Larry Elliott has reported in The Guardian this afternoon that:
Number crunching by the chartered accountant and political economist Richard Murphy suggests the hit to living standards will be extremely painful: a 14% hit for someone on the minimum wage, 11% for someone on median earnings.
“For half UK households it's very hard to see how they have any chance of making ends meet without significant government support,” Murphy says. “This is not just disastrous for them, it also signals that a recession is very likely unless Sunak takes action now. Delay would make it almost impossible to prevent a massive downturn happening.”
It's hard to disagree with Murphy's conclusion. As things stand, Britain is heading for a monster recession and time is running out to take evasive action.
The data is in yesterday's thread, posted as a blog here.
As Larry concludes in his article:
Sunak announced a package of support for households with their energy bills early last month and that already seems inadequate. The Treasury is, though, resistant to making it more generous until it is clear what will happen to the energy price cap when it is next revisited in October.
That leaves state benefits, which are due to rise by 3.1% next month – about five percentage points below the likely rate of inflation. Raising benefits in line with the expected inflation rate would protect the most vulnerable and boost the economy. It would be costly but not as costly as doing nothing.
As he notes, without this (and I suggest, the measures I also suggest) this could be the worst ever budget (for that is what it will be) since Philip Snowden cut benefits in the 1930s during the Great Depression. Churchill taking us back onto the gold standard in the 1920s would have to also be in the running for comparable catastrophic errors.
I await to see what happens - but suspect very strongly that I will have few good things to say come 1.30pm on Wednesday when I'll be discussing this on BBC Radio 2 with Jeremy Vine.
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Must confess that what with Brexit, pandemic, war etc I have lost the plot considerably. Stopped watching/listening to news – it impacts rather less if I simply read headlines online ( I live alone, nobody to talk things down a bit ). I got my council tax statement last week and see something called Cost of Living award of £150. Eh? Is this just Scotland? Just pensioners? Everybody in UK? My final monthly payments ( which in Scotland include water ) are now lower each month than last year. Hurrah! I’ll take it wherever it comes from.
That is the energy price increase discount.
It will not come close to covering your increase in energy costs
I get that where you say grinning you mean running but what do you mean when you say ‘worst be budget’ please? Overall though I agree, assuming I’ve understood you correctly 🙂
Apologies
Too much haste
Now edited
So pleased Larry has name dropped you.
Good! I’m tired of the Guardian sitting on the fence when it comes to these matters (mind you, they still let Nick Cohen goad the Left – settling differences would be better than settling scores).
I dread recession but also accept that it may be a necessary evil for the Tories to make hash of it in order to removed.
Mind you – with what?
Talking of losing the plot, Rightmove report today that the average price of a UK house is now £350,000. Good luck in keeping it warm next winter.
https://www.theguardian.com/business/2022/mar/21/average-house-price-in-great-britain-exceeds-350000-for-first-time
Brexit, Covid, Putin’s war, just wondering when the forth horseman of the apocalypse is going to turn up. In Tory land everything is deemed fine as long as house prices are still going up. The madness of King Boris.
Has the world gone mad?
Yes
We have imposed upon us a culture which, generation after generation, promotes the connected and the wealthy over the competent and able. Collapse is inevitable, and here we are.