Osborne’s portrayal of the British economy as having “the fastest rate of recovery of any advanced nation in the world”, which he again repeated yesterday, is sheer poppycock. He continues to boast that GDP growth can be expected to average some 2.5% per annum over the period ahead, but on every key economic indicator that is wildly optimistic, not least when the latest quarterly growth figure was just 0.3%. There are several good reasons to believe Osborne is blowing into the wind. Continue reading
Tagged with Recovery
Fake US & British recoveries are damaging the global economy
Official economic opinion from the IMF is that the US and the British are the only industrialised economies that are growing strongly and that their growth model should be reproduced generally. The reality is very different. Both recoveries are the weakest on record and are fuelled by an unsustainable (debt-fuelled) rise in consumption. The international effects of this are negative, acting to provoke further instability in the world economy. The Anglo-Saxon recoveries cannot possibly be widely copied without deepening crises. Continue reading
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When will Labour start whacking Tories over their economic policy failures?
The Tories’ first election poster depicts a road wending its way through the countryside till far in the distance, with the motif below: continue with the Tory-led recovery of the economy which the Labour party wrecked. It’s a theme which will be repeated endlessly up till the election which Labour, astonishingly, has made no attempt to refute – astonishing when it’s not only damaging but completely untrue. Labour has so far confined its presentation of economic policy to demonstrating at great length that whilst the Tories have been offering £7bn unfunded giveaways, Labour is scrupulously sticking to its pledge that it will only promise expenditure that is fully funded. That may well impress the right-wing Tory media (no that they’ll ever give us any credit for it!), but it’s a self-imposed ordinance that will not persuade many voters in the Labour heartlands who feel fed-up and abandoned to turn out against UKIP. Continue reading
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Osborne’s own policies shrink tax revenues, yet he cuts more to compensate
There are now unmistakeable signs that Osborne’s so-called economic recovery is fading, despite all the right-wing think tanks and pro-Tory media to talk it up. A survey of 7,000 businesses by the British Chambers of Commerce has just found that manufacturers have suffered a sharp slowdown in export orders, and even more significantly domestic sales and orders – the part of manufacturing that has been faring better due to household expenditure based on rising debt – are now also reported to be slowing. The third quarter growth figures also show the UK economy losing steam, down from ).9% in the second quarter to 0.7%.
The TUC has just reported that not since 1865-7 has there been a comparable squeeze on earnings for British workers, with an 8% fall in real earnings between 2007-14, and the fall is still continuing with the latest figures this year showing annual wage growth of 0.7% against inflation at 1.5%, i.e. a further real wage fall of 0.8%. There is then a serious knock-on adverse effect in a reduced tax take for the government which is actually this year increasing the deficit (from the current £100bn to around £105bn) when Osborne’s whole object is ostensibly above all else to cut the deficit. His austerity programme is now beginning to eat itself. Continue reading
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The recovery’s fading: so what should be the policy now?
The evidence that Osborne’s so-called recovery is fading is now too strong to ignore.The latest evidence released by the IPPR think-tank finds that two-fifths of all new jobs since 2010 have been self-employment, oten at a pittance income – indeed the figures show that self-employment incomes have fallen by an average £2,000 since May 2010, a 14% drop even larger than the big 9% fall in regular employment over the same period. This is crucial for this reason. There are four, and only four, mechanisms that can drive demand and thence growth.
One is wages, including self-employment, and they are still falling; indeed the 3-monthly average for weekly earnings is now nearly 2% behind inflation. The second crucial factor is business investment and that is still lagging 10% behind the pre-2008 level because private investors are on strike – they don’t believe this recovery will be sustained. The third is net exports, the excess of exports over imports which now for traded goods is an unprecedented and disastrous negative: this year UK imports are likely to exceed UK manufactured exports by a staggering £115bn. And the fourth is government expenditure which Osborne’s continued obsession with austerity has thrown into reverse at least till 2020. Continue reading
