The latest forecast from the IMF on UK growth is supposed to give some encouragement to the markets – but should it? They have issued the latest figures which predict growth of 2.4% in this next year. One might well ask what the hell do they know anyway – their forecasts have been widely and repeatedly wrong in the past! Three months ago they said 1.9% growth and even warned Osborne of ‘playing with fire’!
While one doesn’t want to pour cold water on potential good news or even rubbish the hope that things will get better soon, it is nevertheless sickening to see the smirk of self satisfaction on the smug face of Chancellor George Osborne – perhaps it can be wiped-off (hopefully his football team will lose or he gets flooded out).
What is the truth of matters? There is no question that the UK economy is showing some signs of growth. David Cameron & Osborne boast that this is ‘proof’ that their severe austerity programme since the 2010 election (Plan A) was the ‘only’ way – and that those who sought some kind of Plan B were scaremongers and charlatans.
They claim victory in the economic debate – one only wishes that it was simple a ‘debate’ (which they are both of course used to winning or losing at Oxford University), and not REAL life, affecting our country and our citizens. The ‘two arrogant boys’ who show ‘no remorse’ (Nadine Dorries MP Tory quote) continue to live in their own private bubble.
They now openly laugh at Ed Miliband’s & Ed Ball’s wish at the outset for a sustainable deficit reduction plan & warnings that the Plan A would choke-off the existing recovery (the Tories sneered despite the fact that it wasn’t just Labour, but international renowned economists who predicted we were on the path to ruin) – it has taken 3 long years of flat-lining for any recovery to start and THAT is claimed by the Tories to be a success story (some victory that eh?).
Oh yes, the Government say we should take comfort as our economy is now rated as the ‘fastest growing’ of any equivalent developed country– this is like saying that a baby is growing well compared to an adolescent! Or that a runner is running fastest when actually is 2 laps behind the field.
So we are now out of the woods then? Perhaps NOT.
David & George spend their time in the Commons bragging on about the creation of new jobs and the reduction in the unemployment figures – it proves that Plan A is a gilt-edged bond in their eyes. The truth is that people are going into any low paid part-time jobs, jobs on zero hour contracts, or even fulltime jobs on the Minimum Wage – these so called jobs do NOT pay a ‘living wage’, so the families involved are then still dependant on benefits to survive – so the cost of welfare & social security spending has increased dramatically over the past 3 years, with a consequential massive overspend by the Government. Good Plan A not.
Well then, what about family incomes & living standards – are they going up? NO. Well how the heck are we seeing signs of growth? Simple – people are spending money; money they have not got; money they can borrow! The Conservative led Government have been pushing the Banks to lend money, and they ARE! But not to businesses to promote ‘real’ growth, but to individuals to squander (that is not sustainable so how long before that bubble bursts?).
Is the growth as a result of manufacturing and exports – because that is real recovery? Not really, and don’t hold your breath on that one either – sluggish is the best description.
Guess what is helping the growth figures we are seeing? Rapid escalation of house prices of course– up seven or eight and a half percent across the UK in the last year! So have houses suddenly been visited by the fairies and elves who have worked tirelessly on them every night while their owners sleep, steadily increasing their inherent value? Perhaps not. [House prices are predicted to increase this year on the same path].
What caused the previous crash – this wasn’t actually a UK crash (as claimed by the Tories), but a global crash affecting America and all other European countries? It was the result of a housing boom, funded by the international Banks, and then the bubble burst throwing the Banks and all our economies into the abyss! So what is funding our latest UK housing boom? The Banks unbelievably – who are lending on the instructions of the Government! It started with giving money to first time buyers to get on the housing market, but now aces are wild – and any Tom, Dick, or Harry (however rich) can be subsidised by the State to buy a bigger or even another house. The Government’s idea was to encourage the building of more homes, but any business person will tell you that you need to create the product before you stimulate demand – otherwise a scare resource simply goes up in value! That is market forces in a free competitive market system we live in.
[Don’t lose any sleep over it all – we are simply passengers in a runaway vehicle; we can’t stop it, but hopefully it will come to a rest before throwing many of us out to die]