Originally Posted by
aristoph
That is quite possibly the case if you are involved in manufacturing - a collapsing pound will make you one of the winners for the next few years so enjoy it. Unfortunately for the wider economy manufacturing accounts for <20% UK GDP, whereas service industries account for >70%. And much of that is supported by consumption financed by debt and now that rug has been pulled out from under our feet. The effects of this recession will be most severe in the South, not the North, amongst professional service-oriented businesses, not manufacturing.
The rapid rise in both the service and public sectors ought to have been giving rise for huge concern for some time.
If we look back over centuries the amount of our waking hours required to put food on the table, or clothes on our backs, has plummeted through mechanisation. In the last century the amount of hours we have to work to buy a car or travel from London to Edinburg or New York has fallen drastically, as has the effort it takes us to extract fossil fuels from the earth. At the same time we've taken huge strides in medicine and pharmaceuticals that keep the population healthier and productive for longer.
Much of that is down to industrialization and mechanization and it's the true reflection of wealth. Yes it's true that somes services contribute to this, for example software, but trading land/houses amongst ourselves for ever inflating prices does not. Equally we do not increase productivity through unstable amounts of gearing / leverage, be it corporate or personal, though the "advisers" and "Bankers" remorselessly skim wealth from every transaction.
Having struggled trying to fund businesses in the UK, I got sick and tired of hearing Bankers and/or other investment managers sneering at hard to predict returns from genuinely new ways of doing things, versus "safe" returns from financial manipulation and real estate. In the end it's a big part of what drove me to live and work abroad.
FWIW UK PLC also seems to be sticking its head in the sand over the dwindling North Sea oil and gas reserves. The country has had it fairly easy for the last 30 years in comparison to, say, Germany which has had to export to pay for its energy imports.
I really hope the UK takes this opportunity to strip away the froth and noise of the fictitious paper wealth it's been "generating" over the last couple of decades and look again at the fundamentals. It doesn't need to go back to smokestack manufacturing, but it does need to educate and reward more technologists, whatever their field of interest, and steer the emphasis back towards genuine productivity improvement. Without increasing real wealth creation it's hard to see how the country is going to pay the bills in the medium term.
Sadly Broon and Darlings comments on Public sector borrowings do not give me a lot of confidence they have the faintest clue where to start.