Magazine article Marketing

Ready for Economic Recovery

Magazine article Marketing

Ready for Economic Recovery

Article excerpt

Ready for economic recovery

Economic prospects are unusually difficult to read at present. Contradictory statistics on the current position of the economy emerge at regular intervals. Retail sales are slowing down. Paradoxically, this is good news. Lower spending in the shops should mean fewer imports into the country, a better balance of payments, and so improve the prospects for reductions in interest rates. But almost at the same time the actual balance of payments figures appear, showing Britain still in the red. The credit boom seems to be over on one set of statistics, while an alternative measure of credit expansion suggests that it is still out of control.

A slow-down in the economy has been inevitable for some time. The boom of the late 80s was completely unsustainable. Between the end of 1987 and the end of 1989, in just two years, borrowing by individuals rose by 100bn [pounds], or some 2000 [pounds] for every person in the country. This is a vast amount -- more than the total cost of public services in a year. And it all went into personal spending. Little wonder that consumer markets boomed. And no surprise that British industry could not supply enough to meet the surge in demand. Imports soared, the balance of payments went into massive deficit, and interest rates had to rise rapidly to their record levels.

Growth was certain to be either very slow or non-existent in the first half of this year. The fact that the recovery is barely discernible should not be a surprise. …

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