Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20
China Recovered in Q2. Will the Red Dragon Sink Gold? - 23rd Jul 20
UK Covid19 MOT 6 Month Extensions Still Working Late July 2020? - 23rd Jul 20
How Did the Takeaway Apps Stocks Perform During the Lockdown? - 23rd Jul 20
US Stock Market Stalls Near A Double Peak - 23rd Jul 20
Parking at Lands End Car Park Cornwall - UK Holidays 2020 - 23rd Jul 20
Translating the Gold Index Signal into Gold Target - 23rd Jul 20
Weakness in commodity prices suggests a slowing economy - 23rd Jul 20
This Stock Market Stinks - But Not Why You May Think - 22nd Jul 20
Protracted G7 Economic Contraction – or Multiyear Global Depression - 22nd Jul 20
Gold and Oil: Be Aware of the "Spike" - 22nd Jul 20
US Online Casino Demographics: Who Plays Online For Money? - 22nd Jul 20
Machine Intelligence Quantum AI Stocks Mega-Trend Forecast 2020 to 2035! - 21st Jul 20
How to benefit from the big US Infrastructure push - 21st Jul 20
Gold and gold mining stocks are entering a strong seasonal phase - 21st Jul 20
Silver Eyes Key Breakout Levels as Inflation Heats Up - 21st Jul 20
Gold During Coronavirus Recession and Beyond - 21st Jul 20
US Election 2020: ‘A Major Bear Market of Political Decency’ - 21st Jul 20
Summertime Sizzle for Gold and Silver - 21st Jul 20
Overclockers UK Custom Built PC Review - Delivery and Unboxing (3) - 21st Jul 20
Will Coronavirus Vaccines Become a Bridge to Nowhere? - 20th Jul 20
Stock Market Time for Caution?  - 20th Jul 20
ClickTrades Review - The Importance of Dynamic Analysis and Educational Tools in Online Trading - 20th Jul 20
US Housing Market Collapse Second Phase Pending - 20th Jul 20
Capitalising on the AI Mega-trend - 20th Jul 20
Getting Started with Machine Learning - 20th Jul 20
Why Moores Law is NOT Dead! - 20th Jul 20
Help the Economy by Going Outside - 19th Jul 20
Stock Market Fantasy Finance: Follow the Money - 19th Jul 20
Did the Stock Market Bubble Just Pop? - 19th Jul 20
Quick Souring of the S&P 500 Stock Market Mood - 19th Jul 20
The Six-Year Jobs Recession - 19th Jul 20
Silver Demand Exploding! - 18th Jul 20
Tesco Scraps Covid Safe One Way Arrow Supermarket Shopping System - 18th Jul 20
The Rise of Online Pawnbroking - 17th Jul 20
Gold Rallies Together With U.S. Covid-19 Cases - 17th Jul 20
Gold & Silver Measured Moves - 17th Jul 20
The Bizarre Mathematics Of How Negative Interest Rates Create Stratospheric Profits - 17th Jul 20
From a Stocks Bull Market Far, Far Away, Virus Doomsday Scenerio! - 16th Jul 20
Fiscal Cliffs and the Self-destructing Treasury - 16th Jul 20
Dow Stock Market Crash Watch - Update - 16th Jul 20
Gold & Silver Gaining on US Dollar Weakness - 16th Jul 20
How to Find the Best Stocks to Invest In - 16th Jul 20
Overclockers UK Custom Build PC Review - 2. System Build Changes Communications - 16th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Britain in Freefall as Economy, Housing Market and Labour Votes Crash

Politics / UK Economy Jul 25, 2008 - 05:56 PM GMT

By: Nadeem_Walayat

Politics Best Financial Markets Analysis ArticleLabour lost the Glasgow East by-election in the early hours of this morning which was the third safest Labour seat in Scotland.This was by far the worst election result in Labour's history and suggests a collapse in Labour's vote and thus puts Gordon Browns Premiership in the firing line, strongly suggesting an leadership challenge will occur this year possibly at Septembers party conference.


Following hard on the heels of the abysmal election result, the government (ONS) released GDP growth data for the second quarter today which gave hard evidence of an economy teetering on the brink of recession by registering GDP growth of only 0.2%, this follows the poor first quarter growth of 0.3% and thus GDP growth so far for the year stands at just 0.5%. This weakness is a far cry from economic forecasts of late last year that ranged between 2% and 2.5% for 2008, in the midst of which the Market Oracle forecast was for growth of between 1% and 1.3%, which is starting to look optimistic.

The third leg of Britain's freefall is the Crash in the UK housing market as forecast to occur starting April 08 by the Market Oracle in November 2007. The original expectation was for a crash at the rate of 5% per quarter, this has now been exceeded with house prices falling by more than 6% per quarter.

Recent analysis suggests the UK housing markets pace of decline should moderate by Septembers data towards a year end projected rate of decline of 11% as the below graphs illustrate.

UK House Price Crash and Projected Trend into End 2008

UK House Price Crash and Projected Trend into End 2008

The annualised rate of economic growth fell from 2.3% to 1.6% for the second quarter, with now a strong risk of negative quarterly growth occurring this year. Therefore the economy is already teetering on the brink of an recession which implies that 2009 looks set to be far more painful than recent preliminary analysis suggested as the below graph illustrates.

Negative quarterly growth this year would be a seminal moment as the UK has not experienced a quarterly fall in GDP since 1992. Meanwhile the Bank of England is paralysed by the fear of inflation into inaction. The recent MPC minutes illustrated the paralysis in that the rate setting committee was split three ways, so we can expect little leadership from the Bank of England in the time of crisis. This only leaves fiscal policy as the means of saving the UK economy from a deep recession. However the price for which will be much higher inflation as the Government busts through its 40% Debt Golden rule , which recent analysis suggests that government debt could pass 60% of GDP during a 2009 recession.

UK GDP Growth Forecasts for 2008 made during later 2007.

  • Market Oracle 1% to 1.3% (Dec 07)
  • CBI 2% (Dec 07)
  • UK Treasury 2.15%, 2.5% for 2009 (Dec 07)
  • European Commission 2.2% for 2008 and 2.5% for 2009 (Dec 07)
  • Oxford Economics 2.3% (Dec 07)
  • OECD 2% (Dec 07)
  • International Monetary Fund 2.3% (Oct 07)
  • Capital Economics 2% (Dec 07)

Labour Vote Meltdown - Gordon Brown Leadership Challenge This Year

Gordon Browns Labour party is in crisis mode, time has effectively run out for Gordon Brown as the time for action to arrest the decline in Labour's electoral fortunes was more than 6 months ago, the same old offerings at press conferences no longer cuts it not only with the voters but also with Labour MP's who can clearly see that their jobs are now on the line. There now exists a high probability of a challenge to Gordon Browns premiership most probably at Septembers party conference. This also confirms the view that Labour will hang on for as long as possible into the deadline for a UK general election of May 2010.

However the voters have clearly indicated that 11 years in power is more than enough and that it is time for a change therefore a change in leadership is expected to make little difference to Labour's fortunes much as last years change from Tony Blair to Gordon Brown has just accelerated the degree to which Labour is seen as being out of touch with what the voters want, which is far greater competence in government spending on public sector services, a more equitable tax system and a Prime Minister with vision to lead Britain rather than to be led from one crisis to another.

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Clive Smith
31 Jul 08, 11:29
Housing decline to moderate?

"Recent analysis suggests the UK housing markets pace of decline should moderate by September’s data"

You did not explain your reasons for why you think the decline in UK housing value would moderate.

Mortgage lending has declined at an astonishing rate, consumer confidence is at its lowest point for decades and most first time buyers are out of the market, either due to fear or an inadequate deposit. Even if the government used taxpayer's money to try and kick start mortgage lending,

Too many people cannot afford their current commitments. As for the rest, stories in the news of a property crashes in the US, Ireland and Spain, must spell out what is in store for us. Sales are normally agreed weeks and months in advance, so there is a lag effect. In last months figures, what we see is sales that were completed then, but agreed to in say April or May. The housing reports in September, may be truly awful. For any other outcome would mean that people are rushing out this month and in June making offers on what they may see are bargains and mortgage leading increases dramatically.

Regards


Nadeem_Walayat
31 Jul 08, 15:11
House Prices

More here on prelimary analysis-

http://www.marketoracle.co.uk/Article5563.html

Which is on the basis of 20 years experience of trend analysis, that correctly called the exact peak in UK house prices as of August 07.

Look out for the analysis in the next few weeks that will map out house price trend into 2011.

NW.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules