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UK officially enters recession

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SouthEastBuses

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The UK has officially entered into recession after the coronavirus crisis caused the economy to contract by a record 20.4% between April and June.

It is the "largest recession on record", the Office for National Statistics (ONS) said, and the first time a recession has been declared in the UK since the financial crash of 2008.

The record-breaking contraction in the second quarter follows a 2.2% fall in the previous three months.

The UK has officially entered recession. So what is your opinion on that? Are you surprised that this happened? Not surprised?
 
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DB

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Closing down a large part of the economy for several months made this a dead cert.
 

Richard Scott

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Why would I be surprised? That's what you get when you lockdown a country for any period of time. I know a few on here are keen on restrictions, well if you are then that's a taster of what's to come. Will lead to mass unemployment an even more underfunded health service and any other public sector organisation for that matter. Quality of life will reduce, people will die due to untreated medical issues, mental health will worsen, you still keen on carrying on with the nonsense? Remember the government is not a bottomless pit of cash, which some people who spout off that the government should do this, fund that etc. someone is paying for it and if there's no money, it won't happen. Simple as that.
 

Bantamzen

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No surprise here, many of us have been warning about this for months. Unfortunately shutting down vast parts of the economy, losing tax revenue & having to support up to 9.6 million people with wages up to 80% or £2.5 per month was always going to have dire consequences. And we are far from out of the woods yet.
 

Mag_seven

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Why would I be surprised? That's what you get when you lockdown a country for any period of time. I know a few on here are keen on restrictions, well if you are then that's a taster of what's to come. Will lead to mass unemployment an even more underfunded health service and any other public sector organisation for that matter. Quality of life will reduce, people will die due to untreated medical issues, mental health will worsen, you still keen on carrying on with the nonsense? Remember the government is not a bottomless pit of cash, which some people who spout off that the government should do this, fund that etc. someone is paying for it and if there's no money, it won't happen. Simple as that.

Problem is that figures such as GDP etc are still abstract to most people and those advocating extreme anti COVID measures will say its all a price worth paying. They will soon change their tune however when they are presented with their P45 (which of course in their view will never happen to them!) and they then have to start applying for scarce jobs in competition with thousands of other applicants.
 

MikeWM

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I posted this elsewhere earlier. Compare the effect of the 'Hong Kong' flu in the late 1960s - a comparable disease in severity and demographic impact. You may have to look quite closely...

1597235779570.png
 

Bletchleyite

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I see Sunak has been gobbing off. This is actively unhelpful, as shouting about there being a recession stops people spending and makes it worse. They really should just stick to reporting actual figures and not influencing behaviour by way of emotive terminology.
 

Scrotnig

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I see Sunak has been gobbing off. This is actively unhelpful, as shouting about there being a recession stops people spending and makes it worse. They really should just stick to reporting actual figures and not influencing behaviour by way of emotive terminology.
Frame this post because I completely agree with you. That hasn't happened all that often of late.

Far too many people in positions of authority, even before this virus, seem to enjoy talking down the economy and destroying what little confidence there may be. See the past two governors of the Bank of England for good examples of this.
 

bramling

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I see Sunak has been gobbing off. This is actively unhelpful, as shouting about there being a recession stops people spending and makes it worse. They really should just stick to reporting actual figures and not influencing behaviour by way of emotive terminology.

Sunak wants to be the big Mr Saviour. Unfortunately his popularity is going to take a massive hit over coming months when the scale of the economic damage dawns on many. £10 off in a restaurant just doesn't cut it.
 

MontyMinerWA

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Relying so heavily on a service based economy is really going to bite us on the bum here.

Unfortunately economic growth pre Covid was pretty weak so we went into this dreadful pandemic in a less than great position.
 

bramling

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Relying so heavily on a service based economy is really going to bite us on the bum here.

Unfortunately economic growth pre Covid was pretty weak so we went into this dreadful pandemic in a less than great position.

Yes we've backed ourselves into a corner with the hospitality industry being so significant. I fear that places like cultural attractions are going to lose out far more in the longer term.
 

Belperpete

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Agreed that this was completely predictable, and indeed financial commentators have been predicting it virtually ever since lockdown started. The newsworthy bit is that the fall in output is only 20% - most commentators were predicting far worse. And likewise the encouraging employment news, where the number being made redundant, although large, is also far less than was predicted.
 

MontyMinerWA

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We need to rebuild our manufacturing base in my view - be more like Germany.
I absolutely concur but it's too late. We should be world leaders in so many fields but we've been lacking a sensible industrial strategy for so long.

Here's a small example. The growth market for aero engines was short haul aircraft, huge orders for these. So why on earth did Rolls Royce go down the route of long haul aero engines? I know Rolls Royce is a PLC but hopefully you get my point.
 

MontyMinerWA

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Yes we've backed ourselves into a corner with the hospitality industry being so significant. I fear that places like cultural attractions are going to lose out far more in the longer term.
I concur. We love the National Trust but they're laying off people left, right and centre. And that's just the start.
 

Richard Scott

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Germany manages it, by selling on quality.
Afraid a lot of this is decent marketing, there are a lot of German products that I've come across that aren't any better than those from other countries (cars being one, how many manufactures have been caught out by diesel emissions, definitely VW and Mercedes. A friend of mine worked for a company that bought Audis for company cars and all needed gearbox replaced at least once). Our problem is that we don't believe in our own products, how many times do you hear people rubbishing Britain or its companies. Then they moan the government does nothing about manufacturing before driving off in their German car.
 

Chester1

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Germany manages it, by selling on quality.

Germany manages it partly because it has an artificially low currency which boosts exports, this is the opposite in Southern Europe and now Germany is starting to pick up the tab. Germany does a lot right but too many Brits love to believe the grass is always greener.

There is a balance between scaring the public and being realistic about the situation. Sunak needs to be honest about the damage to the government finance so more people realise the current situation cannot continue long term.
 

DB

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I absolutely concur but it's too late. We should be world leaders in so many fields but we've been lacking a sensible industrial strategy for so long.

Here's a small example. The growth market for aero engines was short haul aircraft, huge orders for these. So why on earth did Rolls Royce go down the route of long haul aero engines? I know Rolls Royce is a PLC but hopefully you get my point.

Agree with both of you.

The skills have gone from this country now for many of these industries, and there's no easy way to bring them back. Plus other countries dominate the market, and breaking into it would be extremely difficult.
 

DB

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Our problem is that we don't believe in our own products, how many times do you hear people rubbishing Britain or its companies.

In some cases that is justified - e.g. British Leyland was hardly an exemplar!

In other areas - e.g. train research in the 1970s and 1980s - the UK was one of the world leaders, but the rail engineering industry was sold off piecemeal, and now mostly consists of assembly plants owned by companies based elsewhere.

Computer industry is another one - in the early days the UK was one of the countries at the forefront, but now barely any of the leading IT companies are based in the UK - only obvious exception is ARM, but I believe that's owned by a Japanese company now so its continued presence in the UK cannot necessaril be guaranteed.
 

Richard Scott

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In some cases that is justified - e.g. British Leyland was hardly an exemplar!

In other areas - e.g. train research in the 1970s and 1980s - the UK was one of the world leaders, but the rail engineering industry was sold off piecemeal, and now mostly consists of assembly plants owned by companies based elsewhere.
We have all moved on since BL days. Lots of countries produced rubbish cars back then, that's what gave the Japanese an entry into the market.
 

Chester1

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Agree with both of you.

The skills have gone from this country now for many of these industries, and there's no easy way to bring them back. Plus other countries dominate the market, and breaking into it would be extremely difficult.

UK economy is about 1/8 manufacturing vs Germany with 1/5. We could match Germany long term but we will never match what people think Germany does.
 

MontyMinerWA

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Agree with both of you.

The skills have gone from this country now for many of these industries, and there's no easy way to bring them back. Plus other countries dominate the market, and breaking into it would be extremely difficult.
I concur. Given our huge coast line we should be exporting wave / wind turbines to the rest of the world. So why aren't we?

I know we can't compete with orders for commercial shipping but why were we not building cruise liners? Why did we leave it to the Germans and the Italians?

We can't even build our own number power stations! Blood hell. The list goes on.
 

Richard Scott

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I concur. Given our huge coast line we should be exporting wave / wind turbines to the rest of the world. So why aren't we?

I know we can't compete with orders for commercial shipping but why were we not building cruise liners? Why did we leave it to the Germans and the Italians?

We can't even build our own number power stations! Blood hell. The list goes on.
People moan but we are our own worst enemies. How many people actively seek out a British made product (I know sometimes this isn't possible)? I always check where things are made and try and buy a UK manufactured product if I can.
 

DB

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People moan but we are our own worst enemies. How many people actively seek out a British made product (I know sometimes this isn't possible)? I always check where things are made and try and buy a UK manufactured product if I can.

They are often difficult to find! Even a lot of companies which trade on being UK companies actually have it manufactured in the far east (especially electronics).

Not that this is particular to the UK - e.g. Apple trades on its 'Designed in California' statement, but actually it's all made under contract in the far east by the same companies who make similar stuff for all the other brands!
 

Richard Scott

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They are often difficult to find! Even a lot of companies which trade on being UK companies actually have it manufactured in the far east (especially electronics).

Not that this is particular to the UK - e.g. Apple trades on its 'Designed in California' statement, but actually it's all made under contract in the far east by the same companies who make similar stuff for all the other brands!
I agree hence why I said not always possible but plenty of things are made here - lots of cars for example but we seem happy to buy cars manufactured elsewhere then moan that there's no industry (although there is, most of it is exported), well what a surprise.
 

Chester1

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I agree hence why I said not always possible but plenty of things are made here - lots of cars for example but we seem happy to buy cars manufactured elsewhere then moan that there's no industry (although there is, most of it is exported), well what a surprise.

UK car manufacturing leans towards the top end of the market i.e. we export Jaguars and import Kias. Most Brits couldn't afford to buy the average car made in Britain. Even Nissan's Sunderland factory leans towards the higher end of their range.

Lets be honest, if the UK manufacturing grew from 12% to 20% (matching Germany), there would still be millions of Brits with rose tinted glasses moaning. Just look at how the average enthusiast views any train design, assembly or manufacture at any new site. Talgo could invest tremendous amounts in manufacture in Scotland and R&D in Chesterfield and it would never have the support or popularity of an ex BREL site in Derby.
 

MontyMinerWA

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People moan but we are our own worst enemies. How many people actively seek out a British made product (I know sometimes this isn't possible)? I always check where things are made and try and buy a UK manufactured product if I can.
Okay here's an example. We own a two year old Peugeot 208. We'd happily switch to a British built Nissan Leaf but at the moment there aren't enough charging points. Please can you name a British built alternative to the 208?

Please understand that I'm not really arguing against you. I share your frustration. However in terms of buying a car what can my wife and I do?

Unfortunately the Micra is too small for us (assuming that's start built in the North East).
 

Belperpete

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I agree that we could probably compete on quality, but those products are at the expensive end of the scale, for which there is a relatively small market. For cheap, mass-produced products, that most people can afford to buy, I can't see us competing with the third world because we will never compete with their wage rates etc.
 
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