Comments: Sad to say, Europe's big boys are still stuck in the mire

“If Britain is doing so well, how come it doesn’t feel like it?”

Data released this week gives a clue. There was the ONS household income survey and the analysis by the Institute for Fiscal Studies showing that average household incomes after tax and benefits fell in 2003/4.

Then there was the BoE data showing that Mortgage Equity Withdrawal in 2004 Q4 accounted for only 3.4% of post-tax income - compared to 8.4% at the end of 2003.

I've posted MEW graphs here:
http://www.graphicinvestor.com/econo/UK/MORTGAGES/Mortgages.htm

There can be only one conclusion - income drying up, costs going up, result misery.

Posted by David Sandiford at March 31, 2005 10:57 AM

I think it is rather disingenious to point to many of the smaller economies and look at thier rates of growth as some form of sucess.
I know this because I have been enjoying myself at others expense for a long while also.
In am sitting here with a fat belly and a warm glow because while staying at my brothers place, unbeknowst to him, I have just taken advantage of both his wife and his larder.

In rather the same way, the availablity of other peoples savings is so cheap its free in small countries like Ireland - just like my unwitting brother, who trusted me with access to his resources, by giving me the keys to his house, Ireland's tiny couple of million in population has the keys to a pool of 200 million EU savers to plunder, and interest rates which pay you money in real terms
.
If Ireland had to rely on its own savings to fund what can be laughingly called 'investment' in its many corpulances in both the property and banking sector and increasing public wages, and many other unproductive arenas, it would have ended its boom within 12 months as its currency became worthless due to reduced real purchasing power and a banking crisis.
As it is peoples average incomes are greater than in the UK.

When the crunch time comes I do not expect it to be pretty for me or Ireland.

(My brother is 18 stone and covered in tatoos, while I am a bird chested 9 stone minnow).

Posted by Tony Hammond at April 2, 2005 11:09 AM

I think the point about small economies is that there is an element of aggregate illusion:- if Germany or France's growth are disaggregated into state/regional growth rates, then you're likely to find a few regions that do much better than average and compare favorably with the "small economies" ( as well, of course, as some other regions that do worse)

Posted by Giles at April 2, 2005 11:02 PM