This was reported by The Guardian yesterday:
Business activity across the UK private sector declined in the last three months, a survey has found, as weak consumer spending hits companies.
The latest growth indicator produced by the Confederation of British Industry (CBI) shows that UK private sector activity fell again in the three months to February, at a faster rate than in the quarter to January.
In a worrying sign, private sector firms also expect another fall in activity over the next three months, as the economy struggles.
There should be no surprise about this.
The fallout from Labour's disastrous start in government is continuing.
In November, the election of Trump rocked real people who could all too easily see what might come, yet even if our politicians could not do so.
Continuing high interest rates are still hitting households.
Public services are very clearly not improving.
In the face of all this instability, people save if they can, and that is what is happening, without a doubt.
Starmer could argue that this creates the capacity to make armaments, but the reality is that there is almost no logic to his claim that armaments spending will boost growth: the evidence does not support that on the scale he is talking about.
It is wise in that case to note that what is really happening is that Labour's strategy is falling apart all around them. We need to remember that when thinking about anything else they are planning to do.
We also need to remember that famous quote attributed to
When the facts change, I change my mind - what do you do, sir?
When will Labour do so? It is their only chance.
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It looks like trying to shift around 2% of the economy from the private to the public sector is causing quite a large disruption. As Julian Jessop has said, given the productivity difference between the two, it’s not a surprise. Real people, mainly young, are getting fewer opportunities. Big foreign companies like Equinor are
Very politely, that is total and utter nonsense, as are most things Julian Jessop says.
I will be addressing this issue in a video tomorrow. I suggest you show it to your far-right friends.
I’m a bit confused by your post Mr Planning. Equinor is a very well run, efficient company. You imply that private good, public bad, in terms of efficiency. But Equinor is state owned and well run. Thames Water is private and….well I’ll pass over the rest in silence. I could pick half a dozen other examples of private basket cases. But I’m happy to be proved wrong.
Only the dimmest of ideologues continue to believe the fiction that the private sector is inherently more efficient. I’ve worked in both sectors and it’s entirely dependent on what’s being done and by whom. The farce that were the private security arrangements at the 2012 London Olympics when the army had to step in should have illustrated that for you. Or when the government had to step in to save the banks.
See today’s video
Oh right!
So they have an economic strategy?
I hadn’t realised to be honest.
🙂
Thank you, Richard.
With regard to defence spending, before last week’s Zelensky meeting in Washington, the Treasury and MoD were considering having all pilot training conducted in the US. Much of the training already is. That implied future aircraft purchases would be from the US. That meeting has disrupted this plan, but it has not gone away. Triangulation, post-political life feather nesting and all that.
The cabinet has been reminded of the scale of not just hardware, but software and other support like training and repairs that are provided by the US, not just the gimmick that is Trident*. Strategic autonomy, laudable, though that is, won’t come cheap and quickly. Five decades of neo-liberalism and Atlanticism at the expense of Europe have seen to that.
*Readers may be surprised at the number of military professionals, current and former, who oppose Trident. They are kept off air. Trident is for use against France. By that, I mean it would be embarrassing for Britain’s politicians not to have Trident when the old enemy France has it.
In any case, Starmer was not promoted by interests, including the US MIC, to undermine their profiteering.
Starmer talks pretty but acts stupid 🙁
If Starmer really wants to grow the economy he needs to invest (in the true sense of the word). This requires as an increased deficit. He needs to spend it on health, education and other public services and, yes, defence.
Even if you take the “government is a business” analogy, which is false, what kind of business would not invest when they can get much greater returns than the interest they would pay?
But he’s clearly not going to do that but instead will do stupid things like reducing the aid budget (a kind of anti-investment) in order to balance the budget. A balanced budget is, categorically, not what is needed.
Sadly, like the US, we are headed for stagflation :-(.
https://www.theguardian.com/politics/live/2025/mar/05/rachel-reeves-welfare-budget-spring-statement-pmqs-labour-keir-starmer-kemi-badenoch-news-uk-politics-live
“Shabana Mahmood says welfare budget ‘unsustainable’ amid reports Reeves planning benefit cuts worth billions”
or as translated into TreasurySpeak.
“Captain Starmer-Reeves says Titanic cannot afford to change course”
(Her own department is getting extra money to try more criminal cases, so we can lock more people up at enormous cost)
I do hope Ms Reeves is not expecting charities to pick up the slack because they really ARE running out of money.
Much to agree with
Labour’s economic strategy. I thought this was basically: building more homes and continuing with some level of regulatory change to help the city. Both pursued by the Tories before them. So to me Labour’s economic strategy was more of the same. That said Ed Miliband has talked about Energy Security. Presumably included in the Economic Strategy? Also at PMQs today Badenoch raised the issue of Economic Security. She didn’t explain whether she meant autarky or something else. However I am hearing the phrase Economic Security more often. Starmer in response to Badenoch incidentally confirmed US trade deal talks had restarted. Which I suppose is the opposite of autarky. Richard any thoughts on this?
We have no chance of autarky
A trade deal with the US is impossible without abandoniong the NHS – I doubt it will happen