As the ONS has reported this morning UK retail sales have fallen for the fifth month in a row this morning:
I have five thoughts.
First people are already locking down again. They realise Covid is still a threat even if the government does not. This is most commonly true amongst the more elderly who buy the high ticket items that are apparently driving the decline. People know that we are in for a torrid time.
Second, people think we are heading for recession as both Danny Blanchflower and I do. They can sense it way before the government does. This observation is the 'economics of walking about' at work. As a result of their concern they are saving again, or not spending the increase in wealth they had during the Covid period.
Third, there is then no need for austerity measures from the government - the economy is already heading for a recession.
Fourth, in that case there is also no reason for an interest rate increase: the heat is already going out of the economy, and matters can only be made worse by an interest rate rise.
Fifth, we need a green stimulus in the budget in that case. I stress, not a consumer stimulus, but investment in a Green New Deal to create the jobs and long term prosperity we need because the economy as it stands now is not going to provide that.
Will the government join the evidence up in that way? I very much doubt it. It will not suit their anti-the ordinary people of the UK agenda to do so. But that is what we need.
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Hi Richard
I think it is also quite plausible that many are not spending on big ticket items because they cannot get what they want ( eg electric vehicles) or perceive them to be temporarily over-priced due to supply chain issues. To be clear, I don’t think you are wrong- this would just be an additional contributing factor.
Maybe
But that is another good reason why we need take no nation ion inflation
Absolutely. You can’t have it “both ways” – if retail sales are due to supply side issues then what on earth will an interest rate rise do? Merely kill off some businesses and make life miserable for many people.
Agreed
We do not live for ourselves alone; rather, we are responsible for everything that those who lived before us have left behind, and we are responsible for that which we shall one day leave behind to those who must come after us. But now, standing in the wreckage of the keynesian theory of economics. The new generation has to expect much, much less of any heritage we would wish them to have.
Less, because the government will be taking more. Less, because to actually have a job and work will be a privilege and not a right, it is now an item that must be bought through the system of “licences”. Less, because the new norm will be that of not be able to save anything, because you need every penny just to scrape through and pay your ever ballooning utility bills and put food on the table. For millions, never enough to do even that.
For the rest, the bludgeon of the DWP a.k.a the jobcentre who’s role has changed from actually finding you a job to incessantly goading you until you do their job for them and you find yourself a job under constant threat of the “sanction”.
Britain values wealth and education, not your wealth and education, their wealth and education, and for those above the glass ceiling the future looks as rosy as it ever has. Yours doesn’t look too good at all.
For years we have borne a heavy burden called “austerity”. After a period of modest prosperity, need and poverty have again come upon us. Despite industriousness and the will to work, despite drive, wide knowledge and the best of intentions, millions of us are trying in vain to earn our daily bread. the economy is desolated, finances are shattered, millions are without work and left only with the hollow illusion and forlorn hope that they will be able to work at some indefinite time in the hazy future. The world knows only the deceptive outer appearance of our cities; it does not see the wretchedness and the misery inflicted by “austerity”, I do not see, nor do I know of, any “austerity” in the incomes of the “haves”.
I would like £300-00 a day to simply to lounge on a comfy leather well upholstered bench, my only task to utter the customary “yar yar” response to the meaningless ramblings of those other cabbage heads and mugwumps so privileged, and then trundle off to a subsidised lunch. Apparently these hard pressed heros have now decided this meagre sum should be increased while the workers should fund this with more cuts to their already cut to the bone incomes.
This is Parliament.
Where every crisis is viewed as an easily detachable burden easily shifted onto the shoulders of the public.
Where If they want anything from us then we’re the free and sovereign people, making our will known through our elected representatives. But, if we want anything from them then we’re just rabble. That’s democracy, sorry “Austerity”.
The worst thing is the conscious and deliberate destruction of belief in the fairness of the British system by government of one’s own strength, the disgracing of our traditions, and thus the annihilation of the basic principles of a firm trust in these things. Our trust in the system has been shattered by crises without end, each of which brings forth both more “cuts”, more financial misery and ruin with the worker at the sharp end every time. While those who actually produce the wealth are in this condition has nobody actually realised that the end result is that the economy as a whole must inevitability drift into ruin likewise?
Debt. The modern substitute for the whips and chains of the overseers. We are no more free now than the serf of the middle ages tied to his land and hovel by the lord of the manor and forced to give up a portion of his hard earned produce to continue his existence. A mortgage, which incidentally translates as “Dead Hand” ties you to debt for the bulk of your working life and if anything goes wrong, out you go with nothing to show whatsoever for the money and hard work you put into it.
The property goes to auction for the lowest price and you are liable for any shortfall in monies owing to the mortgager. many thousands are in this trap with no help from any quarter. The money lenders, which is what the mortagers are are in a win win situation. The mortagagees will always be in a lose lose situation.
And your suggestion is?
My answer is deregulation in the most congested areas of unemployment….Make again flexible that has been made inflexible by red tape and bumbilism, e.g. £3000 per annum to remain a plumber, a special “licence” to even work on cold water supplies.
With regard to the very recent furore re: shortage of nursing staff. Perhaps I could point out the the correct position, in which there is absolutely no shortage of excellent trained nurses in the U.K., but rather a shortage of these in the NHS. There was ever any shortage of nurses until the UKCC got their claws into it and created the catch 22 situation we are stuck with now.
If you do not have a UKCC pin number which enables you to work within the NHS, you cannot do so, and you do not have a UKCC pin number unless you work within the NHS. We have thousands of trained nurses in the U.K. without a UKCC pin number for one reason or another who could be recalled if it were not for this ludicrous system of over regulation and red tape which has, like the HGV driver situation, resulting in stasis…Nobody can do anything for regulations and red tape.
We have now, in the medical professions such examples as trained theatre nurses with five years experience who are forced to take time off for pregnancy, illness etc. having their pin number taken from them and having to both re-qualify and do a years penance in geriatric wards as a result.
The NHS can recall and invite to return to work some thousands of already resident and trained nurses if you can break the stranglehold the UKCC has here. These robots will at once respond with the old cry “Pro Bono Publico”, “their training is not up to date”!! (This is the Cerberus of CPD, introduced by them so you may spend your sparse leisure time studying what you already know to get enough brownie points to continue your employment). Any nurse will tell you that 80% and very often more of their work is routine..suctioning, dressings, the stat cart etc. This would surely release those better trained for that work for which they are needed. This would help the unemployed and the NHS. We are able to employ just about anyone to administer covid injections en masse. On the ward a senior nurse has to be called to administer injections.
How about that glaring discrepancy UKCC?
There is no doubt, even to the most casual observer that over regulation and red tape have, and are, bringing and have brought many occupations and professions to a complete standstill. Too many people wagging their fingers and nobody actually able to do anything, or bluntly put….Too many chiefs and NO indians!
Deregulate for God sake and get those who cannot now afford the “licence” to continue what they have been doing safely for years without this millstone around their necks and big brother peering over their shoulder to make sure that they get their “whack”.
I have heard all the government responses to every crisis as it appears for many years and by many governments. Whatever the crisis and whatever the official response may be, this can always be properly translated as:
It’s a crisis. so it’s just bread today boys….Jam tomorrow!
The jam, to this day, always infrequently appears for very short periods and so quickly back to just the bread, in other words. Tomorrow never comes, we have never done, nor is it humanly possible in official eyes to do enough to deserve any jam. We just get a fleeting glance at it, I note however, that the well off and particularly whatever government we happen to have, always seem to have a plentiful supply of jam well stashed away and they accumulated it by not letting you have any.
Lastly, my own district council has, at its disposal, over fifty licences they are able to issue (for a hefty fee of course). Really over fifty extra taxes on employment.
We are now virtually in stasis employment wise. You cannot obtain employment because you are unable even to survive on the pay and you cannot afford (in many cases) the vast and extortionate licence fees to get a viable (liveable wage) job by an administration who appear prima facie, to all be the direct descendants of Corsican Bandits.
Ah….let’s work without regulation and let’s have people abused as a result
Please do not call again
I expect plenty of distraction pieces in the so-called news – e.g. the Queen, ‘celebrity not news’ items – to attempt to steer attention away from all of this. Anything approaching reality will be ignored or glossed over so as to make it appear that all in the garden is rosy.
Craig
One month might be a blip – 5 months of declines can’t be explained away with boosterism.
Sectoral break-down is interesting. There are small positive gains from fuel and food – things that have to be bought come what may. Rising fuel could indicate an improving economy but this maybe just be a result of “keeping a full tank” in the face of the shortage…. and this will unwind. Food? Who knows.
It is the larger declines in discretionary items that is more significant. The declines in non-food store sales AND a decline in online sales tells the real story, I think.
Add fifth, the prospect of a trade war with our major trading partner. I have been busy war gaming this with the 28 companies I advise. The impact on their UK operations is severe, but it is immediately affecting capital expenditure decisions. Should they invest in EU or UK? The sensible contingency plan is to invest in the EU, and this is the so far universal decision.
I made that decision in 2017
Came across this article on another blog I follow. Interesting stuff about the energy inputs/outputs of oil extraction. Not something I had ever thought of before.
https://bylinetimes.com/2021/10/20/oil-system-collapsing-so-fast-it-may-derail-renewables-warn-french-government-scientists/?fbclid=IwAR2goAznTKO2mMUB14v739HLoYK4c7fsTut6CW_kfVDISeRhdAKfy8FLafY