Inconsistant Figures Cause Economists To Scratch Their Heads!!

Aug. 28, 2012 - PRLog -- Figures issued last week by the Office of National Statistics (ONS) showed that employment had increased at a time when the second quarter has come in with a preliminary GDP figure of negative 0.7. What are we to believe? Was there a temporary lift from the Olympics? Has there been an increase in part time working? Or are the figures wrong? How do they compare to firms going bust?
In 2011 there were around 17,000 liquidations of companies in England and Wales. In 1992, in the eye of the economic storm back in the 90’s there were 25,000 liquidations (around 47% more). In 1985, well before the economic storm, there were still 15,000 liquidations.
It is also interesting to note that in 2012 the number of active companies is around 2.3million. This compares with only about 900,000 in the early 1990s and less than 800,000 in 1985.
This seems to suggest that the ‘rescue culture’ is working rather than the more aggressive policies that were operated by the banks during the early 90’s – but at least the weaker companies were being forced out of business. Are companies now being kept afloat contributing little or nothing to the GDP? These, so called, “zombie companies” still take a share of the market. Their withdrawal will ultimately create a healthier market as the most efficient companies not only survive but grow and prosper.  
Tim Corfield commented “If the Governor of the Bank of England is baffled with the statistics we can only guess about what is really happening in the economy. The Euro crisis is having a massive effect on business confidence. I see the annual rate of UK bank lending has dropped from minus 4.7% to a record low of minus 6.2% - I can’t believe the economy will achieve growth until this position is reversed.”

Article Written by Tim Corfield

http://www.griffinandking.co.uk