> OK Economy people riddle me this
> The BOE and Government states we are growing
> faster than other economies
> However when calculated in Dollars our GDP (last
> years in the link) will have shrunk
> and not only that we will have fallen behind
> France since June 16. Also if the
> pound tumbles after May invokes article 50 we
> could fall behind India putting us
> 7th in the world (we were 5th). No doubt in
> France our economic performance is being
> reported in Dollars.
> Some people say there is a danger of us even being
> relegated from the G7 and the pound
> losing its status as a reserve currency yet
> everybody saying the economy is great and
> the BOE apologising.
Nominal GDP is still expected to grow but at a slower rate in the coming years, mainly due to Brexit uncertainty. It has already fallen in Construction, Agriculture & Industry but was offset by increases in Services. However the effect of the devaluation in sterling will lead to a reduction of GDP measured as PPP [Purchasing Power Parity] & this will affect not only the UK ranking but also the UK capacity to perform internationally.
We have already fallen behind France
See the following comment from the Wikipedia article
"In the third quarter of 2016 wages were still 7% below the level they had been at prior to the Great Recession in real terms. The previous 10 years had been the worst decade for real wage growth since the 1860s. Mark Carney, Governor of the Bank of England, described it as a lost decade. Productivity was 16% below the long-term trend."
There are two systemic issues in the current economy 1] Distribution - between regions & income/wealth levels experienced by different levels in society. 2] productivity - Krugman has made the comment "“productivity isn’t everything but in the long run it is almost everything” Krugman was talking about the determinants of growth, and hence living standards, in the economy over the longer-run. The raw numbers, looked at over long spans of history and large cross-sections of countries, suggest Krugman is right.
The effects of any improvement in the economy have been skewed & not everyone can recognize the claimed improvement.
Reserve currency ststus - SDR
The respective weights of the U.S. dollar, euro, Chinese renminbi, Japanese yen, and pound sterling are 41.73 percent, 30.93 percent, 10.92 percent, 8.33 percent, and 8.09 percent. These weights were used to determine the amounts of each of the five currencies included in the new SDR valuation basket that took effect on October 1, 2016 & are set every 5 years but also adjusted daily taking relative currency values into account. The next review is in 2020 & yes, the UK could fall out of being a reserve currency or have its weighting reduced. Sterling has been falling as an influence since the creation of the SDR in 1969.
Andy Haldene is a great economist and has been very hard on himself. He is a down to earth person and well grounded without any airs or pretensions. We all admit to failing to measure the uncertain & irrational elements in the economy & have to do better in the future at evaluating the seemingly irrational micro behaviours that can radically influence the macro outturn. Comparing economic forecasting to weather forecasting is a bit tongue-in-cheek - we don't have the luxury of having multiple satellites broadcasting real-time information that we can use. Much of our data is lagging & the uncertainty data is mainly compiled from social feedback & analysis which is subjective & varied.
Brexit is a unique scenario & is made more so due to the lack of information/direction coming from the government. Who knows what is inside any of their heads - Brexit is Brexit; Red, white & Blue Brexit; more like BS Brexit; - we are in a state of suspended animation until this dormant government actually says/does something comprehensible & that could be made more difficult in the light of whatever the Supreme Court might rule.
We are directionless policy-wise & we can only wait & see.
Addendum - The Economist article on May is telling. They don't make commentaries lightly but their Theresa Maybe tag is hard-hitting & timely. The article was obviously written by a Tory sympathizer but they spared her little and characterized her openly as a personification of Eden rather than a Thatcher reincarnation.
Let's hole it doesn't turn into Theresa Mayday....Mayday...Mayday...
Edited 1 time(s). Last edit was 2017:01:06:13:05:25 by Lordship 516.