11 ms·

The craziest thing is that this recession was mostly self inflicted.

HL33tibCe7 4y ago
That’s unfortunately not true (it would be nice if it was, because that would imply that fixing it would be easier than it actually is). The idiotic decisions of the government did play a minor role, but the UK economy was already on the road to ruin before that happened.
- bluepizza 4y ago
  I think OP means all of the idiotic decisions, from Brexit to all of the delusional politics that have achieved no actual economical advantages to the UK ever since.
  - HL33tibCe7 4y ago
    Yes, I think those have contributed, but I think they play a minor role compared with some fundamental problems with both the global economy (Ukraine, most obviously) and the UK economy (low productivity).
    - bluepizza 4y ago
      You are correct. But it's not unfair to expect that one of the richest and most developed countries in the world would find ways around those issues.
    - oxfordmale 4y ago
      The whole world is going through a down turn, however, the UK will likely impacted harder and longer. We gave up a trade deal with a very large trading block, the EU, and haven't been able to make up for this by having trade deals with the USA, China or India so far. The few wins, trade deals with New Zealand and Australia, are mostly symbolic as the impact on the GDP is expected to be small. A trade deal with China looks unlikely given the current political climate. Trade deals with both the USA and India are fraught with political risk. The USA wants to be able to export GM food to the UK, out pricing UK farmers that were reliant on EU subsidies until recently. India is after a deal on immigration and this is even more contentious. Trade deals will eventually be signed, however, almost certainly won't help to shorten or lessen the impact of the current recession.
    - kcartlidge 4y ago
      > the UK economy (low productivity) (Not directing this at you, as I have no knowledge of what you consider low productivity to mean.) What is often missed in the talk of low productivity is that the general assumption on hearing the phrase is that the problem is a lazy and unproductive workforce, which leads to the workers being an obvious target of blame. In economics terms MFP is the more important view of productivity, and it's the amount of output that can be generated for a given set of inputs including not just labour but also capital/investment. And in general terms the largest issue here is not lazy workers but extractive management and asset-owners who take out the profits (as dividends, salaries, share buy-backs, etc) rather than reinvest them in the companies and the infrastructure. Without that investment the organisation remains below par for productivity as the inputs remain stagnant. And that understanding shifts both the blame (and the required direction of travel to tackle the issue) to where it should be focused. Not pay, workers rights, etc, but addressing the inequality that allows that extraction which is the real cause of the productivity gap.
- substation13 4y ago
  > that would imply that fixing it would be easier than it actually is I assume the self-inflicted part is leaving the common market / customs union... and rejoining this is not easy at all. I think it might be politically impossible for at least 10 years.
  - lotsofpulp 4y ago
    I wonder if EU would let UK join without adopting the Euro. The UK seems to have lost a lot of its negotiating power that let them keep the GBP the first time.
    - kcartlidge 4y ago
      > I wonder if EU would let UK join without adopting the Euro. The UK seems to have lost a lot of its negotiating power that let them keep the GBP the first time. If the UK rejoined (assuming it was welcome after the last few years) I find myself wondering if forcing us (I'm British) to go all the way - into the Euro and onwards to full participation in everything - might actually be a good idea. There are some aspects which taken in isolation may not be that great an idea (eg a Euro which includes such a variety of economies), but contrast that with the last approx half century where we've been the wall-fly. The one who goes to the dance, but hangs around the edges and never really joins in. Half-hearted commitment can often be worse than none at all, and being forced to commit fully in order to be able to rejoin may well be the making of a better UK that takes it seriously and helps drive things forward. Possibly.
      - substation13 4y ago
        What the UK had before was pretty much "EU membership the good parts" - and (a slim majority of) the public rejected that. Is full membership really possible?
        gort19 4y ago
        That was a slim majority of who voted at the time. Leave voters heavily skewed older. Even just taking out the people who have died since the vote would result in a remain vote. 15 years worth of younger voters would overwhelmingly vote for remain. Unless they change their minds in the meantime.
- marvindanig 4y ago
  Apparently the evangelical jehadis and MAGAts are likely gonna succeed towards a similar outcome here in the US. These people forget how much better western economies were before BREXIT and MAGA nuisance took over.
- frereubu 4y ago
  The way I look at it, there are many issues facing many economies at the moment. What Brexit did was remove any contingency that might have been available to ride out the storm.
mywittyname 4y ago
World: If you jump off the cliff, it's going to hurt really badly. England: Nah, everything will be so much better at that bottom of this cliff. World: But that's a really high cliff, and you're talking about jumping off of it. England: YOLOooooOOOOooo Also England: These broken legs really hurt. I probably won't be able to walk for a while. World: <Jackie Chan face>
- pojzon 4y ago
  Thank you for explaining it for younger audience, but I dont think many of them visit hackernews.
  - bee_rider 4y ago
    The YOLO crowd have to be in their mid to late 20's at least, now, right? That seems like prime HN demographics.
    - OrderlyTiamat 4y ago
      What are the hn demographics? Is there a regular survey or anything? Would people be interested in a survey?
      - kergonath 4y ago
        That would actually be very interesting. There’s a bunch of young idealists, but also a bunch of old geezers, and I assume everything in between.
      - reducesuffering 4y ago
        You can roughly tell by the prevalence of Twitter compared to Snap/IG/Facebook. 30s is definitely highest proportion, not 20s by a longshot.
  - sph 4y ago
    The younger ones are not the one that need an explanation, as the distribution of votes in favour of Brexit was strongly correlated with older age. Brexit reinforces my very controversial belief that pensioners should not be able to vote. The future is not theirs. Elderly wisdom is a terrible cultural meme. People grow wiser as they age, but are not wiser in the absolute. Also, a young mind ingests many orders of magnitude more information about the world than a person with declining mental faculties and ossified beliefs. /rant
cm2187 4y ago
Not just self-inflicted, self-inflicted by the BoE, in the process of fighting the inflation the BoE itself created by printing money irresponsibly, in response to moronic lockdown policies.
mahkeiro 4y ago
Yeah when they were talking about all the red tape that will be gone and then introducing the ukca marking to replace the ce marking… (facepalm) The annoying British exceptionalism is for once coming to bite hard.
- rwmj 4y ago
  No one who does a days work in Britain thinks any of this is a good thing. It's largely generated by a far right party through a voting system that allows pensioners (a minority) to control who gets into power.
  - rjsw 4y ago
    Not sure that is completely true. People working in construction or hospitality are probably happy for now that there are fewer people competing with them for jobs.
    - TheOtherHobbes 4y ago
      Even if that were true - and it isn't - countless export-oriented businesses have been shutting down because it is now insanely bureaucratic and uneconomically expensive to trade with a bloc that is just over 20 miles away. The lies told to get Brexit over the line normalised a period of exceptionalist reality-denying insanity which has spilled over into Covid policy, economic policy, climate policy, health policy, energy policy, immigration policy [1], transport and logistics, media credibility, and political stability. It is - without any exaggeration at all - an absolute shit show. No one earning less than a few million a year has benefited in any lasting or significant way. Certainly not big-picture economically. [1] Pandemic aside, Brexit has had no impact on immigration numbers. https://migrationobservatory.ox.ac.uk/resources/briefings/long-term-international-migration-flows-to-and-from-the-uk/ https://migrationobservatory.ox.ac.uk/resources/briefings/lo...
    - kergonath 4y ago
      There has been a labour shortage for years now in these sectors. It hasn’t helped their situation and both pubs and shops keep closing. These people have few reasons to be happy.
hanoz 4y ago
> mostly self inflicted ...by the Bank of England stoking a multi decade house price bubble.
brookst 4y ago
And since recessions are partly a product of mass psychology, announcing that this will be the worstest recession ever makes it more likely to be the worstest recession ever. Even now they can't stop punching themselves in the face.
- JohnJamesRambo 4y ago
  Did they punch themselves in the face or was it Cambridge Analytica type meddling from groups with a vested interest in Brexit happening stomping them in the face with a boot? From my brief reading about the matter it seems that the same villains showed up over there for that manipulation campaign.
  - jfengel 4y ago
    Mostly column A, a little column B. There's also a big chunk of column C: the leading opposition party did a terrible job of opposing it. There was a chunk of the Labour party, including its leader, who also favor Brexit, albeit a very different kind of Brexit from the Tories. For them, it's more about anti-globalism and anti-corporate-control. That leader eventually resigned, but by that point the damage was done. I can't predict what would have happened if the Labour party had chosen to unify on a pro-Europe platform, but they were soundly defeated. The Tory party won resoundingly, and they had run on a pro-Brexit platform. There is always skullduggery, but it's really just something the UK did to itself.
    - DonaldFisk 4y ago
      This is not true. There were a small number Labour MPs who wanted to leave, including Gisela Stuart, Kate Hoey, and Graham Stringer, but by the time of the referendum, Jeremy Corbyn had long changed his mind, accepted we should remain in the EU, and campaigned for that: https://www.theguardian.com/politics/2016/jun/22/corbyn-final-pitch-referendum-voters https://www.theguardian.com/politics/2016/jun/22/corbyn-fina...
      - jfengel 4y ago
tick_tock_tick 4y ago
> mostly self inflicted So self inflicted that all the world is heading in the same direction? The EU and USA are suffering from pretty much the same issues.
cliftonk 4y ago
the ironic thing is that the US did tons of direct check-type helicopter money and yet our growth is healthier and more robust than anyone else in the world (and the dollar has also outperformed). given other countries did not undergo similar fiscal programs and have faced similar levels of inflation, i would argue that the larger component of inflation was the sudden global start-stop supply-chain shock from the pandemic rather than purely excess demand from the too-large fiscal programs. and i do not consider that shock to be self-inflicted (tho the excessive fiscal spending certainly was).
- czbond 4y ago
  You're confusing having THE reserve currency (for now) with having a healthy & robust economic economy or program. U.S. debt situation is just the least ugly of all the ugly. You have to pick something, so for now, the $USD is it.
systemvoltage 4y ago
Yea I was commenting here on HN in late 2020 about possible inflation because of all this money printing. Was repeatedly flagged for speaking up. You guys don't remember, 2020 was an utter shitshow in terms of ability to disagree with the mob. We are better now but it was quite telling.
- vkou 4y ago
  > Was repeatedly flagged for speaking up You weren't downvoted for saying that money printing -> inflation[1], everyone with a basic grasp of arithmetic can understand this. You were probably downvoted for thinking that letting the economy completely implode was preferable to inflation. Or, alternatively, that piling a few million bodies onto the altar of economic growth[2] in a pre-vaccine world was a good idea. [1] Also, there's a difference between Wall St. inflation and Main St. inflation, and the latter is as much caused by the war and supply chain disruptions as it is by the printing press. [2] Growth which wouldn't have even materialized, because everyone with an ounce of self-preservation dramatically changed their spending and travel habits.
  - systemvoltage 4y ago
    No, I am not presenting the full arguments here so don't go after what I just put here. Similar comments were upvoted later this year. Reminds me of the pandemic 180 degree turns we made with respect to origins. At first, it was unacceptable to discuss lab leak theory. After Lancet post, it was then suddently acceptable. But, now it is uncool again. The mob is absolutely ruthless and disgraceful. We need a north star to follow that's based on reason and logic, not what others are thinking.
    - andybak 4y ago
      I've followed HN through the pandemic and I found it pretty balanced on the lab leak theory. I've personally always been open to the idea and I've not noticed a huge wave of "mob" behaviour either way.
mytailorisrich 4y ago
The main self-inflicted cause here is the energy crisis, which is by and large a result of bad policy recently and over the past decades. The second self-inflicted cause is public spending during Covid, bearing in mind that the UK has always been more exposed because it is not 'shielded' behind the euro. If you are thinking of Brexit, I don't think it is a major cause although it obviously does not help.
- w14 4y ago
  Indeed - it was set up long before Ukraine or Liz Truss. But aside from bad long term energy policy, the incompetence of Andrew Bailey can't be ignored in my view. In July 2021, Andrew Bailey said "Our forecast at the moment is that we do expect inflation to pick up in the next month or so really ... At the moment we don’t see that evidence [of long term inflation] but we will watch it, of course we must do, very carefully." So he took no action. By October 2021 his colleague Hugh Pill said "The magnitude and duration of the UK's inflation spike is proving greater than expected …" And yet they continued to do nothing. They continued to claim inflation would rise to a few percent and then drop back. It may be reasonable to say that they couldn't foresee Ukraine, but the inflationary pressure was already there, as you say partly because of Covid bailout money printing, but also from the supply side because of China's zero Covid policy, which was already recognised by many, but not by the Bank of England apparently, as being a fairly major contributor of inflationary pressure [1]. [1] - https://www.asiapacific.ca/publication/china-has-hit-inflection-point-its-zero-covid-policies https://www.asiapacific.ca/publication/china-has-hit-inflect...
ericd 4y ago
Yes, it’s self inflicted, but not due to recent events any more than a recession is the fault of whoever the sitting president is. There are deep, long-standing structural reasons for the stuff we find ourselves in, and the cycle is as old as civilization, because it’s just human nature. The politicians who advocate for austerity and fiscal discipline don’t tend to do as well as those who let the credit run like water.
- kichimi 4y ago
  The UK has been under austerity since 2008.
- kayamon 4y ago
  Why make the right choice when you can simply make the popular choice and then print more money to paper over the cost?
munk-a 4y ago
The other craziest thing is that the Bank of England isn't just saying "We'll have a recession" but they're specifically selling it as the longest recession ever. If you ever want to have the longest recession ever a great first step is for your central bank to say "Hey - this one is going to be a lot worse than most of them". One of the responsibilities of central banks (which the Fed has taken quite seriously) is to carefully control messaging - if you're overly optimistic when things are clearly bad you'll cause a loss of faith and it'll make things worse... but there's also never a reason to go above and beyond expectations in how bad you think things will be because that causes people to batten down even more hatches and prolong the recession. Markets are weird and they're essentially gigantic tabloids - the image of what's going on counts much more than tangible things like a shortage of widgets.
- yakak 4y ago
  The US is still entirely driven by its own consumers and the way its behavior reflects off the international economy, driving all that voodoo noise, but the UK? I think they should kill zombie businesses quicker (yay, interest rates!) and try to pick up as many international worker positions from companies least likely to be zombies. Their downward slope locally is pretty inevitable but puts them in a good position like a weak currency for exports. Giving up on a shoot the moon strategy that has gone this far usually means shooting yourself.
- c7b 4y ago
  > One of the responsibilities of central banks is to carefully control messaging That might be exactly what they're doing. The article says that their forward guidance for interest rate hikes is substantially below market expectations. Maybe they are hoping that a bit of gloomy talking will do some the work of slowing down price dynamics, reducing the need for them to take more drastic measures.
  - smingo 4y ago
    Philosophers may consider this a "performative utterance".
thedrbrian 4y ago
we had to save the people from a 99.98% survivable virus..........
za3faran 4y ago
Add to that that it feels like some people want this to happen. It's a cycle. Media wants more clicks, they cover and exaggerate every small layoff, even though in other times no one would have said anything, people panic, managers and CEOs panic, more layoffs, snowball effect.

That’s unfortunately not true (it would be nice if it was, because that would imply that fixing it would be easier than it actually is). The idiotic decisions of the government did play a minor role, but the UK economy was already on the road to ruin before that happened.

bluepizza 4y ago
I think OP means all of the idiotic decisions, from Brexit to all of the delusional politics that have achieved no actual economical advantages to the UK ever since.
- HL33tibCe7 4y ago
  Yes, I think those have contributed, but I think they play a minor role compared with some fundamental problems with both the global economy (Ukraine, most obviously) and the UK economy (low productivity).
  - bluepizza 4y ago
    You are correct. But it's not unfair to expect that one of the richest and most developed countries in the world would find ways around those issues.
  - oxfordmale 4y ago
    The whole world is going through a down turn, however, the UK will likely impacted harder and longer. We gave up a trade deal with a very large trading block, the EU, and haven't been able to make up for this by having trade deals with the USA, China or India so far. The few wins, trade deals with New Zealand and Australia, are mostly symbolic as the impact on the GDP is expected to be small. A trade deal with China looks unlikely given the current political climate. Trade deals with both the USA and India are fraught with political risk. The USA wants to be able to export GM food to the UK, out pricing UK farmers that were reliant on EU subsidies until recently. India is after a deal on immigration and this is even more contentious. Trade deals will eventually be signed, however, almost certainly won't help to shorten or lessen the impact of the current recession.
  - kcartlidge 4y ago
    > the UK economy (low productivity) (Not directing this at you, as I have no knowledge of what you consider low productivity to mean.) What is often missed in the talk of low productivity is that the general assumption on hearing the phrase is that the problem is a lazy and unproductive workforce, which leads to the workers being an obvious target of blame. In economics terms MFP is the more important view of productivity, and it's the amount of output that can be generated for a given set of inputs including not just labour but also capital/investment. And in general terms the largest issue here is not lazy workers but extractive management and asset-owners who take out the profits (as dividends, salaries, share buy-backs, etc) rather than reinvest them in the companies and the infrastructure. Without that investment the organisation remains below par for productivity as the inputs remain stagnant. And that understanding shifts both the blame (and the required direction of travel to tackle the issue) to where it should be focused. Not pay, workers rights, etc, but addressing the inequality that allows that extraction which is the real cause of the productivity gap.
substation13 4y ago
> that would imply that fixing it would be easier than it actually is I assume the self-inflicted part is leaving the common market / customs union... and rejoining this is not easy at all. I think it might be politically impossible for at least 10 years.
- lotsofpulp 4y ago
  I wonder if EU would let UK join without adopting the Euro. The UK seems to have lost a lot of its negotiating power that let them keep the GBP the first time.
  - kcartlidge 4y ago
    > I wonder if EU would let UK join without adopting the Euro. The UK seems to have lost a lot of its negotiating power that let them keep the GBP the first time. If the UK rejoined (assuming it was welcome after the last few years) I find myself wondering if forcing us (I'm British) to go all the way - into the Euro and onwards to full participation in everything - might actually be a good idea. There are some aspects which taken in isolation may not be that great an idea (eg a Euro which includes such a variety of economies), but contrast that with the last approx half century where we've been the wall-fly. The one who goes to the dance, but hangs around the edges and never really joins in. Half-hearted commitment can often be worse than none at all, and being forced to commit fully in order to be able to rejoin may well be the making of a better UK that takes it seriously and helps drive things forward. Possibly.
    - substation13 4y ago
      What the UK had before was pretty much "EU membership the good parts" - and (a slim majority of) the public rejected that. Is full membership really possible?
      - gort19 4y ago
        That was a slim majority of who voted at the time. Leave voters heavily skewed older. Even just taking out the people who have died since the vote would result in a remain vote. 15 years worth of younger voters would overwhelmingly vote for remain. Unless they change their minds in the meantime.
marvindanig 4y ago
Apparently the evangelical jehadis and MAGAts are likely gonna succeed towards a similar outcome here in the US. These people forget how much better western economies were before BREXIT and MAGA nuisance took over.
frereubu 4y ago
The way I look at it, there are many issues facing many economies at the moment. What Brexit did was remove any contingency that might have been available to ride out the storm.

mywittyname 4y ago

World: If you jump off the cliff, it's going to hurt really badly. England: Nah, everything will be so much better at that bottom of this cliff. World: But that's a really high cliff, and you're talking about jumping off of it. England: YOLOooooOOOOooo Also England: These broken legs really hurt. I probably won't be able to walk for a while. World: <Jackie Chan face>

pojzon 4y ago
Thank you for explaining it for younger audience, but I dont think many of them visit hackernews.
- bee_rider 4y ago
  The YOLO crowd have to be in their mid to late 20's at least, now, right? That seems like prime HN demographics.
  - OrderlyTiamat 4y ago
    What are the hn demographics? Is there a regular survey or anything? Would people be interested in a survey?
    - kergonath 4y ago
      That would actually be very interesting. There’s a bunch of young idealists, but also a bunch of old geezers, and I assume everything in between.
    - reducesuffering 4y ago
      You can roughly tell by the prevalence of Twitter compared to Snap/IG/Facebook. 30s is definitely highest proportion, not 20s by a longshot.
- sph 4y ago
  The younger ones are not the one that need an explanation, as the distribution of votes in favour of Brexit was strongly correlated with older age. Brexit reinforces my very controversial belief that pensioners should not be able to vote. The future is not theirs. Elderly wisdom is a terrible cultural meme. People grow wiser as they age, but are not wiser in the absolute. Also, a young mind ingests many orders of magnitude more information about the world than a person with declining mental faculties and ossified beliefs. /rant

cm2187 4y ago

Not just self-inflicted, self-inflicted by the BoE, in the process of fighting the inflation the BoE itself created by printing money irresponsibly, in response to moronic lockdown policies.

mahkeiro 4y ago

Yeah when they were talking about all the red tape that will be gone and then introducing the ukca marking to replace the ce marking… (facepalm) The annoying British exceptionalism is for once coming to bite hard.

rwmj 4y ago
No one who does a days work in Britain thinks any of this is a good thing. It's largely generated by a far right party through a voting system that allows pensioners (a minority) to control who gets into power.
- rjsw 4y ago
  Not sure that is completely true. People working in construction or hospitality are probably happy for now that there are fewer people competing with them for jobs.
  - TheOtherHobbes 4y ago
    Even if that were true - and it isn't - countless export-oriented businesses have been shutting down because it is now insanely bureaucratic and uneconomically expensive to trade with a bloc that is just over 20 miles away. The lies told to get Brexit over the line normalised a period of exceptionalist reality-denying insanity which has spilled over into Covid policy, economic policy, climate policy, health policy, energy policy, immigration policy [1], transport and logistics, media credibility, and political stability. It is - without any exaggeration at all - an absolute shit show. No one earning less than a few million a year has benefited in any lasting or significant way. Certainly not big-picture economically. [1] Pandemic aside, Brexit has had no impact on immigration numbers. https://migrationobservatory.ox.ac.uk/resources/briefings/long-term-international-migration-flows-to-and-from-the-uk/ https://migrationobservatory.ox.ac.uk/resources/briefings/lo...
  - kergonath 4y ago
    There has been a labour shortage for years now in these sectors. It hasn’t helped their situation and both pubs and shops keep closing. These people have few reasons to be happy.

hanoz 4y ago

> mostly self inflicted ...by the Bank of England stoking a multi decade house price bubble.

brookst 4y ago

And since recessions are partly a product of mass psychology, announcing that this will be the worstest recession ever makes it more likely to be the worstest recession ever. Even now they can't stop punching themselves in the face.

JohnJamesRambo 4y ago
Did they punch themselves in the face or was it Cambridge Analytica type meddling from groups with a vested interest in Brexit happening stomping them in the face with a boot? From my brief reading about the matter it seems that the same villains showed up over there for that manipulation campaign.
- jfengel 4y ago
  Mostly column A, a little column B. There's also a big chunk of column C: the leading opposition party did a terrible job of opposing it. There was a chunk of the Labour party, including its leader, who also favor Brexit, albeit a very different kind of Brexit from the Tories. For them, it's more about anti-globalism and anti-corporate-control. That leader eventually resigned, but by that point the damage was done. I can't predict what would have happened if the Labour party had chosen to unify on a pro-Europe platform, but they were soundly defeated. The Tory party won resoundingly, and they had run on a pro-Brexit platform. There is always skullduggery, but it's really just something the UK did to itself.
  - DonaldFisk 4y ago
    This is not true. There were a small number Labour MPs who wanted to leave, including Gisela Stuart, Kate Hoey, and Graham Stringer, but by the time of the referendum, Jeremy Corbyn had long changed his mind, accepted we should remain in the EU, and campaigned for that: https://www.theguardian.com/politics/2016/jun/22/corbyn-final-pitch-referendum-voters https://www.theguardian.com/politics/2016/jun/22/corbyn-fina...
    - jfengel 4y ago

tick_tock_tick 4y ago

> mostly self inflicted So self inflicted that all the world is heading in the same direction? The EU and USA are suffering from pretty much the same issues.

cliftonk 4y ago

the ironic thing is that the US did tons of direct check-type helicopter money and yet our growth is healthier and more robust than anyone else in the world (and the dollar has also outperformed). given other countries did not undergo similar fiscal programs and have faced similar levels of inflation, i would argue that the larger component of inflation was the sudden global start-stop supply-chain shock from the pandemic rather than purely excess demand from the too-large fiscal programs. and i do not consider that shock to be self-inflicted (tho the excessive fiscal spending certainly was).

czbond 4y ago
You're confusing having THE reserve currency (for now) with having a healthy & robust economic economy or program. U.S. debt situation is just the least ugly of all the ugly. You have to pick something, so for now, the $USD is it.

systemvoltage 4y ago

Yea I was commenting here on HN in late 2020 about possible inflation because of all this money printing. Was repeatedly flagged for speaking up. You guys don't remember, 2020 was an utter shitshow in terms of ability to disagree with the mob. We are better now but it was quite telling.

vkou 4y ago
> Was repeatedly flagged for speaking up You weren't downvoted for saying that money printing -> inflation[1], everyone with a basic grasp of arithmetic can understand this. You were probably downvoted for thinking that letting the economy completely implode was preferable to inflation. Or, alternatively, that piling a few million bodies onto the altar of economic growth[2] in a pre-vaccine world was a good idea. [1] Also, there's a difference between Wall St. inflation and Main St. inflation, and the latter is as much caused by the war and supply chain disruptions as it is by the printing press. [2] Growth which wouldn't have even materialized, because everyone with an ounce of self-preservation dramatically changed their spending and travel habits.
- systemvoltage 4y ago
  No, I am not presenting the full arguments here so don't go after what I just put here. Similar comments were upvoted later this year. Reminds me of the pandemic 180 degree turns we made with respect to origins. At first, it was unacceptable to discuss lab leak theory. After Lancet post, it was then suddently acceptable. But, now it is uncool again. The mob is absolutely ruthless and disgraceful. We need a north star to follow that's based on reason and logic, not what others are thinking.
  - andybak 4y ago
    I've followed HN through the pandemic and I found it pretty balanced on the lab leak theory. I've personally always been open to the idea and I've not noticed a huge wave of "mob" behaviour either way.

mytailorisrich 4y ago

The main self-inflicted cause here is the energy crisis, which is by and large a result of bad policy recently and over the past decades. The second self-inflicted cause is public spending during Covid, bearing in mind that the UK has always been more exposed because it is not 'shielded' behind the euro. If you are thinking of Brexit, I don't think it is a major cause although it obviously does not help.

w14 4y ago
Indeed - it was set up long before Ukraine or Liz Truss. But aside from bad long term energy policy, the incompetence of Andrew Bailey can't be ignored in my view. In July 2021, Andrew Bailey said "Our forecast at the moment is that we do expect inflation to pick up in the next month or so really ... At the moment we don’t see that evidence [of long term inflation] but we will watch it, of course we must do, very carefully." So he took no action. By October 2021 his colleague Hugh Pill said "The magnitude and duration of the UK's inflation spike is proving greater than expected …" And yet they continued to do nothing. They continued to claim inflation would rise to a few percent and then drop back. It may be reasonable to say that they couldn't foresee Ukraine, but the inflationary pressure was already there, as you say partly because of Covid bailout money printing, but also from the supply side because of China's zero Covid policy, which was already recognised by many, but not by the Bank of England apparently, as being a fairly major contributor of inflationary pressure [1]. [1] - https://www.asiapacific.ca/publication/china-has-hit-inflection-point-its-zero-covid-policies https://www.asiapacific.ca/publication/china-has-hit-inflect...

ericd 4y ago

Yes, it’s self inflicted, but not due to recent events any more than a recession is the fault of whoever the sitting president is. There are deep, long-standing structural reasons for the stuff we find ourselves in, and the cycle is as old as civilization, because it’s just human nature. The politicians who advocate for austerity and fiscal discipline don’t tend to do as well as those who let the credit run like water.

kichimi 4y ago
The UK has been under austerity since 2008.
kayamon 4y ago
Why make the right choice when you can simply make the popular choice and then print more money to paper over the cost?

munk-a 4y ago

The other craziest thing is that the Bank of England isn't just saying "We'll have a recession" but they're specifically selling it as the longest recession ever. If you ever want to have the longest recession ever a great first step is for your central bank to say "Hey - this one is going to be a lot worse than most of them". One of the responsibilities of central banks (which the Fed has taken quite seriously) is to carefully control messaging - if you're overly optimistic when things are clearly bad you'll cause a loss of faith and it'll make things worse... but there's also never a reason to go above and beyond expectations in how bad you think things will be because that causes people to batten down even more hatches and prolong the recession. Markets are weird and they're essentially gigantic tabloids - the image of what's going on counts much more than tangible things like a shortage of widgets.

yakak 4y ago
The US is still entirely driven by its own consumers and the way its behavior reflects off the international economy, driving all that voodoo noise, but the UK? I think they should kill zombie businesses quicker (yay, interest rates!) and try to pick up as many international worker positions from companies least likely to be zombies. Their downward slope locally is pretty inevitable but puts them in a good position like a weak currency for exports. Giving up on a shoot the moon strategy that has gone this far usually means shooting yourself.
c7b 4y ago
> One of the responsibilities of central banks is to carefully control messaging That might be exactly what they're doing. The article says that their forward guidance for interest rate hikes is substantially below market expectations. Maybe they are hoping that a bit of gloomy talking will do some the work of slowing down price dynamics, reducing the need for them to take more drastic measures.
- smingo 4y ago
  Philosophers may consider this a "performative utterance".

thedrbrian 4y ago

we had to save the people from a 99.98% survivable virus..........

za3faran 4y ago

Add to that that it feels like some people want this to happen. It's a cycle. Media wants more clicks, they cover and exaggerate every small layoff, even though in other times no one would have said anything, people panic, managers and CEOs panic, more layoffs, snowball effect.