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David Smith

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David Smith

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    1. David Smith The Sunday Times

    2. After the upheaval Prospects in an age of instability

    3. The biggest financial storm in a century

    4. Time heals – a long time since 2008

    5. But the worst post-1945 world recession

    6. After the long UK upturn

    7. A very nasty UK recession

    8. Shrinking banking capacity

    9. A guided missile aimed at housing

    10. A slump in transactions

    11. Very weak house-building

    12. A supply problem Department of Communities and Local Government: “There is a large gap between the supply of, and demand for, new homes. “For decades, the housing market hasn't kept up with the needs of our growing population so there aren't enough homes being built. We are committed to meet Britain's housing need by increasing housing supply and providing more homes that people want in the places where they want them.” How?

    13. House price fall was arrested

    14. But may be resuming

    15. Plenty of social housing need (1)

    16. Plenty of social housing need (2)

    17. Braced for very big cuts

    18. Feast to famine on spending

    19. The biggest UK fiscal tightening in decades Ł40.2 billion of spending cuts and tax hikes by 2014-15, on top of Labour’s Ł73 billion plans. Split will be 77%-23% - Ł32 billion on spending (including Ł11 billion of welfare cuts), Ł8.2 billion in extra taxes, including 20% VAT. Others things being equal, a 25% real reduction in non-ringfenced departmental spending.

    20. To close a very large gap

    21. Pain unevenly spread

    22. Capital bears the brunt (Ł bn.)

    23. Plenty of critics waiting in the wings ‘We are now, I fear, in the early stages of a third depression.’ – Paul Krugman. ‘There is an idea somehow that when the government cuts back, the private sector will get confidence and that will lead to more spending. The fact is that the households in America and many other places around the world are burdened by debt.’ – Joseph Stiglitz. ‘Slasher Osborne's rash budget will result in at least 500,000 public sector jobs and between 600,000 and 700,000 jobs in the private sector being lost by the end of this parliament.’ - David Blanchflower.

    24. Will it work?

    25. Only if the economy grows like this

    26. Still a very long fiscal hangover

    27. Conclusions Global economy recovering from the biggest shock in decades – depression averted. The UK is picking up, despite banking & fiscal indigestion. Public spending being cut hard, and unevenly. Capital spending particularly severely hit. Housing – public and private – faces a long, post-crisis struggle.

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