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Is the economy getting better?

It seems as though, well from an outsiders’ point of view, that everything is looking great in the world of finance and the economy in the UK, however, I really don’t think it is all that it seems.

Whilst there were only a few individuals who foresaw the financial crisis erupting into what it was, there were a number of individuals (including myself) who were warning that the changes in prices and buying rates, as well as the ‘covered up’ problems with subprime mortgages, was a problem that was waiting to happen.  Although, I believe no one could have predicted the outcome of what happened.

 

Now, a few years on, the banks are once again making significant profits (over £1billion pounds, i.e. 1,000 million pounds) in profits over a six month period.  This shows that the banks and other financial institutions are, at best, reaping the rewards after they had been bailed out from the tax payer.  And, should there be anyone who says ‘ah…. but some banks weren’t bailed out’ then I would be hot on their tail and inform them of the hundreds of billions of pounds/dollars that were injected into the money markets across the world to help boost the acceptability of banks lending to one another and also to other individuals and businesses.

 

After visiting a few forums, where they were discussing ‘are you secretly poor’, my current understanding of how the country’s economy is going was backed up.  I read that there were a number of people who: lived in quite affluent areas, drove expensive 4x4s, and their children had all that they wanted, but they were secretly poor; they were living from week to week, feeding their children but could only afford to live n bread and water.  Some had mortgages to the max on their houses, a loan, and a number of different credit cards.

 

These people are living a lie and to think there isn’t a number of them on your street would be foolish; there are many households either scrapping by to pay their mortgages or still living beyond their means.  I have been (and still am) in debt with unsecured credit, and I have learnt the hard way, but it is time that people stop and think what is going to happen in the future?  If people believe that they aren’t going to be hit by the cut backs in government spending then they are wrong; if you believe that the rise in VAT really isn’t going to make much difference, then you’d be wrong; if you think that spending the extra money from your reduced mortgage payments is a good idea (or paying them to reduce your mortgage) then that is probably a bad idea – what if you are made redundant in a few months?  Wouldn’t that extra cash have been useful?

 

Also, I don’t think the number of job redundancies (never know why they are called losses; they’ve been taken away, no one has put them somewhere and forgot where that was) will increase as we go forward into 2011.  And, I believe the only people who are going to profit are the financial institutions who are lending money to people at ever increasing rates – I know I’ve seen many different credit card companies increase their APR rates substantially and many of the low offers have been withdrawn for some time now.

 

For one, I think that if you are think that we are all ‘out of the woods’ and what the future holds is nice and rosy then I believe you are mistaken.  I will be looking at the next 12 to 18 months with a dubious gaze and allowing for the time to come when things might see a double-dip recession.

About Nick

Well hello there! I'm Nick and I write a little here on my blog.
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