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Re: 'Shock' Contraction in the UK economy
From the BBC Stephanomics blog
Quote:
More interestingly, perhaps, they say we should be encouraged by what's been happening to the the claimant count, and to tax receipts. According to the Treasury, each of those has provided useful early warning, in the past, that something was going seriously wrong with the economy.
The claimant count actually fell very slightly in December, and tax receipts throughout the quarter came in almost exactly in line with the official forecasts - which, in turn, were based on the OBR's forecast of modest growth. That is not something you often observe in a shrinking economy.
There's been some support for this assessment from independent commentators - though remember they are the ones trying to explain why their forecasts were so wrong.
This is what Nida Ali, economic adviser to the Ernst & Young ITEM Club, had to say about today's public finance figures:"Tax receipts seem to be growing nicely and it's interesting to see that VAT receipts were up almost 9% on last December. Though part of this reflects the higher VAT rate (17.5% against 15%), it also suggests greater consumer activity in December than other sources have reported."
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