Economic outlook for 2015

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Not your average framer
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Economic outlook for 2015

Post by Not your average framer »

It might be quite informative to look at this:

https://www.gov.uk/government/uploads/s ... 201410.pdf

The information to examine in this document are the comparisons between 2014 and 2015 for CPI (consumer price index), RPI (retail price index), GDP, PSNB and any references to disposable income. I think it paints a rather gloomy picture.

Incomes are not only unlikely to increase much, but the rate of price increases are expected to rise by about 15% compared to this year and the govenment is already cutting expenditure (which is a very blunt instrument), so a lot of people could be financially worse off and this will not help businesses next year.
Mark Lacey

“Life is short. Art long. Opportunity is fleeting. Experience treacherous. Judgement difficult.”
― Geoffrey Chaucer
Not your average framer
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Re: Economic outlook for 2015

Post by Not your average framer »

Perhaps a little explanation would be in order! Page 3 of this HM Treasury document (page 4 of the PDF) shows an average of many independant forecasts for the 4th quarter of the 2014 finacial year compared to the same quarter for 2015. Politians tell us whatever they want us to hear, but the Treasury and most financial institutions are either required to tell the truth, or it is in their best interest to tell the truth.

The differences tell an interesting story. The UK govenment is having difficulty keeping it's promises concerning the economy and it won't be long before there has to be a general election. Somehow or another, the national debit must be substantially reduced before the election and the increases in next years consumer price index and retail price index, strongly suggest that the govenment is planning on increasing the money supply as a means of paying the debit.

Usually increasing the money supply means printing money which also means inflation and the fact that your money and my money will buy less than it does now. If these two indexes remained the same for next year, our money would still buy less, but the rate at which the value of our money declined would not have changed. However, it is not only about to change, but it is about to increase and that means increasing inflation.

There is a limit to how much the govenment can afford to allow inflation to rise, so some of the money that the govenment needs to create has to come from reductions in govenment spending. This is shown in the figures for PSNB (public sector net borrowing) and the figures for next years PSNB show a substantial reduction compared to the current year. This means less borrowing and therefore less interest for the govenment to pay, but this is not the whole story.

The govenment is reducing public sector spending by relatively savage cuts in all manner of services, such as libraries, schools, the number of nurses and police officers, etc, etc. This is taking a lot of money out of the UK economy and a lot of people will be directly affected by these cuts. Some will lose their jobs, others will be worse off, but increasing inflation will means that our business supplies will cost us more, while money will become much tighter for many people.

In many ways, it's not the govenments fault that thing have not been improving, unfortunately our biggest export market is the euro-zone and the economy in the euro-zone is sinking fast, with the Gernan economy being of particular importance. Many German companies and corporations have substantial numbers of employees in this country and as a result, jobs could be at risk and our own economy could be affected if jobs are lost.

I suspect that to maintain our turnover, we may need to be more competitive and give our customers our best deals to persuade them to spend money with us and to maintain our profitability, we will need to find ways of maintaining the differential between our turnover and our cost of sales, so we will all need to be doing things smarter than before. I don't see any end to this recession yet, does anyone else?
Mark Lacey

“Life is short. Art long. Opportunity is fleeting. Experience treacherous. Judgement difficult.”
― Geoffrey Chaucer
Roboframer

Re: Economic outlook for 2015

Post by Roboframer »

Not your average framer wrote:The govenment is reducing public sector spending by relatively savage cuts in all manner of services, such as libraries, schools, the number of nurses and police officers, etc, etc.
Correction - it's not the Government that have made these cuts, it is your local County Council. The government have cut back funding to the Councils and they in turn have made the decisions as to what/where their savings have to be made.

Police have their own budget - if you check your rates bill you will see a percentage is paid to the Police - it is then up to the Police how they spend it.

What about the £2000 the Gov have given back to firms this year for NI premiums???

What about the rates rebates of at least £1000 being paid to small firms this year on top of major discounts, sometimes 100% on small ratepayers under £10,000???

Is your rateable value less than £6000:? then you could qualify for 100% rebate.

Reckon that's a good start.
Pat (Mrs R)

Not your average framer wrote:it won't be long before there has to be a general election.
I'm putting ten quid on next May :-)

We've been through bad times but we (most here) are at most micro-businesses - a 15% drop in annual sales won't cripple us and a 15% increase won't mean we can open two new branches, in fact it might mean not even mean upgrading to a CMC!
Not your average framer
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Re: Economic outlook for 2015

Post by Not your average framer »

Not your average framer wrote:The govenment is reducing public sector spending by relatively savage cuts in all manner of services, such as libraries, schools, the number of nurses and police officers, etc, etc.
You've already answered my point, when you said "The government have cut back funding to the Councils and they in turn have made the decisions as to what/where their savings have to be made".

After a major outcry our own local libraries has been saved, but it will be volunteer staffed from now on, police enquiries desks are a thing of the past in many parts of deven, quite a few of the smaller schools in devon are losing their important parts of their funding and similar things will be happening in other counties.

UK govenments don't do things which affect the nations finances without the treasury giving an indication in advance, so that major organisations know what to expect. Even the start of the recession which started in 2008 was clearly signalled more than one year in advance.

If major institutions and organisations use economic forecasts to know what to expect, why should not small businesses like ourselves. It certainly makes sense to me! I regularly read treasury economic forecasts and they are very informative.
Mark Lacey

“Life is short. Art long. Opportunity is fleeting. Experience treacherous. Judgement difficult.”
― Geoffrey Chaucer
the missus

Re: Economic outlook for 2015

Post by the missus »

with the utost respect, your failure at apparently not understanding my post gives me doubts that you are able to grasp government forecasts without looking to just doom and gloom. :(

You said that the government had cut back on libraries etc.
I corrected that statement by saying it was the local Council who had made those cutbacks, and then you reply with
'you have already answered my point when you said the Government had cut back funding.'

Of course the government has to cut back on funding - you would not be very happy if they allowed continual waste of money being spent by local councils. They cut back to force the councils to relook at their own spending.
Unfortunely, instead of looking at the stupidly high wages they pay themselves, the number of uneccesary jobs demanding high wages etc etc, they plump for the easy options of libraries, youth services etc.


So..............have you claimed your rate rebates yet?
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Re: Economic outlook for 2015

Post by John »

Please continue this discussion on another, more suitable forum.

Lets keep this one a politics free zone.
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