Friday 22 July 2016

Caution required from latest PMI survey

The latest PMI survey of the UK economy clocked a figure consistent with recession. Many commentators are now indeed predicting an imminent downturn, with Q3 GDP set to fall they say.

I would urge great caution. This survey has regularly given false readings of recessions in the past because of the way it is compiled. We need also to see if this is not just reflecting some kind of kneejerk panic as we initially saw reflected in the financial markets. Moreover the Bank of England survey of agents report was much more sanguine. We do really need to see concrete data before making any conclusions.

Finally, the reading suggests nothing like that seen in 2009 after the global financing crisis.

10 comments:

  1. If we keep talking down the economy then yes it will fail. Trouble is we had the scare years under the Blair regime followed by a lacklustre coalition and a mindless rule after.
    We need innovation, vision and risk takers to take over.

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    Replies
    1. Agreed Rick. It can all be self fulfilling.

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    2. Agreed Rick. It can all be self fulfilling.

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    3. Agreed Rick. It can all be self fulfilling.

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    4. Agreed Rick. It can all be self fulfilling.

      Delete
  2. If we keep talking down the economy then yes it will fail. Trouble is we had the scare years under the Blair regime followed by a lacklustre coalition and a mindless rule after.
    We need innovation, vision and risk takers to take over.

    ReplyDelete
  3. comparing now with 2009 is a bit false. The UK has given a unique shock to the world economic system; more profound than incompetent and unregulated bankers. And with regard to risk takers we've got Tata going into a joint deal with the Germans and the Japanese has just bought one of our most innovative non military technology companies.

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  4. comparing now with 2009 is a bit false. The UK has given a unique shock to the world economic system; more profound than incompetent and unregulated bankers. And with regard to risk takers we've got Tata going into a joint deal with the Germans and the Japanese has just bought one of our most innovative non military technology companies.

    ReplyDelete
  5. Not sure what you mean. Valid to make comparisons. And don't agree about it being more profound. Can be a positive development. Can't see relevance of what you call risk takers. The Japanese buying ARM is not bad. This is capitalism working successfully for the UK. There is rarely a good reason for protectionism. People working for ARM will go and create another tech company etc etc.

    ReplyDelete
  6. Not sure what you mean. Valid to make comparisons. And don't agree about it being more profound. Can be a positive development. Can't see relevance of what you call risk takers. The Japanese buying ARM is not bad. This is capitalism working successfully for the UK. There is rarely a good reason for protectionism. People working for ARM will go and create another tech company etc etc.

    ReplyDelete