The Good News thread, local jobs, economy etc

[MooseBreath]

Raising the minimum wage, along with increasing the tax free allowance, is in line with the Conservative's "make work pay" initiative. A good move to further increase the quality of life available for workers as opposed to those on benefits, which should effectively incentivise work thus boosting the economy.

You have to balance that with increased cost of labour of course, but we're talking a rise of only about 10% over two years after years of below inflation increases, so it's only really playing catch up. I would think it's a level of increase that a lively economy should be able to sustain.

Heard on Labour FM (aka radio 4) yesterday that the rise was pointless because they were cutting benefits at the same time. That's the whole point, to reward and incentivise work instead of paying people to do nothing. The fact is now that in two policies - the tax free allowance and the minimum wage - the Tories have done more good for the low paid than Labour did in all their time in office, while also drastically improving the economic outlook for the entire country.

[Webbo]

I must admit I did find it ironic, though not surprising, that the BBC  on the news were giving the argument against the raise in the minimum wage after they've spent the last 3/4 years trying to tell that we're all starving to death and the gap between rich and poor was growing.

[purpleronnie]

Not a tory   but I'm always happy when things go well for the country, so I hope the rise goes through, I understand the difficulty offsetting a rise in the minimum wage against possible unemployment increases etc etc...But I believe it will be a positive step.

[Soar Fox]

Good or bad? £400,000 worth of properties sold for £2

http://www.leicestermercury.co.uk/pound-190-000-building-given-away-pound-1/story-20466427-detail/story.html

[purpleronnie]

Boost to Osborne as IMF upgrades UK growth: Economic outlook has improved by more than any other major nation

• Global watchdog to predict gross domestic product will increase by 2.4%
• The prediction would be far better than the 1.8% forecast three months ago
• IMF will update its World Economic Outlook at 2.30pm on Tuesday afternoon
• Countries including Italy, Russia, Brazil and South Africa face downgrades

ByHugo Duncan

PUBLISHED: 01:54, 21 January 2014 | UPDATED: 10:20, 21 January 2014

+2

Some good news for the Chancellor: The IMF is set to predict the UK's gross domestic product will rise by 2.4% this year

The British economy is in far better shape than expected and the outlook has improved by more than any other major nation, the International Monetary Fund will say today.

The global watchdog looks set to predict that gross domestic product in the UK will increase by 2.4 per cent this year - considerably better than the 1.8 per cent it forecast just three months ago.

The Washington-based Fund is also likely to nudge up its forecasts for the global economy but the upgrade for the UK is expected to be the biggest by far.

Countries including Italy, Russia, Brazil and South Africa face downgrades.

It will come as a further boost for George Osborne just a day after the respected Ernst & Young Item Club said it now expects the UK economy to grow by 2.7 per cent in 2014.

A separate report by global research group IHS said Britain will help drive growth around the world this year.

‘Economies considered dull and old, like the United States, UK, Germany and Japan, will actually be 2014’s new locomotives of growth,’ said IHS chief economist Dr Nariman Behravesh.

The IMF is due to publish an update to its World Economic Outlook at 2.30pm today.

The improved forecasts for the UK will be particularly pleasing for the Chancellor after he last year clashed with the Fund’s chief economist Olivier Blanchard over his economic plan.

Mr Blanchard accused Mr Osborne of ‘playing with fire’ by pressing ahead with austerity but has since been forced to admit that he has been ‘pleasantly surprised’ by the strength of the recovery.

The IMF is expected to put the revival in the UK down to rising confidence and increased lending to households and businesses.

 

 

It is feared, however, that the recovery is based on consumer spending and the housing market rather than business investment and exports.

Britain is still expected to lag behind the US with the world’s largest economy set to grow by 2.8 per cent this year and 3 per cent in 2015.

But the UK will be the strongest economy in Europe and also outpace Japan, the IMF is likely to say.

The ailing French economy, struggling under the policies of Socialist President Francois Hollande, is expected to grow by 0.9 per cent this year - less than half the rate of expansion earmarked for Britain.

 

+2

New stance: It comes after IMF's Economic Counsellor and Director of the Research Department, Olivier Blanchard, pictured, accused Osborne of 'playing with fire' by pressing ahead with austerity

 

Mr Osborne is likely to welcome the IMF’s forecasts as further evidence that his plan to restore the British economy to health is the right one.

Responding to yesterday’s Item Club report, a Treasury spokesman said: ‘In revising their forecast for growth this year up to 2.7 per cent, the Item Club’s report provides further evidence that the government’s long-term economic plan is working. But they also agree with the Chancellor that the job is not yet done. The government will go on taking the difficult decisions necessary to deliver a sustainable recovery for all.’

The improved outlook in Britain and around the world comes amid growing optimism about the state of the global economy.

Hinting at today’s expected growth forecasts, IMF chief Christine Lagarde last week said: ‘The crisis still lingers. Yet optimism is in the air. The deep freeze is behind, and the horizon is brighter. My great hope is that 2014 will [be] the year in which the seven weak years economically speaking slide into seven strong years.’

The Office for National Statistics is next week expected to report that the UK economy grew by nearly 2 per cent last year - the strongest performance since 2007.

Experts at Capital Economic are even more optimistic than the IMF and the Item Club and expect Britain to be the best performing major economy in the developed world for the next two years with growth of 3 per cent in 2014 and again in 2015.

‘The UK economy has leapt towards the top of the international growth table and there are good reasons to think it can stay there,’ said chief economist Jonathan Loynes.

‘The conditions for a sustained period of solid growth would appear to be in place for the first time in six years.’

[Guest MattP]

About time the IMF apologised for their consistent bashing of the austerity measures.

[Zingari]

Lets hope it signals the road to sustained recovery , but;

 

" It is feared, however, that the recovery is based on consumer spending and the housing market rather than business investment and exports"

 

how likely is this going to continue ? 

 

 

​Old Mr Pessimist as usual   

[MooseBreath]

There are a number of left-leaning posters on here whose economic ideas are largely in line with the way France has handled its affairs in recent times.

For a current real-world example of exactly how wrong you are, observe the mess this has created in France as it unravels in the next couple of years, while the conservatives lead Britain into becoming the strongest economy in Europe.

If you watch what's happening, and yet still believe in left wing economic thinking, there is no hope for you.

[leicsmac]

There are a number of left-leaning posters on here whose economic ideas are largely in line with the way France has handled its affairs in recent times.

For a current real-world example of exactly how wrong you are, observe the mess this has created in France as it unravels in the next couple of years, while the conservatives lead Britain into becoming the strongest economy in Europe.

If you watch what's happening, and yet still believe in left wing economic thinking, there is no hope for you.

 

Scandinavia FTW, Moosey. 

[The God Emperor]

Scandinavia FTW, Moosey. 

that old chestnut.

the success of Scandinavia hasn't come from its welfare state. Sweden and Denmark have less state regulations in their markets than the US does and in a lot of areas, more economic freedom. the success of Scandinavia is a combination of inheriting the wealth they made in the 19th century where they had dynamic, laissez faire economies and not getting involved in alot of expensive wars also helped greatly with this. they also seem to be bucking the trend of most of Europe since they have mainly been deregulating their markets since a recession in the 90's.       

[leicsmac]

that old chestnut.

the success of Scandinavia hasn't come from its welfare state. Sweden and Denmark have less state regulations in their markets than the US does and in a lot of areas, more economic freedom. the success of Scandinavia is a combination of inheriting the wealth they made in the 19th century where they had dynamic, laissez faire economies and not getting involved in alot of expensive wars also helped greatly with this. they also seem to be bucking the trend of most of Europe since they have mainly been deregulating their markets since a recession in the 90's.       

 

I never said that it did. But it does come from (as you say) a combination of economic freedom/deregulation and a higher tax rate to keep public services good. If the higher tax rate hasn't discouraged businesses from leaving there, why would it here?

 

Additionally - if they're still going on the wealth they've inherited from the 19th Century they must be doing something right at the present time to keep it working for them after all this time. Not getting involved in expensive wars sounds like a bloody good idea too (though when the rest of the world got involved they did too, to a degree).

 

The point is that whatever they're doing seems to work in terms of quality of life and economic output.

[Alf Bentley]

I never said that it did. But it does come from (as you say) a combination of economic freedom/deregulation and a higher tax rate to keep public services good. If the higher tax rate hasn't discouraged businesses from leaving there, why would it here?

 

Additionally - if they're still going on the wealth they've inherited from the 19th Century they must be doing something right at the present time to keep it working for them after all this time. Not getting involved in expensive wars sounds like a bloody good idea too (though when the rest of the world got involved they did too, to a degree).

 

The point is that whatever they're doing seems to work in terms of quality of life and economic output.

 

Interesting report here on Swedish policies on working hours, childcare, parental leave etc: http://europa.eu/epic/countries/sweden/index_en.htm

 

Here's the Wiki entry on Swedish political history, with a few selected excerpts below (interesting reading):  http://en.wikipedia.org/wiki/Sweden#Political_history

 

"Sweden is an export-oriented mixed economy with a very high standard of living. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Sweden's engineering sector accounts for 50% of output and exports. Telecommunications, the automotive industry and the pharmaceutical industries are also of great importance. 

 

In terms of structure, the Swedish economy is characterised by a large, knowledge-intensive and export-oriented manufacturing sector, an increasing, but comparatively small, business service sector, and by international standards, a large public service sector.  In 2010, it collected 45.8% of the country's GDP as taxes, the second highest among OECD countries and still nearly double of that in the United States or South Korea. Sweden is the fourth-most competitive economy in the world, according to the World Economic Forum in its Global Competitiveness Report 2012–2013. Sweden is ranked fourth in the IMD World Competitiveness Yearbook 2013.

 

Sweden maintains its own currency, the Swedish krona (SEK), a result of the Swedes having rejected the euro in a referendum.  Sweden has one of the most highly developed welfare states in the world. According to a 2012 OECD report, the country had the second-highest public social spending as a percentage of its GDP after France (27.3% and 28.4%, respectively), and the third-highest total (public and private) social spending at 30.2% of its GDP, after France and Belgium (31.3% and 31.0%, respectively). 

 

Historically, Sweden provided solid support for free trade. After World War II a succession of governments expanded the welfare state by raising the taxes. During this period Sweden's economic growth was also one of the highest in the industrial world. A series of successive social reforms transformed the country into one of the most equal and developed on earth. The consistent growth of the welfare state led to Swedes achieving unprecedented levels of social mobility and quality of life—to this day Sweden consistently ranks at the top of league tables for health, literacy and Human Development—far ahead of some wealthier countries (for example the United States). However, from the 1970s and onwards Sweden's GDP growth fell behind other industrialised countries and the country's per capita ranking fell from 4th to 14th place in a few decades.From the mid-1990s until today Sweden's economic growth has once again accelerated and has been higher than in most other industrialised countries (including the US) during the last 15 years. 

 

Sweden began slowing the expansion of the welfare state in the 1980s, and even trimming it back.  Also since the mid-1980s, Sweden has had the fastest growth in inequality of any developed nation, according to the OECD. Nevertheless, it remains far more egalitarian than most nations. In 2007, total tax revenue was 47.8% of GDP, the second-highest tax burden among developed countries, down from 49.1% 2006. 

 

Public sector spending amounts to 53% of the GDP. State and municipal employees total around a third of the workforce, much more than in most Western countries.  Eighty per cent of the workforce is organised in trade unions, which also have the right to elect two representatives to the board in all Swedish companies with more than 25 employees. In December 2008, the number employed in the 16–64 age group was 75.0%.

 

According to Statistics Sweden, the unemployment rate in June 2012 was at 8.8%. Unemployment among youth (aged 24 or younger) in 2012 was 24.2%, making Sweden the OECD country with the highest ratio of youth unemployment versus unemployment in general."

Edited 22 January 2014 by Alf Bentley

[leicsmac]

Interesting reading Alf. Also interesting that they seem to have the same problems getting young people working as the rest of Europe does right now, so it's not all sweetness and light.

[Webbo]

Interesting report here on Swedish policies on working hours, childcare, parental leave etc: http://europa.eu/epic/countries/sweden/index_en.htm

 

Here's the Wiki entry on Swedish political history, with a few selected excerpts below (interesting reading):  http://en.wikipedia.org/wiki/Sweden#Political_history

 

"Sweden is an export-oriented mixed economy with a very high standard of living. Timber, hydropower and iron ore constitute the resource base of an economy heavily oriented toward foreign trade. Sweden's engineering sector accounts for 50% of output and exports. Telecommunications, the automotive industry and the pharmaceutical industries are also of great importance. 

 

In terms of structure, the Swedish economy is characterised by a large, knowledge-intensive and export-oriented manufacturing sector, an increasing, but comparatively small, business service sector, and by international standards, a large public service sector.  In 2010, it collected 45.8% of the country's GDP as taxes, the second highest among OECD countries and still nearly double of that in the United States or South Korea. Sweden is the fourth-most competitive economy in the world, according to the World Economic Forum in its Global Competitiveness Report 2012–2013. Sweden is ranked fourth in the IMD World Competitiveness Yearbook 2013.

 

Sweden maintains its own currency, the Swedish krona (SEK), a result of the Swedes having rejected the euro in a referendum.  Sweden has one of the most highly developed welfare states in the world. According to a 2012 OECD report, the country had the second-highest public social spending as a percentage of its GDP after France (27.3% and 28.4%, respectively), and the third-highest total (public and private) social spending at 30.2% of its GDP, after France and Belgium (31.3% and 31.0%, respectively). 

 

Historically, Sweden provided solid support for free trade. After World War II a succession of governments expanded the welfare state by raising the taxes. During this period Sweden's economic growth was also one of the highest in the industrial world. A series of successive social reforms transformed the country into one of the most equal and developed on earth. The consistent growth of the welfare state led to Swedes achieving unprecedented levels of social mobility and quality of life—to this day Sweden consistently ranks at the top of league tables for health, literacy and Human Development—far ahead of some wealthier countries (for example the United States). However, from the 1970s and onwards Sweden's GDP growth fell behind other industrialised countries and the country's per capita ranking fell from 4th to 14th place in a few decades.From the mid-1990s until today Sweden's economic growth has once again accelerated and has been higher than in most other industrialised countries (including the US) during the last 15 years. 

 

Sweden began slowing the expansion of the welfare state in the 1980s, and even trimming it back.  Also since the mid-1980s, Sweden has had the fastest growth in inequality of any developed nation, according to the OECD. Nevertheless, it remains far more egalitarian than most nations. In 2007, total tax revenue was 47.8% of GDP, the second-highest tax burden among developed countries, down from 49.1% 2006.

 

Public sector spending amounts to 53% of the GDP. State and municipal employees total around a third of the workforce, much more than in most Western countries.  Eighty per cent of the workforce is organised in trade unions, which also have the right to elect two representatives to the board in all Swedish companies with more than 25 employees. In December 2008, the number employed in the 16–64 age group was 75.0%.

 

According to Statistics Sweden, the unemployment rate in June 2012 was at 8.8%. Unemployment among youth (aged 24 or younger) in 2012 was 24.2%, making Sweden the OECD country with the highest ratio of youth unemployment versus unemployment in general."

Timber,iron ore and hydro electricity, all thing that can't be outsourced abroad.

[leicsmac]

Timber,iron ore and hydro electricity, all thing that can't be outsourced abroad.

 

Yep, they do look after their resource industries, don't they? I do wish we'd done/do the same.

[Alf Bentley]

Interesting reading Alf. Also interesting that they seem to have the same problems getting young people working as the rest of Europe does right now, so it's not all sweetness and light.

 

Timber,iron ore and hydro electricity, all thing that can't be outsourced abroad.

 

Yep, they do look after their resource industries, don't they? I do wish we'd done/do the same.

 

Natural resources will always be a factor, but Sweden seems to have used them intelligently. What are British natural resources now? Sea and wind for energy? Some would argue shale gas, but I don't know enough about the pros and cons of that.

 

Globalisation of capital and finance (and labour to a lesser extent) is also bound to affect every country to varying degrees. But, if accurate, the stat that 50% of Sweden's output/exports are from engineering is extraordinary. So, it is possible for Western countries to compete in manufacturing in a global economy....shame that, as the "workshop of the world", we seem to want to rely so heavily on financial services and the acceptance of social squalor - "the Dickensian spiv of the world", is that our aspiration? 

 

One of the things that Sweden shows is  that you can have high taxes, high welfare spending and a successful economy - if the taxes are spent on the right things. The first link in my last post is very interesting - welfare money spent not to keep people on the dole, but to allow more people, particularly mothers, to bring their children up well and still work without massive stress; also, using parental leave to support family life rather than forcing working parents to leave their kids in over-priced nurseries. It hasn't caused all their businesses to bugger off abroad.

 

That's not just a pro-tax, pro-welfare argument. It matters HOW you spend, not just HOW MUCH. The Swedes tax a lot but spend their tax revenues wisely, while the French do not (though they do support their domestic corporations more than we do). The US competes as a low-tax, low-spend economy partly through the dynamism of immigrants, not just by accepting social squalor in some cities. The British right seems to want to do the latter, but not the former.

 

Interesting, too, that Sweden has high union membership - and responsible unions, actively involved on company boards.

 

It would be interesting to know why youth unemployment is so high in proportion to overall unemployment. But then, the same applies here. When UK unemployment was high in the 80s, a lot more of it was focused on middle-aged men made redundant from "old" industries like mining, steel and shipbuilding. Young people are taking a much bigger hit this time, both here and in Sweden. What will the long-term effects of that be, if it carries on for very long?

[Alf Bentley]

Large fall in unemployment to 7.1%, but wages still behind inflation, even though inflation has fallen (pay up 0.9%, inflation 2%):

 

http://www.ft.com/cms/s/0/b55d46b0-8347-11e3-86c9-00144feab7de.html#axzz2r7cRlm8g

 

Doesn't look as if the Bank of England plans to raise interest rates immediately, but unemployment is now only 0.1% above its self-set target for considering a rise in interest rates. With house prices rising and inflation low, how long will it resist and what effects would there be from a rise in mortgage rates, business borrowing rates and saving rates? 

 

How sustainable is this recovery? Starting to look as if we might find out before the General Election, one way or the other...not sure who that's going to be good news for...

[Chilwell_Fox]

I don't think they should raise interest rates for a while even if the unemployment figure does come down to 7% (which wont take long). I think they made that promise when they thought it would take a few years to hit that target

[MooseBreath]

I'm far from an expert on the Swedish economy, but I'm not really seeing why we should be looking at them as a positive example. Just a feq issues I've noted in a quick five minute look online:

- barely any GDP growth

- high unemployment

- heavy reliance on unsustainable industry

- declining education standards

- deflation

- very high house prices

- plans to cut taxes to incentivise exports

None of this seems particularly attractive to me bar the last one which I think would be considered 'unswedish' and more in line with Tory economic policy.

Edited 22 January 2014 by MooseBreath

[Zingari]

I'm far from an expert on the Swedish economy, but I'm not really seeing why we should be looking at them as a positive example. Just a feq issues I've noted in a quick five minute look online:

- barely any GDP growth

- high unemployment

- heavy reliance on unsustainable industry

- declining education standards

- deflation

- very high house prices

- plans to cut taxes to incentivise exports

None of this seems particularly attractive to me.

What about the Swedish burds ?

[Alf Bentley]

I'm far from an expert on the Swedish economy, but I'm not really seeing why we should be looking at them as a positive example. Just a feq issues I've noted in a quick five minute look online:

- barely any GDP growth

- high unemployment

- heavy reliance on unsustainable industry

- declining education standards

- deflation

- very high house prices

- plans to cut taxes to incentivise exports

None of this seems particularly attractive to me bar the last one which I think would be considered 'unswedish' and more in line with Tory economic policy.

 

Short-term trends can be next to meaningless compared to long-term position. If we lose a couple of games and Barnsley win, we'll be in relative decline, but it won't matter unless it's a long-term trend. Man City declined from 1st to 2nd last season.

 

Some international indices:

Human Development: http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index (Sweden 7th, UK 26th)

Quality of Life: http://www.numbeo.com/quality-of-life/rankings_by_country.jsp (Sweden 4th, UK 15th)

GDP per head (PPP - i.e. adjusted for cost of living): http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita (Sweden 14th, UK 21st)

 

- Unsustainable industry? Iron ore is unsustainable long-term, I grant you, but HEP certainly isn't and nor is forestry, provided they're replanting trees. Apparently engineering accounts for 50% of output? I'm surprised that they're so competitive in that field, I admit, but is that unsustainable? Did I miss news of Volvo and Ikea going bust?! 

- High unemployment? Fractionally higher than the UK according to Eurostat data, but both are doing better than the EU average.

 

Not everything is perfect anywhere, of course. Sweden has very high suicide rates, I think (maybe due to high beer prices or the cold, dark winter nights if they can't attract one of the "burds" that Zingari mentions). For decades, though, Sweden seems to have combined high living standards and a high quality of life with high tax and high public spending. That's impossible, isn't it - or maybe low-tax, low-spend isn't the only path to success, if you tax and spend wisely and maintain your social fabric?

[MooseBreath]

http://m.bbc.co.uk/news/business-26239631

Inflation down, the "cost of living crisis" takes another hit.

[purpleronnie]

http://m.bbc.co.uk/news/business-26239631

Inflation down, the "cost of living crisis" takes another hit.

but the 'cost of living' is still rising faster than wages.

[Zingari]

Short-term trends can be next to meaningless compared to long-term position. If we lose a couple of games and Barnsley win, we'll be in relative decline, but it won't matter unless it's a long-term trend. Man City declined from 1st to 2nd last season.

 

Some international indices:

Human Development: http://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index (Sweden 7th, UK 26th)

Quality of Life: http://www.numbeo.com/quality-of-life/rankings_by_country.jsp (Sweden 4th, UK 15th)

GDP per head (PPP - i.e. adjusted for cost of living): http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita (Sweden 14th, UK 21st)

 

- Unsustainable industry? Iron ore is unsustainable long-term, I grant you, but HEP certainly isn't and nor is forestry, provided they're replanting trees. Apparently engineering accounts for 50% of output? I'm surprised that they're so competitive in that field, I admit, but is that unsustainable? Did I miss news of Volvo and Ikea going bust?! 

- High unemployment? Fractionally higher than the UK according to Eurostat data, but both are doing better than the EU average.

 

Not everything is perfect anywhere, of course. Sweden has very high suicide rates, I think (maybe due to high beer prices or the cold, dark winter nights if they can't attract one of the "burds" that Zingari mentions). For decades, though, Sweden seems to have combined high living standards and a high quality of life with high tax and high public spending. That's impossible, isn't it - or maybe low-tax, low-spend isn't the only path to success, if you tax and spend wisely and maintain your social fabric?

all these years i thought a girl was a "bird", but it turns out it's just a corruption of a Norse word "burd" which means bride or maiden ( or possibly it's a shortened form of the English word burden  )

i suppose its a bit like the Leicester term duck being actually short for duchess and nothing at all to do with water fowl  .

 

i'm now making a conscious effort to say "hey up me duch" , and write burd rather than bird   

[MooseBreath]

Yet another massive fall in unemployment today. This is the most vibrant economy and jobs market I can remember for a long time in the UK.