This blog supports Scottish Independence. Comments on it, and contents of linked blogs, do not necessarily reflect Munguin's opinions.
Friday, 29 January 2010
British Banking System No Longer Stable and Low Risk: Standard and Poor
We have been lectured till our ears hurt by Gordon Brown telling us how he saved the banking system, saved the world, put us in the best possible position to lead the world out of recession. We in Scotland have had our neighbours insulted by the fourth rate Secretary of State for Scotland telling us that Ireland and Iceland were backward looking basket cases, and that that is how Scotland would have been if it hadn’t had the blessed United Kingdom to bail it out.
So sure enough, when it came, 3 months after the rest of the G20 countries of course, we were somewhat surprised to find that our “leading” was being done from the rear, and our growth figure was in fact only 0.1%. The Chancellor was obliged to say that even this pathetic little figure could be a blip, and that the figures by next month might be negative again.
A further blow came yesterday when the alarm was raised over the Government’s ballooning debt crisis. International credit rating agency Standard & Poor warned in a report that Britain’s banking industry was no longer stable. It was seen as a further sign that the massive deficit that Britain is running might leave the country close to bankruptcy. And it came amid new warnings of a Bank of England interest rate rise. Standard & Poor’ statement said: “We no longer classify the United Kingdom among the most stable and low-risk banking systems globally.”
It seems to me that we are likely to hit the second leg of the recession in the next few months. A growth figure of 0.1% over the period that included the rush to spend that typifies every British Christmas, is hardly a ringing endorsement of the economy. The fact that unemployment reduced slightly over this period is also not terribly surprising. As anyone who has worked in the employment business could tell you, it happens every year.
But January and February are always hard months for businesses. As well as the credit card bills landing on the mat, there will be the yearly pay offs in shops and restaurants, bars and clubs that mark the end of the spending spree and return to normal.
I wonder how long it will be before the inflation that the quantitative easing is bound to set in train, will start to hit us and add to the misery?
Posted by Anonymous at 17:56
Labels: Gordon Brown, Inflation, Jim Murphy, Recession, Standard and Poor
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I have it on the highest authority that this is not a "blip" and that there will be no boom and bust!ReplyDelete
Well, that's a big relief to us all Brownlie...we can all rest easy in our beds... :-) and rejoice at that news.ReplyDelete
Just glad my job is secure, unless people stop using toilet rolls for some reason or another.ReplyDelete
See you on the other side, hope you remain secure in employment.
The new risk is from interest rate rises, as Lord Lawson explained on Question Time.ReplyDelete
Think of how much it shall be to finance the UK debt if interest rates rose by even just 0.5%? What then would have to be cut? Or if the triple A classification is downgraded?
This next GE may not be one worth winning..
QM: Fortunately my business is the business of getting people into work, so there's no shortage of material for that. On the other hand there may be no money for it either.ReplyDelete
Toilet rolls should be safe particularly now that not so many people can afford a daily newspaper, and chips aren't wrapped in them any more...
Good luck to you. I hope for plenty of...well..er.. business for you.
Indeed it is a scary prospect Dean. In the meantime, many, particularly older, people were dependent on higher interest rates in order to make ends meet.ReplyDelete
No one has bothered thinking of them in the current low interest rate situation.
He's certainly been a crap Prime Minister for the elderly....well, and everyone else.
Good old Gordon leading from behind as usual.ReplyDelete
Such a shame for Spud that both the arc of insolvency countries he mention have higher growth rates than the UK so that even if Scotland had gone down that avenue as an independent country it would have recovered quicker and had higher growth. That is indeed the sort of insolvency we want in Scotland. Lets not even mention Norway a country that based most of its economy on oil and as far as I know did not have a recession at all.
And if I were Brian Cowen I would smack Spud right in the teeth and serve him right.ReplyDelete
It's a bit scary that growth is a tiny 0.1% despite £200Bn of printing money, Christmas shopping, car scrappage scheme and 0.5% interest rates. I fear a massive crash is looming. Watch out for an early election !ReplyDelete
Munguin: Despite the fisty cuffs actions of Iain Gray in parliament a few weeks ago, I doubt even Spud would involve himslef in physical violence. (If he did a puff of wind would blow him over.) Mr Cowan almost undoubtedly wouldn't. He must have a patience of a saint and the manners of a Swiss finishing school graduate. He stood next to Brown the other day at Stormont and didn't fall asleep or even yawn as Brown jawed for what seemed like half my life time.ReplyDelete
Anon: I can't imagine that Brown will now go a minute before the day he has to, but frankly, if he did I don't think it would make any difference. Dean has written a more detailed piece over at New Right. I honestly don't think the Tories have any answers to this mess:ReplyDelete
I'll read Dean's blog ta.
I think labour's problem is that the quarterly figures will be out in April and if they're bad it will be even worse for Labour. Plus Gordons Chilcott visit and subsequent follow up interviews with Straw etc.
Things can only get worse?