Long-term Forecast for Repossessions

In December 2013, the CML forecasted that the repossessions will be <30,000 for 2013. I assumed that it would be 29,000. The first report for 2009 placed repossessions at 46,000. This gives a reduction of 17,000 in 4 years - an average of 4,000 per year. Hence we should achieve a reduction of 20,000 in 5 years to give a target of 9,000 repossessions by December 2018.

After protestations, I found out that the final report of repossessions in 2009 was actually 49,000. The difference between that and the 29,000 in 2013 is 20,000 in 4 years i.e. 5,000 per year. So, in 5 years we should achieve 25,000.

The protests continued: it gets progressively harder to reduce repossessions from lower and lower figures. First, a brief history of repossessions and unemployment:

Year	Repossessions	Unemployment
2008	40,000	5.5%
2009	49,000	7.8%
2010	36,000	8.0%
2011	36,000	8.4%
2012	34,000	7.9%
2013	29,000	7.2%

As you can see, the difference in repossessions between 2010 and 2011 is zero; between 2011 and 2012 it is 2,000; between 2012 and 2013 it is 5,000. In other words, as the repossessions gets smaller, the difference gets larger.

Notice also that the period Q4 2008 to Q1 2013, the economy was in recession and we are now in a recovery which has taken hold. Also notice that there's now no relationship between repossessions and the rate of unemployment.

A paradigm shift has taken place during the recession. It's true that adversity concentrates the mind.

So the target for December 2018 is 9,000 repossessions. I have no forecast  for unemployment yet. But lets have a look at the history of recessions. Unfortunately, we didn't have a recession at the turn of the century so there seems to be a loss of continuity:

Year	Unemployment
1981	12.0%
1991	10.8%
2011	8.4%

This proves beyond a shadow of a doubt that society is becoming more humane i.e. socialist. The above figures imply that, if we had a recession in 2001, the peak unemployment figures would've been approx 9.6%. Notice that the peak unemployment figures are coming down substantially. Repossessions in 1991 were 75,000 and in 2009 it was 49,000 - a tremendous reduction but it covers a longer period.

In the past, peak repossession used to coincide with peak unemployment but not anymore.

OECD Predicts that UK GDP Will Exceed 3%

"In November, it [the OECD] suggested that [UK] GDP would be 2.4% in 2014, but the prediction is now 3.2%. This is higher than the forecasts for the US (2.6%) and the Eurozone (1.2%)".

This is not far from Mark Carney's forecast of 3.4% and he based it on the results of interviews the BOE had with industry. Last month the IMF waded in with their prediction of 2.9% after the chancellor's 2.7% forecast which was upgraded from 2.4%.

As you can see, we started the year with a forecast of 2.4% which the Chancellor revised to 2.7%. Then came the IMF with 2.9% and now the OECD with 3.2%. The clear winner is Mark Carney who stuck to his guns with a forecast of 3.4% despite people baulking at it.

At long last, the troops are rallying round my forecast of 3% for 2014. However, an updated forecast for 2015 is 2.7% from 2.5%. Although it's a step in the right direction, it's too far from my target of 4%. However, I wanted such a high growth rate because I was trying to get the budget to balance by 2016 so that we can start reducing the National Debt to manageable levels (45% of GDP) by 2018/19.

This dream was shattered when the Chancellor announced that the government will balance the budget by March 2018. Some European leaders are saying that a manageable level is 60% of GDP. That may be true but it leaves too much debt for future generations. The WPM will work on the basis that we'll achieve 60% followed by 50% and eventually 45% if not lower. I apologise for not setting deadlines, I don't want to miss them and give the wrong impression.

I said earlier that I hope the Chancellor, in his 2015 budget, would report that the government will balance the budget by March 2017 and in the Autumn Statement he will report that we'll balance the budget by March 2016 - my original plan. We'll get a clue in the Autumn Statement of 2014.

The fact that GDP growth is being revised upwards, it makes it more and more likely. Unfortunately, there are no takers of my 4% in 2015. But then there were no takers for my 3% in 2014 apart from Mark Carney. So there's still hope.

I thought that leaders are supposed to be ambitious  and set bold targets then make policy to achieve those targets. This type of leadership is being left to the WPM who are rising to the occasion. Their targets are often ignored when published but are eventually achieved.