Why is the UK economy failing?
Do not heed those who paint with a limited palette and speak only of fiscal austerity. Via Scott Sumner, Britmouse has one report:
The Office for National Statistics’ current data on quarterly UK nominal GDP growth in 2008 is as follows, at Seasonally Adjusted Annual Rates:
- Quarter 1: 4.3%
- Quarter 2: -1.7%
- Quarter 3: -5.2%
- Quarter 4: -3.4%
That collapse in nominal spending has no precedent in the data, and is certainly worse than anything since the 1930s. . . .
There was by the way no liquidity trap, as rates were often at five percent and in general not close to zero. Britmouse now has his (her? its?) own blog.
Going back in time a bit further:
The stark generational rift emerging in Britain is highlighted by a Financial Times analysis showing that the real disposable household incomes of people in their 20s have stagnated over the past 10 years just as older households are capturing a much greater share of the nation’s income and wealth.
…The FT analysis of 50 years of official data also shows that the living standards of Britons in their 20s have been overtaken by those of their 60-something grandparents for the first time, with the household incomes of pensioners in their 70s and even 80s also catching up rapidly.
The data, which underpins government publications on living standards, takes no account of housing costs or wealth. Had it done so the results would have been even more dramatic, showing median living standards of people in their 20s have now slipped below those of people in their 70s and 80s.
The problems over there are deeply rooted.
Nonetheless, via David Harbottle, we learn that during the Olympics there is a home in London for rent for about $412,646 per month. So far there appear to be no takers. The price is listed as negotiable.