Saturday, 22 December 2012

UK Sectoral Balances and Private Debt Levels - Q3 2012

Q3 2012 Figures are out.

Normal service is resumed in Q3 after the Q2 post office pension transfer anomaly. Overall the non-government sector is saving to excess driving the government deficit - largely via the automatic stabilisers.

The five sector chart shows that the the government deficit is divided fairly equally between the business sector, external sector and households. So its a general level of excess savings desires in the non-government sector.

And finally the private debt levels:

The big news here is that the UK has started to relever in 2012. There's a definite trend emerging there now.

Source: Office of National Statistics, tables RPZD, RPYN, RQAW, RPZT, RQCH, DJDS (Seasonally adjusted Net Lending/Borrowing per sector plus residual error) and YBHA (Gross domestic product at market prices, seasonally adjusted). Private sector debt based on tables J8XI, NLBC, NKZA, NNQC, NNRE, NNXI, NNXM, NNWK, J8XK, NLSY, NLUA, J8XM, NJCS, and NJBQ (Lending, securites and derivatives per sector, not seasonally adjusted) scaled by BKTL (Gross domestic product at market prices, not seasonally adjusted).


Acorn said...

When you use "capital account" in the charts, do you mean "balance of payments". I am thinking that the latter, is the sum of current account and the capital account which includes the financial account. As used in ONS data as all UK transactions with the rest of the world.

Are you now the centre of MMT blogging in the UK, we seem to be a bit short of champions?

PS. Your site is very slow to load for this XP user. Rendering the charts takes an abnormally long time.

Neil Wilson said...

Instant rendering here - using chrome and safari on several computers.

The Capital Account balance official title is 'Net Lending by Rest of World'

It is the balancing item on both the capital account and the financial account (Line B.9 in the national system of accounts).

Whether I'm the centre of blogging is for others to decide. I just want to get the system fixed and working for the benefit of everybody again.

Joshua Wojnilower said...

Thoughts on whether this relevering of the private sector is a positive turn? Presumably the short-run effects are good for GDP growth, but the sheer size of the financial sector and interest burden from private debt appear worrisome.

Tom Bergbusch said...

Interesting as always.

Noted an apparent typo:

"failure equally" -- "fairly equally" I think? Looks like something that a spell checker has imposed on you.

Finally, looking at sectoral balance graphs: am I the only one who often feels that they resemble Rorschach inkblots: every but neo-classical economists can see what they are about, but the neo-cons just see butterflies.

Neil Wilson said...

My fingers do that - insert a word I wasn't thinking.

Fixed. Ta.

SpiritSkill said...


Do you still calculate the credit accelerator?

Neil Wilson said...

Yes. It's on this spreadsheet

Acorn said...

Neil, graphs work much better with Chrome thanks for tip.

Looking at your chart,what happened around 1989, that started the Household sector saving again?

What was happening at the end of 1998 when everything appears to be in balance; just before Households went on the borrowing binge? Did we sample Nirvana at that moment because I think I missed it?

The coalition austerity deficit reduction plan, has to mean that the Household sector goes back into deficit territory due to lack of income instead of household deleveraging. What say you?

Neil Wilson said...

(i) Black Wednesday and the end of the 80s housing boom

(ii) The asian credit crisis.

Anders said...

Neil - I was wondering, supposing you had a MMT meeting with Ed Balls (not sure if you'd even want one..) what material would you cover?

To me, I'd want to start with the idea that we don't need to maintain an independent BoE for inflation management, but I don't get the sense you see this as an important first entry point to MMT.

I think I've seen some decent high-level 'intro' pages on your site, but you don't link to any 'mandatory readings'...

Neil Wilson said...

The legislation is already in place to allow the chancellor to tell the BoE what to do. You just need to elect a chancellor prepared to do that.

I wouldn't bother with Balls straightaway. I'd rather have a meeting with Mandelson and Beaker and sell them the vision of the Job Guarantee, etc.

You just dismiss the existing economic theory as wrong. Completely wrong. It missed the crash and it has failed to generate a recovery, and the reason for that is that its beliefs are just wrong. It's Old Religion, and the Gods have abandoned it.

We can do the Job Guarantee because we understand how Modern Money works, and with Modern Money government spending always pays for itself.

So I'm no longer interested in what the old Shamens shake their Juju sticks at. I'm interested in the fears and concerns of Joe Public and how Modern Money can help them feel more safe and secure economically.

Because that's really what matters when the X goes in a box.

I see the challenge of 2013 as turning the macro into a sales pitch.

Tom Hickey said...

"You just dismiss the existing economic theory as wrong. Completely wrong. It missed the crash and it has failed to generate a recovery, and the reason for that is that its beliefs are just wrong. It's Old Religion, and the Gods have abandoned it."


Anders said...

I'm keen to see this sales pitch!

Why Beaker? Do you see a Lib/Lab coalition??

Neil Wilson said...

That's the trouble with front line UK politics. There are so many overpromoted policy wonks to choose from.

WillORNG said...

Neil, the graphs don't show up on my mid-range android phone, would opera mini do it better, any suggestion welcome?

It would help showing friends relations.

I find that the corrupt/criminogenic bank regime has more traction these days and for that we can blame the politicians we voted in under the neo-liberal grooming we've had the last 4 decades.

Neil Wilson said...

They are showing up here on an iPad.

They are javascript generated - have you got it switched on?

Clint Ballinger said...

Great visuals, really helps show how these things fit together.

Clint Ballinger said...

Great visuals! Really helps show how things fit together.

Keith Leighton said...

What I think is surprising though is that the relevering took on some sort of quick spike up. That had me a bit suspicious back then that it was merely artificial. Seeing these graphs proved me otherwise though.