West Ham fans sign 'I'm forever blowing bubbles'. So is George Osborne.
He tried to reflate the economy via the City with QE. He has created a commodity price and now stock market bubble in turn. And a few in the 1% gained.
Now he's reflating the housing sector by inflating house prices, not by building new homes.
And, as Duncan Weldon at the TUC has pointed out:
What has happened instead is almost three years of stagnation followed by a consumer-led recovery. Consumer spending is rising faster than consumer income with a falling household savings ratio making up the difference.
Follow that link and what Duncan shows is that the savings ratio has fallen dramatically in the last year:
In that case what we are seeing happen now is a classic credit driven bubble, and as we know those are totally unsustainable.
Boom and bust is back big time.
No wonder people are petrified about the impact of interest rate rises. The merest hint of inflation rising and the Bank of England will strangle this growth. It's hat unsustainable.
But of course, Carney may make a pact not to do that until June 2015. I don't rule that out. Watch this morning's press conference.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Should be especially worrying for Gideon, given that the cat is out of the bag on Labour’s real effectiveness in managing the economy – see
http://www.theguardian.com/business/2013/aug/04/labour-economic-record-clean-bill-of-health
The article’s headline “Labour’s economic record given clean bill of health at home and abroad” should be emblazoned in letters sveral feet high on every General Election billboard formerly graced by Dave’s gloomy face, proclaiming “It can’t go on like this”.
Too true – it hasn’t, because the Con-Dems knocked the wheels off the economy, and then have the gall to blame everyone else.
I just can’t see Labour saying that though….and am baffled as to why
TBH, I think their right to reply via the MSM has been restricted, the vast majority of what I am now aware of is thanks to your blog Richard, and to Steve over at Skwawkbox, where he covers Labour’s economic record:
http://skwalker1964.wordpress.com/2013/08/06/javid-cameron-torn-off-a-strip-left-speechless/
But I have to agree with one of his commentators that points out:
“The problem is this myth has permeated the wider public’s perception with the help of the TV News networks, most people get their infusion of the days news from this medium.”
Short of Andrews suggestion about “emblazoned in letters several feet high on every General Election billboard” I don’t know how that particular message will reach the wider public that are not as engaged in this aspect of the news, most simply want to switch on the BBC News and catch up, taking what they say as the full story, hence the ConDems and the RW’s need to perform a coup d’état on that particular “trusted” news source.
If the consequences weren’t so serious, I could laugh. I’m sure you’re right Richard, this is a political ‘recovery’ by Osbourne aimed at conning their way through the next election, nothing more than that.
While this government has been kicking the public sector and the least well off using the excuse ‘there’s no money’ they’ve had no problem with spending billions on QE and now, most grotesquely of all, underwriting the house market with taxpayers money.
There’s sure as hell no recovery from where I’m standing, with inflation in all the essentials eating away at my savings. If a Labour government did this the press would be screaming blue murder about unsustainable expenditure, but of course with this government, they get away with it.
Personally, I hope interest rates do go up and the whole thing blows up in this wretched government’s face. What stone do these people crawl out from under?