This is an FT headline this morning:
The only real comment to make about this is, why did anyone expect anything else?
With a government that is promising austerity whilst persistently siding with business against the consumer's best interests, it is wholly rational for consumer confidence to be falling. The arrival of Trump and his obvious reign of tyranny in the White House is only going to make things worse.
My confidence is falling.
Why would anyone's be doing otherwise?
When the government, the Treasury, the Bank of England and businesses are aligned against the people of the UK, they will realise what is happening.
It's now getting hard to see a way for Rachel Reeves and Labour to get out of this mess.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Might it be that Rachel Reeves and Labour have no wish/intention to get out of this mess?
Might it be that the current Labour,”economic” policies are pleasing the very wealthy, those with considerable power and those who support them?
Might such have any connection with large, apparently unlimited, donations?
Might such policies have any connection with post-parliamentary careers?
If so, might “our” country be a plutocracy with democratic trappings?
Might we have a government unable or unwilling to deviate from rigid adherence to fundamental Neoliberalism, including its narrowness of vision?
If so, might “our” country be an obsessivocracy with democratic trappings?
Thank you and well said, both.
I think it’s no accident that US firms, not just asset strippers, are being favoured. They are the ones more likely to provide golden parachutes for the Labour politicians ousted in 2029. That’s been the case for years. It’s also why Labour is not interested in a rapprochement with the EU.
As the economy degrades due to the Chancellor’s missteps she appears to recalibrate and announces more policies. Unfortunately almost every policy she announces makes matters worse. She does, indeed, seem to be in a doom spiral. The only way out appears for her, or her and the Prime Minister to go. The only question in my mind is how long will this take and how much damage and pain will be inflicted in the mean time.
One is driven to ask, are they mad or bad?
I don’t think that has to be an exclusive OR, so has three possible answers, Y.N, N.Y, Y.Y
Apologies to true experts in Logic if I could my Boolean symbols wrong, it was only one maths lesson in school and I’m retired for almost a decade now!
I think its mainly a “stupid spiral” (a moronically low understanding of government finances) that drives them.
Though there’s serious madness/badness too. How else to explain their hugely unpopular support of a genocide, gutting of the environment etc.
Why should WE spend,
when SHE won’t?
Precisely
Not recognising why governments nearly always run a deficit and why tells you all you need to know why this Starmer led government consists of yet another bunch of politician wallies stretching back decades in this benighted country!
Precisely: “the paradox of thrift”.
What do our “leaders” actually learn when they study, wherever…?!
The headline economic indicators all display a considerable lag. I live in an area that has a lot of tourists and well-to-do weekenders but even here it has been noticeable since the autumn that local retail outlets are carrying less than their normal levels of stock. When one asks the staff how business is going the word “quiet” soon features in the conversation. If a locality such as this is showing a lack of inclination to spend, it tells you all you need to know.
Thanks
The scuttlebutt from local SMEs is that things are very quiet. Many are clinging on with their fingernails (those that haven’t been bitten to the quick). Unusually high levels of sickness haven’t helped either. I’m sure that increasing VAT arrears will be telling HMRC how bad things are. If the Government isn’t panicking, it should be. Sadly, John Van Reenen is no Keynesian visionary.
Thank you, Kim.
My employer is closing its UK asset based finance and SME banking arm, closing offices in Manchester and Brighton, and laying off about 100 staff, a quarter of the UK team.
I hear the black horse plans to make a thousand or so redundant in the provinces, largely focused on SMEs, soon.
As well as getting the banks to adopt policies that help growth, they could be a lot more serious about the support offered to businesses.
For example, in the last Innovate UK Smart Grants round, there was only £25m of grant funding available. Of 2134 companies applying for grant funding, each spending weeks preparing detailed applications, just 44 companies were funded. That’s barely more than 2% of applications.
An application could score above 80% on their scoring criteria and miss out on funding because the pot was so small, and this represents one of the main tech funding grant schemes in the UK and covered a 4 month period.
If the government is serious about creating growth, then it needs to urgently review what other countries are doing (e.g. to build new AI capabilities) and compare it to how little it’s doing, and perhaps review schemes like this less on the basis of an excessively limited pond and instead on the basis of funding companies where its evaluation says the net return to the government from the investment is expected to be positive.
https://www.theguardian.com/politics/2025/jan/25/no-more-reviews-reeves-impatient-pace-change-quest-growth
Passing over the fact that it took THREE senior Guardian “journalists/editors” to write this article (productivity falling at the Grauniad?), a picture came into my mind as I read this phrase from “a source” – “let’s put the foot to the pedal” – Rachel Reeves sat in a (petrol driven) car, pushing the pedal to the metal, shouting “Brrrm! Brrrm!” while looking at the rev counter, showing “0.0£pm”, possibly with Andrew Bailey leaning out the back window drilling holes in the fuel tank. We could possibly add a traffic warden saying “you can’t park here madam, your time is up”.
(Alternatively, put her in an aeroplane at Heathrow, facing a grass verge but that’s a more complex picture capable of too much misinterpretation)
As a serious piece of informative journalism or even commentary, the article fails utterly (like Reeves). It’s pointless drivel, mood music at best.
I took some comfort that it linked growth and potholes though. No actual detail of course.
EVERYTHING in the article sought to blame everyone EXCEPT the Chancellor. And “money”didn’t get a look-in. Not once. NOT ONCE!