Deliberately increasing living costs during a cost of living crisis is like trying to put out a fire with petrol.
100%
Everything they do is counter-intuitive.
Like I've said a million times - they've got everything back to front, that's what causes the chaos.
You can't have a thriving economy and low government debt.
You can't have a thriving economy and cost of living crisis.
And capitalism demands a thriving economy.
See the posts above ernie. If we had matched the eurozone we would have a larger economy and lower inflation over a period of years. We have been teetering on the edge of recession while they have been growing. Our economy is smaller than precovid. Theirs are bigger.
There is no doubt brexit has cost us all significantly and this is continuing and compounding.
@ernielynch - I call doing better the effect of the economic situation on the general population
A minor recession, but with much lower inflation would be way better for us right now than growth in GDP, but lower standards of living.
Nice to see our resident Bexiteer still banging the drum
Everything is clearly brilliant! If its not, then thats your fault for not believing enough
Cheers!
Jeezus are we back to derailing to brexit! Well done TJ, you never fail in your total obsession! 😂🤣
Nice to see our resident Bexiteer still banging the drum
Isn't it TJ that's still banging the drum?
I wouldn't call TJ a brexiteer!!
In any economic discussion it needs to be said. I merly pointed out that a post above mine blamed external factors soley for our economic woes. Thats not so. That lie needs to be corrected . Brexiteers need to be reminded of this every time they try to deny it.
Murphy pointed it out, if you read the thread linked to in the post you were replying to TJ..
"So why have we got inflation? The answer is that we reopened after Covid too quickly, resulting in those with wealth seeking to spend on high-ticket items when supply chains to the UK and within it were disrupted.
That pushed prices for some goods and services up for a while. Cars were impacted heavily. So was the cost of new kitchens and building work in general. That situation is, however, now long gone.
In the place of this short-term, and entirely self-correcting inflation, there has come inflation from another source. That is the inflation that has come as a result of war in Ukraine.
But, again, and quite remarkably, most of that inflation has now gone. Wholesale food and shipping prices have now returned to pre-war levels. Gas and petrol prices have fallen drastically from their peak. The underlying causes of price war-based rises have now gone.
But inflation has not. There must be other reasons for that. There are, actually, three.
The first is Brexit. It has created continuing supply chain disruptions and has imposed considerable extra costs that are fuelling continued inflation. This fact cannot be avoided."
...his further points are probably more relevant (because the government and BofE are making decisions right now that could be done differently)... all worth reading. The first post mentions external triggers as part of the intro/background, but the thread as a whole is focused more on where we are now, and how UK based decisions (including Brexit) are key. Covid and Ukraine have been the key triggers of inflation, worldwide, but that shouldn't be allowed to mask UK specific mistakes and problems that need solving (rather than exacerbating with more poor UK gov decisions by Sunak and Hunt).
In any economic discussion it needs to be said.
And don't you just....
IT'S ALL THE FAULT OF BREXIT!
Btw I'm loving how you suddenly take on Tory economic priorities, when it suits your agenda. You use the Eurozone as an example of doing better but dismiss the significance of recession, inflation in the UK is apparently a more serious problem!
That is exactly the sort of talk that an arch-thatcherite like Jeremy Hunt would approve of - inflation is a greater evil than recession, and bollocks to unemployment.
That is exactly the sort of talk ...
That TJ hasn't said. Please don't bite TJ. We can read what you've already posted, and ignore the lines that Ernie is putting in your mouth. We know you haven't said them.
Yeah you never said that, in case you weren't aware, listen to Kelvin!
This is the scary stuff:
Hunt has already said that he is "comfortable" with recession if it results in lower inflation:
The principal reason that inflation is higher in the UK than in other major economies is that the UK has fairly low unemployment. UK unemployment is 3.7% compared to 6.5% in the Eurozone.
Setting the UK apart is a jobs market that is struggling to recover from the Covid-19 pandemic, Brexit visa rules and the decision by many older workers to quit the employment scene.
The Tories would be perfectly happy to significantly increase unemployment, but not necessarily by easing visa rules. Instead by slashing public spending, with little regards for the consequences:
I don't know what the difference between slashing the state and austerity is. As far as I am aware there isn't any.
“You can’t have a thriving economy and low government debt.”
Switzerland would seem to be a pretty good counter to that - the national government consistently adjusts expenditure to avoid over borrowing.
https://commodity.com/data/switzerland/debt-clock/
https://tradingeconomics.com/switzerland/government-debt
Would we like the UK to be more like Switzerland (one extreme) or more like Venezuela / South Africa (the other extreme)?
The flip side of UK’s low unemployment is poor productivity - one of the lowest in the G7 - particularly when shackled by Brexit which means there is little opportunity for economic recovery through growth. As said above, we’re still in a post-pandemic hole in comparison to our peers and have fewer options.
With an aging demographic reluctant to re-enter the workforce (because many vacancies are shit, minimum wage, soul-destroying working for a faceless corporate) an embargo on immigration, then it would appear that starving people with sky-high fuel and food inflation appears to be the Government’s preferred option - particularly when unshackled from the Working Time Directive. Welcome to the new utopia!
Oh look, it's the Anti Growth Coalition!
https://twitter.com/PolitlcsUK/status/1671583120007602185
Deliberately engineering or allowing a recession to control inflation...Trussonomics is starting to look good in comparison. It is all absolutely ****ing insane.
Anything to avoid addressing an ideological decision to destroy our most important trading relationship. Perhaps when inflation is still running at 5%, tax take is through the floor, inward investment has collapsed, people are losing their homes hand over fist, businesses are closing and jobs are disappearing, while other European nations are mostly growing, albeit slowly, someone will be willing to say it, and start fixing it.
an embargo on immigration
There is no embargo on immigration. Immigration into the UK has never been higher.
https://www.bbc.com/news/uk-48785695.amp
Deliberately engineering or allowing a recession to control inflation…Trussonomics is starting to look good in comparison. It is all absolutely **** insane.
It is just old-fashion Thatcherism:
"Rising unemployment and the recession have been the price that we have had to pay to get inflation down. That price is well worth paying."
- Tory Chancellor of the Exchequer May 1991
And capitalism demands
a thriving economy.shareholders are paid above all else!
FTFY
<p style="text-align: left;">Deliberately engineering or allowing a recession to control inflation…Trussonomics is starting to look good in comparison. It is all absolutely **** insane.</p>
Yes but was always on the cards when people were crying about Truss.
It was next in the sequence of 'we only have one idea really.'
We shouldn't be afraid of recession. Or at least, we should be sensible about it. So much of the UK political dialogue views it like a good/bad switch, as if "avoiding recession" by a bawhair is good news and slipping into it by .1% is an utter disaster, or avoiding recession purely on the technical definition is what matters- like, by all means have a decline every <second> quarter as long as inbetween you always have one that's stagnant or fractionally up, that means it's not a recession. Of course it's totally possible to have years with a recession in where the economy actually grows, or have years with a shrinking economy but no official recession.
Here, in the EU we have 2 quarters of decline so officially a recession. But in the last 4 quarters there was .8% growth, .4% growth, -.1% growth and -.1% growth. In the UK we have .1%, .1%, -.1%, .01%. Our economy is essentially stagnant, theirs has grown, we have underperformed them by every worthwhile metric except for that scary word "recession". Our GDP is still .5% lower than before the pandemic, the EU's is 2.2% higher. Give me that recession any day compared with our growth.
And of course everyone loves to select their window of data, it's hardly possible to have a eurozone vs UK economic chat without it. The UK's feeble recovery from the last crash meant that occasionally years later we'd "outperform" a percieved peer/competitor and have banner headlines about it, purely because they'd already done more of their recovering while we hadn't. We got to claim a strong performance in 2021 and 2022 entirely because we had a had the biggest decline in the G7 in 2020 and so not quite recovering can be spun as success, just like "Halving inflation" can.
But most importantly, we have to ask who the economy helps. More of the economy ends up benefitting less and less people, we would absolutely be better off as a nation with a slightly smaller economy but less of it scalped off, or with a smaller economy that supports more good wages. What use is a growing economy and a poorer population? But that's been the reality every year for most of my life. We celebrate growth and ignore what it means. The UK's population has been in a recession for a decade while the "country" has seen growth.
Good post Northwind.
I think things are unravelling - and the Tories are well aware that they're not really in control of much at all.
I'm wondering whether we will get a pause on interest rates today instead of a rise.
I find it staggering too that both Labour and the Tories have become victims are their own economic product and adherence to fiscal responsibility will be the thing that drags us further under.
Or could the Tories pull a rug from under Labour and turn on the spending taps before a G.E?
Both parties seem to be fine with the decline of everything and expect growth to magically appear without the spending that needs to take place.
Tories built their entire model out of accelerating house prices - if that goes then they simply can't survive.
Reeves is making noises about forcing Banks to do this and that but it amounts to flexibility on repayments rather than any actually help.
If you think about it we have several overlapping events which should remind us the Government is here to do the best for its people:
- Decline and effects of neoliberalism
- Brexit and the fall out
- Covid
- House Price Bubble
It does get incredibley complex to make one point without referring to any of the above as they're all linked but its safe to say that something has to be done and that's where both parties are simply just hoping things correct themselves.
The Government and Labour have yet to wrestle with the magnitude of the problems here.
(Oh and inflation is inherently complex - there is no clear explanation that the 2.0% target is of any use really. I can't see that being the target going forward. )
100% agree with Northwind's post above. Our growth and wealth are both just smoke and mirrors to hide the real issues.
I hope that whatever happens today with rates is the correct thing when judged in a few years but whatever happens we are all in for a dollop of financial pain and the fault for that lays squarely with Rishi and co.
100% agree with Northwind’s post above. Our growth and wealth are both just smoke and mirrors to hide the real issues.
Yes and their failing by their own metrics - we had barely any growth in the run up to the pandemic.
(I'm not an advocate of growth for growths sake but classical economists love it don't they?)
Dear god! Has anyone just listened to James Cleverley on Radio 4, doing what Chris Mason correctly referred to afterwards as 'flailing around'?
How on earth is that idiot a government minister?
To summarise the interview:
"Rishi Sunak says his target is to halve inflation, what is the government actually doing to achieve that?"
"Erm.... errrrrrrrr.... well.....erm.....eerrrrrrr.... I dunno really. Nothing?"
Reeves is making noises about forcing Banks to do this and that but it amounts to flexibility on repayments rather than any actually help.
The whole point of the finely-balanced affordability models that banks and building societies use is that the products and rates they offer, and the amount of capital they have to hold, are directly linked to the likelihood of arrears/defaulting.
'Flexibility on repayments' is basically 'allowing your customers to be in arrears', which will pretty swiftly be reflected in the amount of new lending that lenders do, and the cost of it generally.
We shouldn’t be afraid of recession.
Can't really disagree with anything you've written, and, on reflection, I think those comments are preparing the ground for weaker than forecast growth figures next year, even if a technical recession is avoided. It's just a feeling of helplessness as, year on year, the UK becomes a less attractive place to invest through a decade or more of bad economic management, pisspoor political decisions, and rampant wealth diversion to a small chunk of the population.
<p style="text-align: left;">With such an unequal distribution of income, it is redistribution that will kickstart the economy not growth that benefits only the few.</p>
Anything to avoid addressing an ideological decision to destroy our most important trading relationship.
Yeah, but blue passports. That no one will be able to afford to travel abroad to use.
As for redistribution being the key - I couldn't agree more. But that has been the great trick of the New Right - convincing you that your pittance is better than 'their' pittance, you deserve it more and 'they' want to take it off of you - and Labour will help them. This is another really toxic legacy of Thatcherism - I may not be alright, Jack, but as long as you're poorer than me, that's good enough.
BOE goes for 5% Little Rishis back benchers are not going to be happy!
Jeremy Hunt has just made a statement the government fully support for the BoE doing just that
Even by Tory standards, this is a new one. Actively driving the economy into recession 😳
Sooner or later one of the two big parties is going to have to address the one bit of this god awful economic picture that was entered into entirely voluntarily.
That one, Keir. You know, the one beginning with B...
Even by Tory standards, this is a new one.
Apparently not, as was pointed out to me. Didn't realise they had been so explicit and open about it last time around.
Presumably the BoE is also going to sternly insist that Putin withdraws from Ukraine?
It’s just a feeling of helplessness as, year on year, the UK becomes a less attractive place to invest through a decade or more of bad economic management, pisspoor political decisions, and rampant wealth diversion to a small chunk of the population.
While in the hands of the party of economic competence, supposedly. How can people not see through these utter shysters!
How can people not see through these utter shysters!
Populist nationalism and othering. It shouldn't be enough. But it is.
While in the hands of the party of economic competence, supposedly. How can people not see through these utter shysters!
Just because you've informed yourself, doesn't mean that others have. There are ingrained opinions that will never be changed because people are ignorant of what is actually happening. Some of that ignorance is wilful, mostly people just don't follow politics or the economy. Boris hiding in the fridge was a joke to a lot of people, not the act of a coward that it really was. Sunak isn't even on a lot of peoples radar's because he's a ghost when something important happens. Today he's a soundbite in a factory saying the "we are going to get through this" but without the important information of HOW we going to get through this?
The interest rates aren't tangible to a lot of people and Sunak and (H)unt aren't exactly going out of their way to explain things
Just listening to Rishi's press conference,
I do love hearing that this is all 'a price worth paying' and 'a sacrifice we have to make' from a multimillionaire who won't be paying any price whatsoever, personally, or making any sacrifices at all.
Very George Osbourne-esque
We're all in it together' eh?
In another worrying development Rishi seems to have had some sort of coaching and has adopted the Tony Blair style of speaking to try and appear less 'posh'. I know he's always done it, but its so notable now its embarrassing for all involved.
Like David Cameron trying to pretend he liked football but forgetting which team it is he said he apparently supported 🙄
How can people not see through these utter shysters!
constant propaganda pumped out by the right wing press and thus distorting the BBC and other supposedly neutral media as the BBC take their neutrality from the midpoint of the print media
While in the hands of the party of economic competence, supposedly. How can people not see through these utter shysters!
I know you say that your parents don't but it is clear that most people do.
The last half a dozen opinion polls show support for the Tories at below 30%.
I believe that the Tories have never polled less than 30% in any general election for the last 200 years.
That is still 30% thought isn't it. How bad do they have to get? I suppose they are so far in there is no going back.
How bad do they have to get?
Or how good do opposition parties need to be to encourage people to switch party allegiance?
Although I am perfectly happy with over 70% of people seeing through these utter shysters.
constant propaganda pumped out by the right wing press and thus distorting the BBC and other supposedly neutral media as the BBC take their neutrality from the midpoint of the print media
On another note, it's the 'BREXITEERS ONLY' edition of Question Time tonight, live from Clackers.