FIVE YEARS ON. Deeper and longer lasting than any other recession in UK history. Depression. Recovered at 48 weeks – four years. 1990s – recovered after 32 months – about 2.5 years.
Amount of consolidation to get net debt down to 60% of GDP by 2030
Just over a third of the Government’s planned consolidationhas taken place so far.plans, most of the tax increases have taken place, whereasmost of the spending cuts are yet to come.
Spending cuts are getting more difficult
QE: The Biggest Experiment in modern economic history
Cost: £185bn – less than half its total QE outlay. Of course, that would create a slight problem, in that, well, no-one would be able to get anywhere, so the Bank could use the remaining £190bn to buy every single household in Britain a brand spanking new Volkswagen Fox. Which, of course, would also bolster UK-German relations, so good news all round.
According to Savills, the entire housing stock in Scotland is currently worth just over £300bn – so easily affordable. And, while we’re at it, it could use that remaining £75bn to buy up every property in Northern Ireland.If, for understandable reasons, Sir Mervyn was rather nervous about the constitutional implications of the Bank of England owning Scotland, he could, instead, buy up every property in the North West (£372bn), the North East (£124bn) or the West Midlands (£309bn), including Wolverhampton, where he grew up. London would be a bit too expensive, at £783bn, but the Bank could easily afford a few of the smartest boroughs: Kensington & Chelsea and the City of Westminster, perhaps (£128bn all-in).
The Bank could, if it so chose, decide to get the money minted up into £375bn of pennies. I’m not entirely clear why they’d want to do this, but nonetheless it would be so many coins that, if piled on top of each other, they would tower 57m kilometres high, enough to reach to Mars, on one of its closer orbits to the earth.
3So real incomes are fallingSource: Office for National Statistics. Median hourly earnings excludingovertime for all employees10.0010.5011.0011.5012.0012.502002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012£ per hour
91. A third of the gilts market0100,000200,000300,000400,000500,000600,000700,000800,000900,0002011…2011…2011…2011…2012…2012…2012…HouseholdsPrivate Non-FinancialcompaniesBank of EnglandOther FinancialInstitutionsInsuranceCompanies andPension fundsSource: Debt Management Office
102. Every single automobile in Britain (cost: £185bn)
19No euro rebalancing (I)Unit labour costsSource: OECD90.0095.00100.00105.00110.00115.00120.00125.00130.00135.00140.002000-01-012000-05-012000-09-012001-01-012001-05-012001-09-012002-01-012002-05-012002-09-012003-01-012003-05-012003-09-012004-01-012004-05-012004-09-012005-01-012005-05-012005-09-012006-01-012006-05-012006-09-012007-01-012007-05-012007-09-012008-01-012008-05-012008-09-012009-01-012009-05-012009-09-012010-01-012010-05-012010-09-012011-01-01GermanyIrelandSpainFranceGreece
20No euro rebalancing (II)Beer pricesSource: Eurostat90.0100.0110.0120.0130.0140.0150.0160.02000-01-012000-06-012000-11-012001-04-012001-09-012002-02-012002-07-012002-12-012003-05-012003-10-012004-03-012004-08-012005-01-012005-06-012005-11-012006-04-012006-09-012007-02-012007-07-012007-12-012008-05-012008-10-012009-03-012009-08-012010-01-012010-06-012010-11-012011-04-012011-09-012012-02-012012-07-012012-12-01GermanyIrelandSpainFranceGreece