Blighty hasn't been doing that badly historically, thank you very much. Indeed, it has shown precisely how flexible it can be.

But surely her options were to

A) use north sea oil money and the growing financial sector to improve these industries or

B) hasten the move over to services, eventually hastening our decline. Decimate industry and the North, and use the money on tax breaks.

I'd like to suggest that with hindsight she picked wrong.

I can see where she went wrong - but in 1979 - not many could . With benefits of hindsight education and technical tarining should have been upgraded so when bankrupt manufcaturing firms went - many could have gone upmarket.

Germany and Japan have done this.

Anyway I have seen a graph - its an amazing one and it goes back to 1970 and there are two lines on it - One is the numbers of people employed in manufacturing and the other is the numbers of people employed in financial services.

The manufacturing one commences at the top in 1970 with something like 7 or 8 million in it.

The financial services one commences at the bottom with under a million on it.

The two lines cross in the mid 1980s and the financial services one ends in 2008 with the same number as the manufactring one was in 1970.

Well is this good or bad - we can discuss that one for ever really.

This country has done well out of financial services - but as we have all seen. Its makes the economy somewhat volatile to say the least.

It would be nice if we could expand specialist manufacturing like the Japanese and Germans. But its not in our culture and you cannot  be what you are not.

Gavin S.

South Cambridgeshire. 93metres asl.

I'd question that one big time Gavin.

We don't have a problem with technical skills in productive  companies, the ones we do have are are well run and profitable.  The problem we have is growing them into  companies with International clout.

IMHO this is due to a failure of  Financial Services provision in this country and it's inability to take a long term view (a decade or so)  of investment.   It's ironic that a country with such a large FS sector, that was born to facilitate productive investment, now serves  the very  sector that  allowed it to grow  so poorly.

This short term "mindset" has also  leached into  company management, who often are only interested in  flogging off their charge  to facilitate a comfy retirement.  You just don't see management of  the likes of Siemens of Bosch  doing that - they are in for the long haul - as are their financial backers.

Of course, in European terms, VW IS an indigenous manufacturer

Mixed picture on the European banking front for the tractionistas, according to S&P.

Asset quality worsening in Club Med, stablising in the UK, France, Scandinavian countries and 'to some extent' Germany.

http://www.standardandpo...s/?assetID=1245218336657

US GDP numbers worse than expected. Recovery now faltering?

http://noir.bloomberg.co...d=anM.r7Bj.c8g&pos=1

too many uncertainties. is the pick up in european GDP figures simply following on from the pick up in US GDP in the same way as the drop 20 months ago over here followed the drop over there. if so, we will certainly be lookign at a double dip.

the interesting difference is that the european ecconomies are making efforts to reduce their structural defecits earlier in the cycle than the yanks who still have to get serious about their cuts. the americans have always run a pretty substantial structural defecit in the past. will the 'new post credit crunch' global economy be prepared to fund this any more ?? keep your eyes on the USD exchange rates. i read earlier today that stg is in for a rough ride on the back of our likely double dip recession due to bedget cuts. then we had a report that consumers were not optimistic going forward. then stg dropped. since mid morning it has come right back and higher than its opening. almost as good as watching GFS FI !!!  

I made this point weeks ago. The outcome was obvious. The irony is that the spending cuts were forced on European countries primarily by US ratings agencies. The result is it has left the US in the cart because of a devalued € and because the Euro nations look to be getting their house in better order than the US. The Euozone has actually done relatively well out of the ratings agency debacle. Meanwhile, in the US the printing presses are being fired up again and fiscal stimulus 2 is on the agenda.

Money and credit are again shrinking fast in the US. The solution is not further fiscal stimulus, which thus far seems to have profited Chinese exports far more than American jobs, but for the US Federal Reserve once more to turn on the printing presses through a renewed programme of purchases of Treasury securities – in other words, more quantitative easing.

http://blogs.telegraph.c...tion-for-the-us-economy/

Anyone talking up European recovery is whistling in the wind IMO.

The structural problems in the Eurozone, papered over by a massive bail out fund, are worsening and will inevitably rear their ugly again. This comment from S&P is telling  :

"Given the frailty of the economic recovery and the lagging effect of the
recession on banks' loan portfolios, we believe the high rate of losses is
likely to continue in 2010 and may only start to abate in 2011," said Mr.
Pintado. "Asset quality is, in our view, either worsening or remaining under
pressure in Italy, Spain, Ireland, and Greece, owing to low economic growth
and sharp corrections in domestic real estate markets. By contrast, it is
stabilizing in the U.K., Scandinavian countries, and France, and to some
extent in Germany."