The messages on the economy from the Office for Budget Responsibility and Bank of England could not be more different.
The OBR says the economy is tanking, and growth will fall for two or three years, and remain lacklustre thereafter. It also says that inflation has now peaked.
The Bank of England, by raising interest rates recently, said that it had to take steps to dampen down a potentially overheating economy.
Only one of these views is right. And rationally, there's not a person of sound mind who will side with Mark Carney and the Bank of England on this one.
UK productivity is dire, and will not improve on the basis of the paltry sums to be spent on training mentioned yesterday, welcome as such pittances are. In that case growth is not going to happen, and any inflation there is arises purely from exchange rate shocks, which cannot be addressed or corrected by Bank of England action. So, to put it another way, interest rate rises should be off the Bank of England agenda for a very long time to come.
Now, is Threadneedle Street listening, because we need to it to be doing so? This is not the time for a supposedly independent Bank of England to be making things worse than they already are.
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It’s empty theatre, Carney aping what real bankers (as opposed to political stooges) might (or might not) do. It makes it look to the uninitiated like he’s a player in this when he isn’t.
I’m utterly convinced that the rich – and the party of the Rich (The Tories) just want to ‘nudge’ the population away – never mind into work. They don’t want to have policies that create wealth for others or provide training and jobs for our children and grand children. They are just not interested in us anymore.
The Tory Rich want a UK that looks more like a tax haven because making money out of money is what they have been about since the late 1960s/early 1970’s. The Tory Rich want the general population to be reduced so that the need to create employment and transfer payments is got rid of. Just as long as there are enough people to be barristas so that the coffee culture the landlord caste enjoys is sustained. Or how about few badly equipped soldiers who can die to make it appear that dear old Blighty is still a major force in the world?
They want a UK where the rich can build new homes in the country side with helipads like James Dyson’s son recently tried to do. http://www.telegraph.co.uk/news/2017/11/19/son-british-inventor-sir-james-dyson-withdraws-planning-request/
The Tory Rich do not want a Bank of England doing its job either. They can manage their own financial affairs thank you very much. They chose one of Them to be the head of the BoE – a North American alumni of Goldman Sucks (sic) – because that is what it and it’s alumni do – they suck value and hope out of everything.
And to help matters we have high quality TV journalism muddying the waters. Take for example Krishnan Guru Murphy last night talking to a Labour shadow minister Debbie Abrahams about the ‘Bodge -it’ (sic) reminding viewers that ‘Labour likes paying out benefits’.
Really? I nearly dived into the telly to ring his neck. He needs to go back to BBC Youth TV in my opinion. Awful. Grow up Krishnan – you oaf!
How can we truly see what is going on when journalism too often wants to join in in giving its opinion rather than revealing the facts and letting them speak for themselves?
This country is becoming increasingly FUBAR.
I had to look that one up….
Try the acronym ‘SNAFU’ as well – also perfectly fitting given our current situation.
Pilgrim’s probably right about their wanting to be rid of many of us…. near where I live is Hampton Court. There are herds deer in the grounds. The ‘Fenton’ video was shot a few hundred yards away in Bushy Park. I often used to walk through the park, Home Park, to get to work in Kingston on the other side. This was back when we were allowed free access; there’s a stiff fee for entry now. The walk was occasionally magical; there’d be a foot or two of mist on the early morning ground and every so often there’d be antlers poking proud of it. Wonderful, like being back in an earlier era. The numbers have to be kept down though, because if they were allowed to breed unhindered, in the absence of natural predators (no wolves in Surrey now) , they’d be outgrowing the park and spilling out into the surrounding areas, which are ours. We don’t want that, so the deer are culled, the weak and any disabled being the first targets I understand, and at such times there’s a brisk local trade in venison. It’s not hard to envision Tory landowners having the same concerns about the common herd, us, and while we can’t openly be culled, there can be no doubt of the existence of policies dedicated to removing life support from the poor, starting, as is clearly demonstrable via the so-called ‘welfare reforms’, with the weak and the disabled. So, yes, I can agree with Pilgrim.
How quickly we forget that just 18 months ago, before the Brexit vote, UK had the fastest growing economy in Europe.
Now Carney seems to have even forgotten his own observation that inflation driven by currency falls takes 2-3 years to work its way through the economy, so what we are seeing is definitely not overheating economic growth. The BOE decision smacks of a dangerous collective group-think that wants to believe Westminster propaganda (Conservative and Labour) about a Brexit success story.
If the real trigger for the interest rate rise was the rapid and alarming growth in unsecured household debt, then a 0.25% rise will have done nothing to impact on borrowers who are already paying rip-off rates from pay-day-loan and credit card companies. Instead the government needs to really understand why households are being driven to despair by the squeeze between rising prices and flat incomes.
In the end what did for the Titanic was not the ice-burg. It was the collective hubris of the owners, managers and captain who all genuinely believed they had created the greatest ship in the World, and never allowed themselves for one moment to question whether it was unsinkable.
We were only growing because things had been so dire
Since when has GDP growth of 1.5% a year been an economy tanking?
When compared to what it has been historically
The ‘junk bond’ market is looking shaky apparently and slipped below the 200 day moving average. Some commentators believe this is a significant move.
Added to that Venezuela defaulting and renegotiating its debts and maybe we’re seeing some cracks appear. These things cause ripples in a closed loop global system.
Hammond is pretending the problem in the UK is to do with ‘productivity’ because this by implication puts the blame onto a lazy workforce. His retraining and industrial incentive package pretends to do something about it without being sufficient to make any real difference at all. Private capital is supposed to do all that, but private capital is all being squirreled by the so-called entrepreneurs who will only put up money if it is government guaranteed. Hammond is guaranteeing nobody anything.
Except more of the same until it gets worse.
Yes, they’ve been culling for a long time now. “120,000 excess NHS deaths” and the thousands killed off by sanctions.
It’s hard to believe they are really as inept as their results seem to show. Only someone as skilled as Richard will be able to see who is actually benefitting from this shambles, though.