Limping For A Generation
27th January 2010
With apologies to The Blow Monkeys for lifting the title of their debut album, (I love a music link), for some reason this phrase popped into my head when the latest quarterly GDP figures were released showing that we have just about limped out of recession.
The political soothsayers have been having a field day showing how we were the first into recession and the last out, and that the road ahead is going to be a frankly tortuous affair. Even Alistair Darling could not rule out the possibility of a dip back into the negative almost on the eve of the election.
The fact is that many economists have been caught a little short yet again with the apparent weakness of the recovery and there will no doubt be a lot more scratching of heads and gnashing of teeth in the days ahead.
So where does that leave us all? Well, I like to think I am a glass half full type of guy, (though my wife may disagree), and to be fair a 0.1% rise is a hell of a lot better than a 0.1% drop or a big fat 0! There is hope!
In fact, the International Monetary Fund, (IMF), has just raised its projection on how much the global economy will actually grow this year. It expects unemployment to stay roughly at the same levels, however they also stated that “a key risk is that a premature and incoherent exit from supportive policies may undermine global growth and its rebalancing”.
Meanwhile the World Economic Forum in Davos has begun which should provide an interesting boxing match between bankers and regulators, with many bankers railing against the Obama plans in the US already.
It is likely to be a heated few days, but everyone needs to understand that for the financial industry to move forward with confidence there needs to be a balance between financial institutions competitiveness and effective regulation.
Too much weight on either side could only add to the issues.
Meanwhile, the mortgage market seems to have a little spring in its step if early enquiry levels are anything to go by. More products are popping up left, right and centre and lenders are starting to get back to doing what they should be doing, lending.
I don’t expect too much to change leading up to the election, with the main issues potentially coming with a hard budget by the new Government, whatever the colour. Together with the end of support like the car scrappage scheme and Quantitative Easing, as well as measures to start cutting the deficit there are some undoubted tough times ahead.
Whilst we all want decisive action to get us out of this mess, as with any issue, there is a danger of being too decisive and over-correcting.
Whether we will indeed be limping for a generation remains to be seen, so sing us out Dr Robert, sing us out.
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.