Sky News business editor Michael Wilson
Recessions don’t come with big signals – in luckier times we’ve been through one before anyone other than the economic anoraks have noticed.
On the other hand, it’s not necessary to wait for the official definition – two successive quarters of shrinking – to call it. If you feel it, as many who are caught up in the US mortgage meltdown do, then you’re in it.
But if a slump is more about attitudes and perceptions, then you won’t be pleased to learn that the world’s most famous investor and the world’s third richest man has pronounced that indeed the US is already in a recession and it will be long and deep.
Warren Buffett, the billionaire ‘sage of Omaha’ runs the hugely successful Berkshire Hathaway global conglomerate, is, if his riches are anything to go by, usually right about these things.
Worryingly, he also noted that shares are ‘not cheap’, by which he means that it’s not a great time to get back in the market.
Now given that we are economically related to our cousins across the Atlantic, in many senses more than our fellow Europeans, we need to take that pessimism on board.
No recession here yet, but when the world’s largest economy does worse than stutter we should beware.
But that’s predictions for you. Economics is, as they say, a dismal science. What of our daily bread?
Getting more expensive for you and me, and its producers, is the answer. The maker of Hovis and Mr Kipling cakes has taken a multi-million pound hit from the soaring costs of wheat, and the cost of servicing its debts. And, in a nutshell, or should that be a husk, is where British households are today.
According to today’s research for the supermarket group Asda, the average cost of living has increased by 4.9% since last year, much more than the official inflation rate, and as fixed-rate mortgage deals end this year, nearly one and a half million people will face higher home loan bills, on average £100 a month more. And this doesn’t include the continuing indebtedness of those who have the maximum and more on their credit cards.
No wonder we hear that the Chancellor is considering trying to meet the public’s concern about their increasingly expensive lives, when in his first Budget next Wednesday.
We are not feeling good.
Well, well..! Interesting to read your comment that we are economically more tied to the USA than the EU. So what exactly, are we in the EU for? Can we have our referendum now please? Can someone tell me who appoints the tax parasites in Brussels, and who approves their budget? It sure ain't me!
Posted by: Meltonmark 11 Mar 2008 18:16:13
Sir
When you put it like that, then indeed the [Loose Ends] emerging from across the pond do bring about much to worry about for the average jo, however, where theres a negative, there is a positive.
For example, Utility Bills and the dreaded Direct Debit. Now, by their very own nature, DD's allow such corporates to dip into your accounts and when they please, save for such guarantees that they carry. However, in the real world we all know trying to get your money back is like pulling out a wisdom tooth. So, how about Darling tell all utility companies, that if they do not allow cutsomers to pay by what is called bill payment via internet/atm banking, for their monthly bills, online discounts WILL apply to all.
Now, that should leave enough cash for the likes of me to get a haircut like yours, dont you think?
Posted by: Khalid 4 Mar 2008 17:56:04