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Can we worry a bit about the economy please?
Posted by Simon Cooke (@simonmagus)
Friday, 19th February 2010
I don’t know about the rest of you but I’m getting a bit worried. About the economy, I mean not about how many economists can be lined up behind any given position.
Inflation. I know we’re supposed to believe that this will fall back “towards the end of the year” but, after two months of record increases, I’m not so sure. And if we carry on spending money that didn’t exist before we printed it, that old definition of inflation – “too much money chasing too few goods” – has to kick in. Depending on the measure, inflation is somewhere between 2.9% and 4.5% already – expect it to rise further.
Unemployment. We had one good month – not surprisingly the one before Christmas when the claimant count fell (very slightly) - followed by a further substantial increase in the latest figures. Lot’s of carefully worded excuses surround this but the truth is that there’s a rise in long-term unemployment, cyclical unemployment and overall worklessness. Approaching 20% of the working age population are not working.
Borrowing. So we’re well stuck into the Viv Nicholson economic policy – supported today by all those clever economists who are friends of Gordon and Alistair. But shouldn’t we fret just a tad when the tax revenue forecasts set in November are already wrong – to the tune of £7 billion? And running a deficit in January when all the money comes in? A little frisson of concern is may be in order.
I don’t see anything from the Government that is really addressing these worries. We seem to spend our time arguing about the phone bill while the house is being repossessed. And the public have spotted this. They are not impressed – they want some action, a little bit of leadership. Instead, we’re treated to a four month long election campaign where Labour have reduced any serious discussion of our wrecked economy to the macroeconomic equivalent of an argument about petty cash receipts.
