Last week the Guardian noted that Rish Sunak was clearly wishing to deliver an austerity budget. As they noted this was a choice:
Something has to give: either our already austerity-hit public services, or Mr Sunak's budget plans. For the sake of the country, the chancellor should revise his plans. For the sake of his government, Mr Johnson may end up forcing him to do so.
On Friday the FT reported that he had asked the supposedly independent Office for Budget Responsibility to use out of date data to support their budget projections, which would help him achieve this goal. The desire that dogma win over reality is very clearly overwhelming.
This morning we get more evidence that dogma rules. The Governor of the Bank of England has, according to the Guardian and many others, said that the Bank must be willing to do something about inflation, which might hit 4% by Christmas. This is despite the fact that he admitted:
Monetary policy cannot solve supply-side problems – but it will have to act and must do so if we see a risk, particularly to medium-term inflation and to medium-term inflation expectations.
In other words, there is nothing that the Bank can do to stop the inflation that is going to happen, but it thinks it must do something anyway in case people think inflation might continue - although there is no evidence that anyone does.
So a dogmatic increase in interest rates is required to cut the supposed scope for government spending and to impose a bigger cost of living crisis on ordinary people.
I have already noted this morning that we are living in a Covid crisis made by our politicians.
We know we live in a supply chain crisis exacerbated by the political choices of those same people imposed as a result of the hard Brexit we never needed.
And now the government are intent on creating an economic crisis for millions even though none is required.
Please don't ask me to not be angry about that. I am and I will be, because none of this is necessary.
And what also annoys me is just how hopeless Labour still is at saying anything about this. And that's also very annoying, to put it mildly.
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Spot on, crystal clear and anger inducing in the extreme, even more so now it seems utterly inevitable. I should be saying that you are an idiot for saying that the only opposition is Johnson (possibly), but it seems only this ghastly man’s crude sense of political survival provides some shred of hope.
As for the Labour Party, those outside it are largely unaware of its own totally preoccupying civil war. There is a nationwide purge of the left, mass expulsions entirely without due process and imposition of outsiders as candidates on local parties. A whole series of topics are not permitted areas of discussion by local parties including, would you believe, motions of no confidence in Starmer! Members of Jewish Voice for Labour are being expelled for anti-semitism because they condemn Israeli foreign policy, especially in Gaza. At the recent annual conference, among many examples of corruption by the Party hierarchy, certain left wing unions were prevented from voting on crucial resolutions. These are factual matters that can be checked by anyone that wishes.
This Stalinist management of the Labour Party is highly relevant, because it explains that the lack of policy, the lack of opposition and the appearance in the shadow cabinet of economic illiterates like Reeves is not merely the product of an ineffectual ninny at the helm. Indeed, the former DPP, with his official badge of approval, is absolutely NOT a ninny. He is, of course, AS A LEADER OF THE OPPOSITION, but that is not why he is there. You do not need oratorial skills to wield a hatchet, simply a focus on ensuring there will never be another Corbyn and that any challenge to the Tories will not come from the Labour left.
Until Starmer is replaced by someone who behaves like an Opposition leader. Sunak’s only opposition is the ideological flabbiness of Johnson. UK politics is currently in dire straights and we will all (elite excepting) suffer mightily over at least the next decade.
Oh for some democratic socialists in the democratic socialist party!
Not really too much to ask – but it seems that they are no longer welcome by the present leadership.
Danny Blanchflower gave a brilliant interview this morning on the BBC Radio 4 Today programme this morning where he explained that the US was heading for recession and the UK was bound to follow and the folly of the Bank of England to increase interest rates which would be counterproductive. Nick Robinson was unable to bully him into changing his mind as he tries to do with other interviewees who do not toe the establishment line.
A finger also needs to be pointed at that most regressive institutions of our political establishment the Treasury and the ‘Treasury view’. Sunak has made himself a creature of the Treasury which is entirely consistent with his background in finance. It is well known that there is a revolving door between the Treasury and the city. As has been said it is indicative of the parlous state of our politics that the only countervailing force is Johnson’s own self interest to exercise his power of veto over Sunaks status. But who would he replace him with? Where is the current Ken Clarke of the Conservative party? Assuming such a person exists would Johnson have the sense to appoint him or is he too much a captive of the looney right that he has courted so vociferously? We are heading into a full scale crisis.
As much as I think that Starmer is a great wet lettuce, Reeve has for me taken on a demonic-like character looming over Labour’s response to fiscal management.
My partner is one of those who accepts that in order to get into power, Labour has to appeal to Tory voters. I don’t.
The sad fact is that, all we’d be getting is a kinder interlude of Tory rule with no fundamental change. Labour just becomes another holding and enabling Government for next period of Tory rule.
Before BREXIT we had another pressure on supply chains which was HS2. HS2 was sucking up resources out of a country that was ill prepared for such a big project because of austerity. And HS2 – an ill conceived project of all ill-conceived projects – is still is doing that.
All interest rate rise will do is increase the wealth of the rentier economy. I’m not surprised if they go up.
Who do you think really runs the country now?
Why the back seat funders and drivers of the Johnson’s Tory party of course – that’s who.
I don’t pretend to understand financial markets, but people say pricing is based on expectation of the future as much as actual current data. It is something that clearly happened after the Brexit Referendum when the foreign exchage markets devalued the British pound in anticipation of what leaving the EU would in due course do to our economic prosperity – there wasn’t an actual overnight change in balance sheets.
I point that out simply because it seems to me a possibility that the Bank of England judges there to be a beneficial effect in sending a message it is monitoring the situation and is prepared to act, to the extent that it might actually help them avoid having to take significant action. My guess is they are not remotely contemplating the sort of substantial increase in interest rates that would be needed to have any direct effect on inflation.
But what do I know? (You don’t have to answer that).