IMF revises UK GDP down (again) – is the Bank of England gearing up to print more money in response?
Back in July we wrote about the IMF reducing it’s outlook for GDP growth in the UK:
The IMF has published an update to their World Economic Outlook today, and it makes for pretty grim reading for the UK.
The heady days of growth at 0.8% in 2012 and 2% in 2013 have been slashed all the way to 0.2% and 1.4 percent respectively:
That’s right, prior to July this year the IMF did see growth in the UK of 0.8% for 2011 and 2% for 2012. Well here we are in October and it is revision time again for the IMF.
The IMF now sees GDP growth in the UK at -0.4% for 2012 and 1.1% for 2013:
(click for sharper image)
Which means in less than 6 months the IMF has reduced down their forecasts for the UK by a whopping 1.2% for 2012 and 0.9% for 2013.
Apart from highlighting just how poor the UK is doing economically it really highlights what a complete waste of time IMF projections really are. They seem to be peddling the same ‘hopium’ as John Major, with a constant over-estimation of how well the UK economy is doing, only to be forced to restate downwards their estimations at a later date. At some point the IMF’s entire methodology should really be called into question because it is clearly broken.
Back in July during that last downward revision we noted:
Which means that the idea that the latest £50bn increase to the balance sheet of the Bank of England is its last, is just wishful thinking. Back at the start of February this year we wrote a note about ex-BoE member, David Blanchflower, saying he thought that the BoE would print an additional £225bn in 2012 – this was back when the QE portion of the balance sheet of the BoE was £275bn – meaning that Blanchflower was looking for the balance sheet of the BoE to exceed £500bn by the end of the year.
Since February we’ve now had two rounds of money printing both at £50bn a piece taking the balance sheet at the BoE to £375bn – after todays downgrade in the growth in the UK we’re probably now looking at another £75bn-£100bn sometime in October/November, taking the balance sheet to £450-475bn by the end of the year.
We’ll have to wait until next month to see if our predictions of more money printing this year are correct, but after this IMF downgrade and some more poor data out this morning a balance sheet knocking on the door of £500bn seems the most likely outcome by the time 2013 rolls around.
And as for 2013, we stick by what we said back in July as well:
But what is scary is that now that the IMF has cut the outlook for 2013 as well, this all but guarantees that the expansion of the balance sheet at the Bank of England will be expanding all throughout 2013 as well – in fact as we’ve said on previous occasions, the global money printing simply will not end this side of the ‘big financial reset’.
The money printing is never going to end.
Related posts:
- UK manufacturing PMI plunges at second fastest pace in 20 years – so will the Bank of England print next week in response?
- UK production contracts 1.7% – Bank of England to print more money early in the New Year?
- David Blanchflower says the Bank of England will print more money before November
- As the Bank of England veers into insanity and prints up ANOTHER £50bn – get ready because they will print MORE
- CBI UK Manufacturing report makes grim reading – Bank of England money printing to come in October?
Link to this article: : http://www.goldmadesimplenews.com/analysis/imf-revises-uk-gdp-down-again-is-the-bank-of-england-gearing-up-to-print-more-money-in-response-8327/
Posted by Thomas Paterson on Oct 9 2012. Filed under Analysis.
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