Economy slowing as growth is revised down: So what?


The BBC is reporting that the UK economy has grown by 2.6 per cent in the last year – less than the 3 per cent originally thought. In the third quarter of 2014 the increase was 0.6 per cent.

“So what?” you’re probably asking. “Isn’t 2.6 per cent enough?” Well, it’s certainly much better than the limbo days of 2011-13 when the economy was in and out of the red and Ed Balls’ claim that it had “flatlined” was literally true.

The lower growth has been attributed to smaller government and business investment than had previously been expected, and higher imports.

There’s nothing to be done about the increase in the balance of payments deficit (that’s the difference between import costs and export takings) to 27 billion – especially if both government and business investment is down; it seems that Britain simply has nothing to sell.

So much for the “nation of shopkeepers” as Napoleon Bonaparte (among others) famously described us!

Perhaps George Osborne has restricted government investment in order to meet his (revised-revised – and probably revised again) deficit reduction target for 2014-15. If so, he’s even more of a short-sighted fool than we all thought because this will cause greater harm in the long run.

And there’s also the impending crash when the property bubble created by Osborne’s artificially-engineered housing boom pops. Help to Buy and Funding for Lending stimulated the economy when the private sector ignored Gideon’s call for help, but won’t go on forever.

But what does all this mean for the average person on the street?

Not much, it turns out.

All this talk of economic improvement may sound good – indeed, it is intended to do so. But it hasn’t translated into any improvement in living standards. They’ve been plummeting ever since the Conservative-led Coalition government took office.

Tories are bad for the nation’s living standards. So are Liberal Democrats.

Household incomes have dropped by a massive £1,600 every year – a huge amount for the poorest to bear and a considerable inconvenience for those of middle incomes as well.

Pay rises have been non-existent or below the level, even of CPI inflation – which doesn’t take into account all the costs that households must bear. That’s why the Tories and Liberal Democrats switched to using it as their main indicator back in 2010.

Where are all the new full-time jobs?

The only people to benefit from any economic upturn have been the corporate bosses and the Conservative Party (thanks to donations from the corporate bosses).

This means that, instead of asking, “So what? Isn’t 2.6 per cent enough?” you would be better-advised to ask:

“So what? When do I get my share?”

The answer is: “Under the Conservatives and Liberal Democrats?


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  1. Jeffrey Davies December 23, 2014 at 3:03 pm - Reply

    i wonder who these companies are atos crapita serco a4e all dipping into that tax pot of others peoples monies yet the plebbs still suffer isnt rather strange they say oh well back to the story telling

  2. hstorm December 23, 2014 at 3:15 pm - Reply

    The only way the next ‘crash’ can be avoided is a really hefty increase in real-terms salaries, pretty well across-the-board. It’s the only way that the surging private debts can be met. I can’t be specific, but my best guess is that the crash will happen late in 2016, barring some serious Government intervention on minimum wages.

    Tories of course insist on NO intervention by Government, so don’t expect anything from them. So don’t vote for them either.

  3. Robert Fillies December 23, 2014 at 4:17 pm - Reply

    Well said hstorm, definitely do not vote for this bunch of hypocrites.
    Wishing Mike and family,and all readers of this blog a very happy Christmas and a new year where this lot get the boot.

    • Mike Sivier December 23, 2014 at 4:32 pm - Reply

      Well hoorah to that and extra Christmas pudding all round!
      Thanks very much.

    • hstorm December 24, 2014 at 9:25 am - Reply

      Merry Xmas to you to, Robert, and hopefully, an even merrier, Tory-free election a few months later.

  4. itsalllies994 December 23, 2014 at 11:07 pm - Reply

    Talking of a housing bubble, have you seen the bail in plans which were discussed at the G20 meeting?
    I think it basically means that derivatives would take priority over bank deposits. USA is already passing the legislation at the moment. The kicker is that the derivatives is many times the global GDP. In other words, another wealth transfer.

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