Who do they think they're kidding?

Article Abstract:

There appears to be a widening gap between the actual performance of the British economy and the official pronouncements of government economists. The economic establishment dismisses data indicating weak economic performance as insignificant and not a cause for concern. It continues to paint a bright outlook for the UK economy, using such upbeat phrases as 'temporary inventory adjustment' and 'the pause that refreshes,' despite the slow growth of the economy in the third and fourth quarters of 1995. Government economists justify their perennially optimistic forecasts by arguing that attention should be focused on the average growth rate and that grave downturns or recessions should never be predicted so as not to spook industry and the general public. Nevertheless, the one-year slide in British output and the first quarterly decline in manufactured output seem to be compelling reasons for looking beyond government rhetoric.

Economic forecasting

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Britain's trade deficit: a symptom, not a disease

Article Abstract:

The UK's consistent non-oil trade deficits have long been a source of concern to many observers. A key reason for this is that the country's poor trade figures often generate political controversy and are known to have influenced the outcome of at least one general election. This concern is largely misplaced. An examination of the UK's balance of payments statistics since 1980 reveals that despite consistent non-oil trade deficits, the country's surpluses from oil and invisible trade enabled it to achieve a balance of payments surplus for seven consecutive years during the 1980-1986 period. Furthermore, while the UK has experienced annual balance of payments deficits since 1987, the surpluses generated from private sector capital flows during the period have largely offset these deficits. As a result, the UK has been able to maintain a relatively strong currency with respect to its major trading partners.

Balance of trade

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House price falls: how far, how fast?

Article Abstract:

The downward spiral in the price of UK homes is threatening the economic stability of both owner-occupiers and mortgage lenders. House prices have fallen in four standard regions of the UK, and regional price forecasts project falling prices in nine of 13 regions by the end of 1990. The combination of high mortgage rates, an economic downturn, and the seasonal weakness between November and March indicates a bad year for house prices in 1990. The volume of new house moves has declined between 30-40% in 1989, and falling house prices mean that loans may no longer be fully secured for lenders, threatening an over-exposure of millions of pounds.

Housing, Great Britain

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