Great Britain: 6 Signs of a Developing Deflation

The British economy is still trying to bounce back from the 2007-2009 financial crisis, which cost the nation £300 billion, according to a September 12 study published by the Institute for Fiscal Studies.

Authors Jonathan Cribb and Paul Johnson say Great Britain’s economic growth rate has only been 0.3% since the financial crisis versus 2% pre-crisis.

A full recovery from the financial crisis may not happen, at least not in the immediate years ahead, according to analysis at Elliott Wave International.

Take a look at these six charts from EWI’s October 2018 European Financial Forecast, which is followed by the accompanying commentary:

Average weekly earnings, which were growing at nearly 5% per year in 2007, fell below 1% in 2014. They are growing at less than 3% today. The British pound has also fallen precipitously since 2007, and business activity has been sliding back downhill since 2014. Meanwhile, growth in residential asking prices is stuck at 0% again, down from double-digit yearly growth in 2007.

While bewildering to many people, the economy’s terrible performance over the past decade should come as no surprise to European Financial Forecast readers, as the 2008 financial crisis was generated by a massive drawdown in social mood. In fact, if you think that the last decade was bad, consider that this current performance includes a massive uptick in borrowing, as the bottom two graphs illustrate. Household debt in the UK stands at about 140% of GDP (up from under 100% in 2000), while government debt has ballooned to nearly 90% of GDP (up from about 40% in 2003).

The evidence conveyed by the six charts strongly suggests a developing deflation.

Get much more evidence in the free report, “What You Need to Know NOW About Protecting Yourself from Deflation.”

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