http://www.bbc.co.uk/programmes/b068xnlw From 16th minute
The figures sound slightly contrary to the picture we are about to give. The pound has been weakening against the dollar and the euro because there were figures yesterday showing that in July output at UK factories fell at the sharpest pace for more than a year but the British Chamber of Commerce is nonetheless optimistic and has in fact upped its growth forecast for this and next year. John Longworth is the Director General of the BCC and he is with me now in the studio. John, what have you done to your forecasts, and why?
I have actually upped the forecasts for the next three years and that's because we think the fundamentals of growth are there. The service sector is booming, it's actually taking off very strongly and although we've seen those indicators you have mentioned that manufacturing's off the pace in the short term and that actually exports are doing very badly, that we've got currency value reduction, nonetheless the economy is fundamentally sound right now.
Is this a reflection of the fact that the manufacturing is now only 10% of the economy and in of itself is a bit of a worry?
Yes, it is and there are things we should be aware of even though we are saying the forecast is good. There are other fundamentals in the economy that we need to fix in order to make it robust and able to withstand all shocks so it is things we talk about quite a lot that government need to sort out: infrastructure - they are the only ones who can do it, we need to balance the economy towards exports to improve even further our current account balance that I predict will improve over some degree over the next three years. Those are the sort of things we need to do: we need to get access to finance fixed. Now if you do all those things then all boats will float and therefore the export situation will improve even though we haven't actually done anything to fix it, but we need to actually shall we say fix the roof while the sun shines, to coin a phrase, so when the external factors huff and puff it doesn't blow our house down.
What are these external factors though? We know there has been a lot of turbulence in the Stock Markets recently, concern about rates going up in the United States in spite of that economy or perhaps because that economy is performing well, worried about fall-of in demand from China, how does that affect the picture?
Well, it does affect the picture but of course we factored those things will not go wrong. [sic] Our forecast is dependent and contingent on external factors not turning bad and we have three big trading blocs in the world: we've got China and we've got the European Union and we've got the United States, and they all have fundamental issues. It was famously put that the global borrowing figures show that the world has borrowed a multiple of its output, so, who are we borrowing from? Is it Mars?
Let's talk about wages. We have a jobs rich recovery but wages have been slow to rise. Now, of course the government has imposed new guidelines you have to stick to so it is a rule of law really on wages. How does that affect companies, because I noticed that they are starting to say they will struggle to meet those demands. Do you buy that?
The vast majority of Chamber of Commerce business actually pay more than the Living Wage. It will be a problem for some sectors and some firms, particularly catering services, tourism, retail, those sorts of areas may have difficulties with the Living Wage. The government need to be aware of that, particularly small and medium-sized businesses. But in economic terms the Living Wage is a nil sum game because it is a squared circle. If people have more money, they spend more, the economy picks up, there is more tax revenue raised and it actually benefits the economy as a whole and you can see that what the government has done here is reward people for their austerity period and share in the gains that are coming along. [Not quite sure what he means by this.]
Interest rates. We know that a decision is going to emerge around noon and we'll have a stronger picture also of how the Policy Committee is thinking. A rise in interest rates surely would strengthen the pound and that's not good, is it, but on the other hand, it is not good to keep interest rates too low for too long.
We've said that the Bank of England should keep interest rates for as long as possible because it is the very thing that has fuelled our economic growth and our resilience during this period of recession. We recognise that interest rates will have to rise eventually but obviously there will be a bit of market turbulence and then we'll get over it.
Ceteris paribus was a Latin term that I remember from A level economics. It means all things being equal ie if interest rates stay the same - at zero - and there is no world financial meltdown and Mars does not send in the bailiffs for immediate payment from Earthlings of all we have borrowed from it which is a multiple of our income, then there will be growth in the British economy, otherwise there won't. In the meantime, WW3 is brewing and ISIS must be planning an invasion because EU member states have just demonstrated to the world what pathetic pushovers they are at repelling unarmed migrant swarms.
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After usury is abolished
Islamic prophecy that Muslims will enter an alliance with Russia to defeat NATO and Israel after WW3 http://www.imranhosein.org/articles/islam-and-politics/408-urgent-statement.html The date of this prophecy was 28 June 2012.
Graham Martin on 14 September 2015 at 17:12
One good point was made on todays show , What is the USA doing to stop the fighting in Syria. I can tell you. They are suppling arms and munitions to Turkey in exchange that Turkey allows them to use their airbases. Turkey then arms ISIS with the arms and munitions from the US. The US should pull all their armed forces out of Turkey.