and the like. Good time to move if you are furloughed.

Doubt it'll last though.
 
Just sold my house the other day and I did feel I got a got deal out of it. Took bloody ages though as everyone and his dog uses covid as an excuse for everything. In particular the local authority searches....

I sold it as I'm expecting a crash, and places with large gardens I thought would be in demand due to covid restrictions. Then again I bought it on a fixed rate mortgage 10 years ago as I expected inflation so I'm not claiming to be a financial soothsayer.

After I had accepted an offer roughly at, what I thought was optimistic, asking price suddenly several previously very low bidders jumped in. But I chinned them off.... The buyer definitely wanted it and wasn't going to muck around.

Apparently people have been spending lots of money on houses generally... Furniture, decorations and the like. Good time to move if you are furloughed.

Doubt it'll last though.
You raise a good point and it’s a point that’s been raised by previous posters, but your ‘doubt it will last’ is a sharp observation.

like many we’ve had work done and all the tradesmen have said they’ve never been busier.

a chunk of that economy is a cash economy so its great that people are busy but not so hot for the revenue which with government borrowing as it is, needs tax revenues.

HMRC are getting less sympathetic to businesses in trouble looking to put ‘time to pay‘ arrangements in place. I don’t think it’s long before real businesses (as opposed by cash in hand ‘man in a van’ jobbing sole tradesmen) begin to fail in greater numbers.

the issues in the economy are being ignored by the press but all the signs of people struggling are out there. Don’t be fooled by FTSE share prices - take a look at interim results and see Chairman’s statements trying to make the best out of a croc of shit. None of it makes sense
 
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A mate's daughter works for a well known building society and was one of the society's top mortgage sellers in the country, at the end of last year she was pulled off mortgage sales and trained up for repossessions , she's already struggling to cope with the work load.
 
Inflation down to .4% in Feb 2021

BBC business news

The UK's inflation rate unexpectedly fell to 0.4% in February, down from 0.7% in January, as the cost of clothes and second-hand cars tumbled.

The Office for National Statistics (ONS) said there had been a rise in the cost of petrol and diesel.
But that impact on consumer prices was more than offset by downward pressures, which also included falls in the cost of travel and toys.
February is traditionally a month where clothing prices would rise.
However, ONS deputy national statistician, Jonathan Athow said: "The impact of the pandemic has disrupted standard seasonal patterns."

Never believed the inflation rate after Brown change the measure used to uprate pensions


Archie
 
Inflation down to .4% in Feb 2021

BBC business news

The UK's inflation rate unexpectedly fell to 0.4% in February, down from 0.7% in January, as the cost of clothes and second-hand cars tumbled.

The Office for National Statistics (ONS) said there had been a rise in the cost of petrol and diesel.
But that impact on consumer prices was more than offset by downward pressures, which also included falls in the cost of travel and toys.
February is traditionally a month where clothing prices would rise.
However, ONS deputy national statistician, Jonathan Athow said: "The impact of the pandemic has disrupted standard seasonal patterns."

Never believed the inflation rate after Brown change the measure used to uprate pensions


Archie

Torygraph

Four to 5pc inflation by the end of the year? That’s not something we have in our forecasts, Andrew Bailey, Governor of the Bank of England, said in a recent radio interview to mark his first, turbulent year in the job. In point of fact, it is, though admittedly it forms no part of the Bank’s central projection.
But it is very much in the Bank’s range of possibilities, and one moreover which in view of today’s extreme levels of uncertainty is judged rather more likely than normal. In its latest February forecasts, the Bank’s Monetary Policy Committee judged there to be a one in three chance of inflation being both below zero, and above 4pc by the end of this year.
We already know what the Bank plans to do if the former of these possibilities is the way it goes: impose a negative interest rate. Banks have been asked to prepare for just such an eventuality. Far less certain, however, is how it responds if inflation follows the latter trajectory. Does it come down hard on the rise in prices by increasing interest rates, or does it choose to treat the phenomenon as a temporary spike that can be safely ignored?

More to the point, can deeply indebted Britain actually afford a meaningful rise in interest rates? This is not just a question for the UK: the same can be asked of the world economy as a whole.
For illustrative purposes, let’s assume that the UK’s entire, £5.5 trillion (roughly 270pc of GDP) stock of public and private non-financial sector debt is linked to Bank Rate. A one percentage point rise in short-term rates would add £55bn to annual debt servicing costs. At 2.75pc of GDP, this would be a massive potential hit to demand. In the real world, of course, much of this debt is fixed rate, not variable. That lessens the impact somewhat. But only somewhat.
As the Office for Budget Responsibility has observed, the effect of extensive quantitative easing is to shift a great slab of the national debt from long-term fixed to short-term variable rates. For now, with Bank Rate at just 0.1pc, that’s extremely helpful to the Government, in that it can borrow with impunity at virtually no cost.
But it severely restricts the Bank of England’s ability to raise rates in future without severely damaging the public finances, never mind the impact on overgeared households and businesses.
None of this matters, of course, if there is no inflationary threat. Many of those warning of it tend to be the same people who were also sounding the alarm after the financial crisis more than a decade ago; their concerns were proved comprehensively wrong. Are they not crying wolf again? The US saltwater economist Paul Krugman has been unrelenting in his derision. The lesson of the 2010/11 crisis, he notes, is “don’t panic”; there will be no return to 1970s style stagflation.

Well, maybe, but as Andy Haldane, chief economist at the Bank of England, observed in a recent speech, the chances of it are a good deal higher this time around than last. Haldane is something of an outlier among policymakers on these matters, but there are lots of reasons for thinking he’s right. Let’s briefly count the ways.
For a start, there has been considerably more fiscal and monetary support this time around than last. Furthermore, it takes place against the backdrop of a very odd looking downturn which has nothing to do with the normal ups and downs of the business and credit cycles. Rather, it is an induced recession that will correct itself of its own accord the moment the pandemic is over. Any long-term scarring is therefore likely to prove relatively limited, with UK unemployment expected to peak at little more than 6pc, extraordinarily low by the standards of most recessions.
What is more, people have not been able to spend in the way they would normally, resulting in a large buildup of household and corporate savings.
At least some of this will get spent as the restrictions lift. Publicans and other businesses badly affected by lockdown are almost bound to raise their prices quite considerably in an effort to recoup losses. Starved for more than a year of the ability to spend, consumers won’t much care what it costs. They’ll pay almost anything for a pint in the pub. In time, these rising prices will pull earnings up behind them, threatening a classic inflationary spiral of rising price expectations and wages to match.
 
@KnightsofRowallan can you tell me more about this how can I load that plug in

Many Thanks

Archie
I am not affiliated with it in anyway, make sure your PC security is up to date, etc.
I also recommend DuckDuckGo for wbe browsing.

So I got it from the Chrome Web store:


Screenshot (52).png

I have bunged a few quid their way as it seems pretty fair as its a fairly handy tool.
Basically you'll have the little house icon on your chrome toolbar (see top right of pic)

and when you go on RM you get this sort of thing
Screenshot (51).png

works fairly well, sometimes you need to refresh the page to get it to work and it doesn't always work on your saved property page.
Sometimes when RM updates their webpage it takes a few days for them to adjust.

But it pretty good on the whole. It will also sometimes pick up houses that have been taken off RM but then reappeared/relisted. I've noticed that houses in your saved list if taken off RM but then relisted will appear back in the saved list if you haven't deleted it.
 

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