The IMF has issued new growth forecasts for the world. They are better than expected for almost every country, except one, which is the UK:
Even Russie is expected to grow more than the UKL in 2023.
First, let me acknowledge that growth is far from a perfect measure of wellbeing. I am, for example, quite sure that growth in the Russian armaments sector is not any indication of that. So, we should be wary here.
However, that being said, the fact that the UK's situation is such an outlier is worthy of comment. What is going on?
There are essentially four aspects to the UK's failure.
The first is that the way in which we price energy, with massive bias to energy companies at cost to all consumers, is a factor in this. The policy of believing monopolies should be allowed to price as if they are competitive enterprises (albeit, ones not ultimately allowed to fail) is the recession we have got. The government engineered this failure.
Second, unlike the eurozone, we are increasing interest rates by too much and for too long. I personally do not approve of any of the rate rises in the last year, but the price of the Bank of England's absurd desire to appear tough on inflation over which it has precisely no control and which will go away despite anything they have and will do has been enormous, with the worst still to come. The government engineered this failure.
Third, the government has chosen austerity as a response. The right response was more spending, because in a downturn counter-cyclical spending is what is required of governments, but ours is cutting instead. The result is that the recession is being exaggerated by government policy. The government engineered this failure.
Fourth, to compound this the government is imposing pay austerity to break public sector workers and destroy public services when if there is 10% inflation and if there were 10% pay rises then all the money needed to make inflation matching pay rises is automatically available to make them. Instead the government is denying such rises, baking recession, declining disposable incomes and continuing stress in the rest of the economy into the system as a result. The government engineered this failure.
Of course we have recession in that case. The government engineered this failure. Other governments appear to be wiser. We need another government.
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I sometimes wonder if the Tories have a secret agenda which requires the country to be on the point of failure when, out of the blue, this saviour appears and… There are quite a number of example of this which happened in the last century, indeed, right up to the present.
I think also that the British people are so docile that they have let this deterioration occur doing nothing about it (read the first sentence of Will Hutton’s The State we Are in). Instead, they believed the lies and misleading statements that those in power (and I don’t necessarily mean only the politicians) made and continue to make. Other countries seem to react to being misled very strongly, to the point of making the government change its mind or even overturning it. I seem to remember the British did that once about something called the Poll Tax. Not much since.
Good post John,
one point though it was the Celtic Scots who were most effective. I live in France and I have spoken with ordinary French people who remember this event very well. The French elite would have liked to have done the same as the Thatcherites in the UK but they know that what the french people have done once they can and will do the same again. In 68 de Gaulle was so frightened that he had himself flown out of Paris to a French army base in Germany.
You are right, the ordinary people in the UK are far too passive, the Peasants Revolt, the Levellers, they all lost because in their heads they simply couldn’t take the next step. The Nasty party knows this only too well – so it goes.
“I sometimes wonder if the Tories have a secret agenda which requires the country to be on the point of failure”
The agenda is to make public services fail, and to step in to privatise them. Private public initiatives (PFIs) have been running for 20 years and are very good .. if you are an owner or shareholder. They are very bad for the public. It is estimated that they have siphoned £250-billion from the public sector into private hands. The results we can see today, the evidence demonstrates that they do not work. Public sector workers still get the blame, for not working harder, saving more money, etc.
See for example: Private Finance Initiative: hospitals will bring taxpayers 60 years of pain
https://www.telegraph.co.uk/news/politics/8279974/Private-Finance-Initiative-hospitals-will-bring-taxpayers-60-years-of-pain.html
Read: How to Dismantle the NHS in 10 Easy Steps (second edition)
https://www.amazon.co.uk/How-Dismantle-Easy-Steps-second/dp/1789041783
I agree that the NHS is being privatised by stealth. But as the country’s public sector is
being run dow, so is the private sector. Look at the railways, the steel industry, agriculture, fisheries, etc. Need I go on. It’s painful enough as it is.
If people don’t have money to spend, the economy contracts.
It’s pure Fascism plain and simple – to create crises or a threat and then manufacture an excuse to get rid of something.
Our only hope is that the Tories may have come cropper on the NHS.