Is the UK car industry masking problems elsewhere?
It is no secret that the UK government's car scrappage scheme has led to an enormous increase in business in the UK car market, but is this sustainable and is this rise masking other issues in the wider economy?
The fact that the UK government recently extended the car scrappage scheme, and would seem highly likely to extended again as we approach the election, should not go unnoticed by those looking at the UK economy. There is now a feeling that the momentum caused by the UK government's car scrappage scheme may well push the UK economy back into growth in the third quarter of 2009. However, what will happen when the UK car scrappage scheme finally ends in 2010?
There is deep concern that the UK government, which has received more in increased VAT payments that it has actually invested in the car scrappage scheme, is not willing or not able to invest significant funds in the long-term. Despite the fact the authorities have made it known there is £2.5 billion to spend on the UK car industry, only a tiny portion of this has been allocated so far. Whether the UK government is keeping its powder dry as we approach the election, with more potential "bribes" to be announced, or is in fact unable to fund significant investment, very much remains to be seen.
Share this..
Related stories
Keep an eye on your finances even if the economy turns!
Even though many experts believe that the UK economy will turn around in the latter part of 2009 and the early part of 2010, this is not the time to take your eyes off your personal finances and assume that everything will sort itself out. As we have mentioned on numerous occasions, even if the UK economy was to turnaround tomorrow there will still be a significant drag in the employment market wi...
Read MoreG20 leaders play down hopes for April 2 summit
G20 leaders have today played down hopes of a substantial agreement when the G20 summit convenes in London on 2 April. This comes at a time when Gordon Brown is trying to place pressure on his fellow G20 members as he looks to pull "a number of rabbits out of a hat". A number of leaders have stepped forward to suggest there is no "open sesame" solution to the problems of the worldwide economic slo...
Read MoreBank Of England gives mixed opinions on UK economy
Charles Bean, the deputy governor of the Bank of England, has today attempted to tone down recent comments attributed to various members of the MPC. Over the last few days we have seen a number of relatively upbeat statements from various members of the MPC although Charles Bean has been a little more cautious today, suggesting the UK recovery will be a long haul fraught with uncertainty.
<...
Massive discounts on the high street are not working
Recent evidence would suggest that the large number of substantial discounts on the high street and online are not working with consumers willing to risk further delays in spending in the hope that prices will be reduced yet further. While this is a very risky game by the UK consumer it would appear to be working with the frequency and levels of discount sales starting to increase as we approach t...
Read MoreWhy Was Alistair Darling So Frank About The UK Economy?
Alistair Darling's interview with the Guardian newspaper seems to have prompted more questions than it has answered with people still in shock at the style and frankness of the interview and wondering exactly why he undertook such a high risk strategy.
It was his comment that he did not know when the economy would stop slowing and the language which he used which prompted many in hi...