My criticism of the article is that people like Warner conveniently forget that the economic data were good at start of 4th Quarter (October to December of 2010) too. But then it all went pear shaped on GDP (Gross Domestic Product, which basically is an indication of whether the economy is growing or not) going negative apparently due to weather A couple of economic indicators might have bounced relative to a very poor month (December), but this doesn’t mean that (a) they will increase jobs or wages (b) do actual more business and (c) there will be widespread prosperity, since much of the feelgood in the economic data, mentioned in the article, is driven by the big corporation managers’ massive bonuses. They only make up a small percentage of consumers.
I would say therefore Mr Warner has politics in mind when so swiftly dismisses last quarters data as being unrepresentative when faced with just one relative positive survey. It doesn’t end there, The Telegraph then rolled out another Tory commentator http://www.telegraph.co.uk/finance/comment/damianreece/8302064/Clear-signs-of-recovery-mean-the-time-has-come-to-raise-interest-rates.html Damian Reece is saying that interest rates for borrowers should rise because according to the commentator, the economy is growing again. Well just today, a day after that article, the car manufacturers announced a decline of 11% of new car registrations in January, compared to same month last year. That’s a massive drop in output. Then a few hours later, John Lewis (department stores) announced two continuous weeks of declining sales since the end of the clearance period. This has surprised them because it means their new lines and goods are not being bought up as they expected. So this is another nail in the coffin of the nonsense that the Telegraph speaks.
On top of the economic worries announced today, we are still awaiting more assaults on the economy from the government to materialise from their already announced plans. We need to stay cautious through the next 6 months before knowing which way the economy will go. So the Telegraph’s Economists really have no idea because raising interest rates would choke off an already struggling housing market and would push a lot of people, whose living standards are already being eroded by inflation and Tory-led cuts, into struggling with their mortgage payments and that would be the final death knell of the UK Economy. The only people who gain from rising interest rates are the cash rich pensioners and the ultra rich bankers and hedge fund managers who get massive cash bonuses each year.
