Falling Savings Ratio indicates turbulence ahead

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Falling Savings Ratio indicates turbulence ahead

Postby Boro Boy » Tue Jul 17, 2018 10:21 pm

Let’s first look at Capital Economics’ central forecasts for the UK economy: bear in mind that these are based on a sensible outcome for our trading relationship with the European Union post Brexit: at least there’s a coherent proposal on the table following the Cabinet 'accord' at Chequers. Although the resignation of David Davis and Steve Baker has clearly put that under strain. So they do not encompass either BRINO (Brexit In Name Only) or ‘No Deal’ (Unilateral Declaration of Free Trade), but of course both remain possible. I suspect, however, that the Cabinet accord leaves little room for EU push-back as Mr Barnier will be in little doubt how the £39bn will be used in the event of a ‘No Deal’.

(See attached Key Forecast)
Key Forcast.jpg
UK Key Forecast
Key Forcast.jpg (73.97 KiB) Viewed 1531 times


The first thing to notice is that interest rates are expected to rise to 1% by the end of 2018, and further in 2019. This is not just a reaction to higher domestic inflation, but also a recognition that the Bank of England can’t ignore rising rates in the United States.

No doubt reflecting this, and that £Sterling has fallen very considerably over the past two years, exchange rates are expected to remain quite stable. However Capital Economics see some weakness in equity markets in 2019.


NB: Extract from The Share Centre financial report - July 2018.
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Re: Falling Savings Ratio indicates turbulence ahead

Postby Chadwick » Wed Jul 18, 2018 7:48 am

I'm not an economist, so could someone tell me if I've understood this correctly. IS it saying that, in the event of a "sensible" middle ground agreement on our post-Brexit relationship with the EU, this think tank predicts:

Living costs ('household spending') will increase.
Unemployment will increase.
Inflation will go down.
Interest rates will increase.
The FTSE will drop in value.
£1 will buy more dollars, but fewer euros
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Re: Falling Savings Ratio indicates turbulence ahead

Postby Boro Boy » Wed Jul 18, 2018 8:24 am

Well, you don't need to be an economist to read a chart... but you do need to understand it is only a prediction in an inaccurate world.

I thought a chart would help understanding and give a visual representation... :thumbup:
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Re: Falling Savings Ratio indicates turbulence ahead

Postby expressman33 » Wed Jul 18, 2018 9:23 am

I think the £ rates at the end of 2018 are optimistic ,and the 2018 closing FTSE pessimistic

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Re: Falling Savings Ratio indicates turbulence ahead

Postby blythburgh » Wed Jul 18, 2018 10:18 am

I have an "A" level in economics but do not expect me to explain it to you :lol:
Keep smiling because the light at the end of someone's tunnel may be you, Ron Cheneler
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Re: Falling Savings Ratio indicates turbulence ahead

Postby Sarah » Wed Jul 18, 2018 1:16 pm

Turbulence ahead, yes for sure. This extract says very little about the savings ratio though, which has been on a downward trend for 50 years anyway, so don't expect it to tell you very much about what's likely to happen in the next 6, 18 or even 30 months...

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Re: Falling Savings Ratio indicates turbulence ahead

Postby Chadwick » Wed Jul 18, 2018 2:34 pm

Did they provide a forecast for any other scenario, eg BRINO or No Deal?
That would help give these figures some meaning.

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Re: Falling Savings Ratio indicates turbulence ahead

Postby kevinchess1 » Thu Jul 19, 2018 8:23 pm

You be better off asking Mystic Meg
Countries, Banks evn big companies employ an awful lot of 'Bright young things' to make predictions about the future
When there wrong they say 'Who could of foreseen 9/11, the tsunami Economic collapse around the world or Sunderland FC double relegation
The problem is they are dealing with the unknown IE the future, and I've never met anyone who knows it
Still doesn't stop these people getting 6 figure salaries and 5 figure bonus for taking guess
Even the IMF which make sa lot of preditivins update (Changes) them every other week
Save your money and read your horoscope, would be a lot cheaper and probably just as accurate
Politically incorrect since 69

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Re: Falling Savings Ratio indicates turbulence ahead

Postby Boro Boy » Thu Jul 19, 2018 9:11 pm

kevinchess1 wrote:You be better off asking Mystic Meg
Countries, Banks evn big companies employ an awful lot of 'Bright young things' to make predictions about the future
When there wrong they say 'Who could of foreseen 9/11, the tsunami Economic collapse around the world or Sunderland FC double relegation
The problem is they are dealing with the unknown IE the future, and I've never met anyone who knows it
Still doesn't stop these people getting 6 figure salaries and 5 figure bonus for taking guess
Even the IMF which make sa lot of preditivins update (Changes) them every other week
Save your money and read your horoscope, would be a lot cheaper and probably just as accurate



I guess the important question is can Sunderland FC make it three successive seasons of relegation...??? :wave:

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