The Fed, the ECB and the Bank of England all made the same mistake last year. They carried on printing more money and buying up bonds to keep interest rates around zero for too long. They were right to offer a big stimulus in 2020 to offset the covid inspired downturn, but misjudged the recovery and helped fuel the inflation.They ignored those of us who warned against excessive laxity. They stuck to silly unrealistic forecasts of inflation for this year of around 2% when it was obvious it would rise considerably higher, especially in the USA where the stimulus was largest.
The Bank of England saw sense soonest, stopped money printing at the end of last year and has started to raise rates. The Fed carried on printing until March this year and has only just started to hike and unbelievably the European central bank is planning to print Euro 90 billion more in the second quarter of this year and is putting off tightening to be reviewed again in the third quarter. Spanish inflation is already at an alarming 9.8% and Eurozone inflation generally is over 7%. How much higher do they want it to go?
The UK has to be careful, as it is not only tightening money policy but also increasing taxation at the same time. The danger is this double hit to an economy which has been recovering well from covid lockdowns will prove too severe, slowing the economy too much. The Bank’s tightening means dearer mortgages and credit, squeezing many consumers further as the high energy prices kick in like a big tax rise. That makes the NI rise and the tax increase on energy that comes with higher energy prices an inappropriate added threat to ,jobs and output.
The UK needed a bit of tightening to curb price rises. It does not need to lead world austerity just as the cost of living crisis hits. The government also needs to do more to assist and stimulate more domestic production of everything from fertilisers to gas and from food to microprocessors. To the extent Ā that the inflation stems from a series of supply side shocks, boosting supply can start to right the position.
April 11, 2022
Good morning.
In order for the government to dig us out of the hole it has created, it is to use the double whammy of interest rate rises and taxation despite it getting more in revenue from various price increases such as fuel via VAT.
It is also forcing people to impose personal austerity rather than doing State austerity ie spending cuts. The State is also stealing our money through inflation and high price rises.
Even now I hear stories from people who had a nice pandemic, staying at home being paid to do nothing. Well now itās payback time.
April 11, 2022
+ many
Good Morning Mark.
I agree entirely.
Honestlyā¦you should have seen them round here!
Talk about a good pandemicā¦they had a WONDERFUL one.
We did so enjoy hearing itā¦ceaselesslyā¦24/7 š”
No wonder they keep taking the tests!
April 11, 2022
Inflation the politicians friend. We will be forced to spend any savings we have to live meaning we have nothing to leave our kids.
None of this will affect our rulers as they will continue to award themselves Inflation bustling pay rises.
The young will pay for the government policy of stripping us of any assets.
The great reset continues.
April 11, 2022
+many
Oh yes. Of course!
And the govtās debt gets cheaper to pay back!
And it can keep on borrowing.
And many will be forced to give up their houses cos they canāt afford the bills.
Devious b*st*rds.
April 11, 2022
There is a way to beat that Ian, move into a bigger home joint with the family of one of your children, or downsize into two neighbouring homes. I know people that have done both.
April 11, 2022
JR,
Increasing taxationā¦.. only for some of us. Sunak previously claimed NI increase fair and responsible! Johnson the same. Except his own family right?š or Johnsonās Ā£800 a roll wall paper bought for his abode not treated as a benefit in kind?š I suppose the increased energy costs do not effect MPs claims for the same on expenses?š
Rules for us rules for Tory party and govt. Javid happy to clear his conscience under news of Sunak! Highest taxation in 70 years, worse cost of living since 1950.
April 11, 2022
Exactly – multiple attacks from government – tightening money policy, increasing taxation hugely, increasing energy costs with the net zero religion, devaluing the Ā£, increasing interest rates, forcing very expensive and pointless electric cars and heat pumps onto people, endless more damaging red tape almost every day, absurd tax complexityā¦ All this while the vast state delivers so little of value in public services and pisses Ā£billions down the drain everywhere you looks. They cannot even bring themselves cancel the totally absurd HS2 project!
April 11, 2022
Mark. Correct on the working from home. Nothing is efficient anymore. Many are now working from home on a permanent basis especially those in the public sector like the NHS. They love it. Who wouldn’t? They go on about their heating costs but forget they don’t have the expense of commuting. Cake and eat it?
April 11, 2022
If people are working from home with access to files etc how confidential is that information?
April 12, 2022
@FUS
Using software like TeamViewer, the data is completely confidential. Just as confidential as if you were in the office on the network.
April 11, 2022
J M Keynes reborn though John’s conversion to a State managed private sector doesn’t surprise me in the slightest. His own party’s been gravitating towards a world in which for them at least there is a political solution to all things.
John appears to think a lever can be pulled or pushed to achieve a certain outcome in the wider economy. Why he thinks an economy is akin to a machine of some form I have no idea. These people went to Oxford and Cambridge.
For those who live in the real world this constant political interference in our economic life has become sinister and I believe will get worse when the political class try to impose a digital currency coupled with a social credit element. That really will represent a turning point in human history. Compliance at this point will be removed
April 11, 2022
+1
Is he the one who thought that spending a dollar would make a second appear by magic?
Didnāt work did it?
Government interference, as you imply, has totally stymied us.
And I can think of no upside!
April 11, 2022
Those Dishy Rishi give aways !
Payback time.
Nah. I just think it’s what socialists do. Splooge money and start wars everywhere.
Ukraine is because Western fiat has failed and the West are desperate to keep the dollar ponzi going with some new mug member.
As Yanis Varoufakis said, “Anything but a negotiation in Ukraine is war mongering.”
Boris is now a war monger.
April 11, 2022
No-one can negotiate from a position of extreme weakness.
Ukrainians are neither angels nor saints, but they have the right not to be invaded by any passing dictator, whatever one’s views on the likelihood/benefits of EU or NATO membership. In this particular case, I support the Prime Minister’s actions.
April 11, 2022
Ukraine has rights, but Ukraine’s president also has the duty to behave responsibly in the interests of his citizens. Not to send his army in to bombard thousands of them yet again, as was happening in mid-February, according to the OSCE reporting incidents in the Donbas. He needs to show some responsibility now, and negotiate a settlement before his country is destroyed. For one thing, we in this country can hardly afford to keep sending him arms and other assistance forever – British taxpayers have already sent Ā£450 m., and it might soon start to dawn even on Johnson’s government that we do actually need money to help with our own problems.
April 11, 2022
All they had to do was stay neutral and stop shelling in the Donbas. There is proof that NATO and the US and Britain have been meddling in extreme ways in Ukraine since the fall of the Berlin Wall and particularly since 2014.
April 11, 2022
How can you negotiate anything with Putin from a position of weakness?
April 11, 2022
A peace offer has already been made. The alternative is a long, protracted and bloody war and a wrecked Ukraine.
April 11, 2022
Putin intends the end of Ukraine as a nation.
April 11, 2022
The warmonger is the madman in Moscow. Any part Boris or the west have played is just incidental. Negotiation as far as Putin is concerned means surrender and him imposing his choice of leader in Kyiv.
April 11, 2022
Was not the EU a contributor to the coup which removed the previous pro-Russia Ukranian leader?
Which started the ball rolling.
April 11, 2022
The West have been interfering in Ukraine for 30 years. That is not incidental. And nor is Putin mad.
April 12, 2022
Longer than that-since the end of WWII.Where did the Ukrainian Nazi forces flee to after WWII?
April 11, 2022
Valdimir Putin is emphatically NOT a socialist, and his party are called Russian Conservatives.
However, actions speak louder than words, and we now see exactly what he is.
April 11, 2022
I say the West started this war, NLH. The Biden presidency triggered it after 30 years of provocations from the West (with a short interval under Trump.)
April 11, 2022
Talk about self-hate.
April 11, 2022
Interesting developments in Pakistan(which has recently joined the rapidly de-dollarizing China-Russia-led Shanghai Co-operation Organization)-Imran Khan has just tweeted out film of the most enormous rally in Karachi against his ejection as PM at the weekend in an (allegedly) US-backed plot.Another front opens up!
“Never have such crowds come out so spontaneously and in such numbers in our history,rejecting the imported government led by crooks.”
I haven’t seen it screened by the MSM yet.
April 12, 2022
The BBC wrote, yesterday, Mitchel
“…Tens of thousands of Imran Khan supporters took to the streets on Sunday night after the former Pakistani prime minister called for peaceful protests following his removal from office. The tumultuous political drama looks set to continue – but who do his followers blame for his downfall?
“I think Imran Khan is the only honest guy left,” Nadia Humaiyun, 34, told the BBC. “He’s the only one we can trust and we do not want to be ruled by these traitors.”
Mr Khan has alleged the opposition’s move to hold a vote of no confidence against him was part of a US-led conspiracy, targeting him because of his foreign policy decisions including a recent trip to Moscow that angered Western officials.
Opposition politicians have reacted angrily, accusing Mr Khan of cynically manipulating the public in order to try and remain in power, despite having lost the support of parliament….”
It seems to be fairly general across the more serious MSM.
However, I don’t think that you will see much in the Russian media which reflects opposing sentiment around the world to its grotesque actions, do you?
April 11, 2022
The “economy has been recovering well from lockdown”, but it would appear that is a problem. The targeting of small/medium businesses (enforced closure for months on end) was obviously not enough, too many survived and that is simply not acceptable.
To “build back better” one must first destroy what exists first. And this is why the Johnson regime is continuing its destructive policies. Failing that, they are either evil or insane, Either way, they need to be gone.
April 11, 2022
Straight from the WEF website “To build back better, we must reinvent capitalism. Here’s how”. Why is Johnson regime following the dictats of unaccountable billionaire globalists?
April 11, 2022
This is assuming the government wants to fight inflation.
I am sure they do not want to throw away completely the future votes of the electorate.
However, inflation is useful to usher in the Great Reset. You will own nothing, you will be happy.
The trick is to implement the latter without losing those votes.
Though in Johnsonās case he might plan to go for one term and move on to greater wealth post politics.
April 11, 2022
+1
April 11, 2022
Both Johnson and Sunak will move onto greater wealth post politics after theyāve trashed our way of life. Theyāve both had US Green Cards so thereās the clue.
April 11, 2022
I suspect Boris wants a legacy of ‘saving the world’. He won’t worry about the UK who is expected to be net zero regardless of the cost, and he will throw money at Ukraine and any other country where it will bring Boris some personal gratitude. We in the UK are his cash cows. We enable his largesse to the world, but he is too stupid to see that he is killing the golden goose that funds his personal crusade for worldwide admiration.
April 11, 2022
I am honoured, for my taxes to be used in support of the magnificent resistance that the Ukrainian people are mounting on behalf of all free nations against murderous, criminal tyranny.
If you are religious then I suggest that you pray for their victory.
April 11, 2022
Peter
No, the trick is to get the LibLabCON to agree and implement, ‘Build Back Better’ and ‘Leveling Up’, that way, no matter who you vote for you get the same policies š
April 11, 2022
“You will own nothing, you will be happy.”
No. WE will own nothing. THEY will be happy.
JF
April 11, 2022
Well, if you support the scrapping of the Human Rights Act, which protects the Peaceful Enjoyment of Possessions, then you will make that objective far more easily reached for such as might want it.
April 11, 2022
As ever Government having dumped many of the current problems on us makes us pay to put them right.
I see zero evidence of the public sector contributing through efficiencies/budget reductions. Another sign you are a socialist government.
Like the panicked and not thought through announcement on energy policy I see Civil Service head count reduction being spun heavily.
When I see people actually being made redundant as opposed to natural wastage/not rehiring vacant positions or the usual truck of moving people to a pool, I will believe what I read.
I look forward to your assurances Sir JR.
And in other news I read a proven big hitting industrialists says that our refusal to undertake fracking is based on the views of an uninformed minority. Guess that includes Karteng. Who would have thought it?
April 11, 2022
+Agree
But I must say that when it suits them re Civil Service those in charge ruthlessly dispatch.
The cruelty with which they tear up set in stone employment promises is breath taking.
And how they actually cause harm by policies of undeserved elevation followed by isolation ( which kills) is utterly astounding.
Governments now care nothing for anyone.
Psychopaths?
April 11, 2022
Watch out for Civil Servants being transformed into employees of a Quango. Still Public Sector, but off the CS books. (Worked for Cameron/Osborne/Clegg).
April 11, 2022
Mayor Khan, after getting more money from the government and then increasing the Congestion Charge has, once again, imposed an 8% increase on my Council Tax. This on top of the 4% increase last year and, now, as mentioned here a little while ago, the government is to impose a Social Care Tax on us on top of the same tax the local Council imposes. All this on top of fuel and energy rises which the government gets increased revenue via VAT and Duties. But not once single cut in government spending announced.
Disgusting !
April 11, 2022
Well, the SofS is certainly uninformed. Did you read the carefully worked out and costed energy plan last week?
JF
No, nor did I.
April 11, 2022
You can’t seriously claim to fight inflation when you feverishly encourage real inflation – that is the cost of real property – to go through the roof year after year.
April 11, 2022
NLH. Equity release lifetime mortgages which property owning Boomers are piling into, are dependent on continuing house price inflation. Otherwise, the sale price of the property when you pop your clogs, might not cover the principal and the rolled up compounded, interest. Planning departments, land Barons, builders and mortgage companies; all need to keep the residential housing market permanently just short of hyperinflation, to prevent financial disaster a decade or two from now.
April 11, 2022
There’s one born every moment, yes.
April 11, 2022
And all the time this goes on the government waste will continue.
All the millions the dingy invaders are costing and they keep coming and no mention of how many returned.
One bill that is all it will take. Nobody without legal proof of identification will not be held in hotels but flown out of here or held in detention camps until they can be removed. If the HOL will not back the government with getting rid of all the laws that makes it easier to fight to stay, give notice of closing them down. There is more than another few millions saved. They in their privileged position will not be affected like the rest of the population. The gravy train and troughs has got to be turned off and stopped. The people have had enough.
April 11, 2022
I agree Turboterrierā¦ no where near is being done to curb the illegal entrants. And yet, legal Ukrainian refugees are having a dickens of a job to enter.
Off topic – I heard on GB News (a viewer emailed as part of a discussion) that EV cars are being pushed by government and that the vehicle industry have been lobbying government for years for the preferred hydrogen. Why do government so prefer electric? Hydrogen would be much easier as most cars can be converted to take hydrogen, and could be filled at petrol stations as now but would have the hydrogen instead off or as well. No need for wires across the pavement or at every car parking space at motorway services. Typical government to go the more complicated route.
April 11, 2022
Sharon : āWhy do government so prefer electric [vehicles]?
I am no fan of sub-optimal bevs with all the issues of long charging times, fast battery degradation, the need for chargers everywhere and eco-unfriendly battery disposal. Also batteries do not have sufficient energy density for large/heavy vehicles.
But, apart from using hydrogen for very specific large/heavy vehicles operating from a single depot, hydrogen is even more expensive and impractical than bevs.
Firstly, BTW, hydrogen cannot be used as an ice fuel ā for one thing it produces NOxs when burnt in air. So it can only be used in fuel cell vehicles (fcevs) which are even more expensive than bevs. You may be confusing with running ices on methane gas where minimal conversion is required and a considerable reduction in CO2 and NOx emissions could be achieved over using diesel/petrol.
Most importantly, hydrogenās intrinsic properties ā a tiny molecule with a low energy density, low liquefaction temperature, and needing a lot of energy to produce/compress/liquefy/store and distribute safely makes it uneconomical.
A better long-term approach is to research into producing green hydrocarbons ā synthetic liquid hydrocarbons ā where the hydrocarbon fuel can have the energy density and all the practical properties of existing hydrocarbon fuels but where the carbon (CO2) is taken out of the air in manufacture and it burns cleanly in an ice.
Reply JCB have developed an ice hydrogen engine
April 11, 2022
Still in development to obtain enough power and fuel economy without NOx emissions.
April 11, 2022
They are simply using OUR MONEY to paper over the cracks of their incompetence to control their departments and spending. Witness the questions to both the Business and Health Secretaries and the non-answers he has recieved concerning expenditure and management (or lack of).
April 11, 2022
Come ON Turbo! None have been chucked out, they are welcomed with open arms. Remember they are the army that is finally going to destroy Great white Britain, the odd woman and child are just a cover to protect the fighting age young men invading.
April 11, 2022
+1 turbo.
But that would mean abandoning the policy of population replacement.
April 11, 2022
Turbo
Yes processing illegals should be done in person at a refugee camp in Jordan that we are already funding, to the tune of Ā£1 Billion per year if reports are true.
As soon as they land in the UK send them (escorted) to Jordan, and let them join the legal queue to complete the necessary paperwork.
Such a simple solution, and no queue jumping
April 11, 2022
Many of our politicians have become so accustomed to following EU decisions that they have forgotten how to think for themselves (if they ever had that ability, which I doubt many did) and they certainly don’t make the UK their priority.
I had a personal saying, that if the EU had a choice of two directions, they would always choose the wrong one. This now applies to the Boris and the UK.
April 11, 2022
Much truth in this. They choose what suits government āworkersā, government or their mates in big business in general and almost never the 80% in the private sector who have to pick up the bills and pay the vast tax levels.
Still some good news it seems we shall see:- A Ban on council waste fees on domestic waste to curb the rise in fly-tipping.
When they brought these large charges in did āincreased fly-tippingā not occur to them?
April 11, 2022
But they no longer have the fig leaf of Brussels (EU) to hide their shame. And blaming President Putin won’t work either.
April 11, 2022
Shirley M,
I agree, our politicians have forgotten how to run a country. Forty years of rubber stamping eu orders have left us with a clueless state.
April 11, 2022
they looked on watching us getting tied up in knots year upon year, and now we can untie them they have no idea how to start…
April 11, 2022
Shirley. You don’t have to have brains to see a solution just common sense so maybe they have neither.
April 11, 2022
Perhaps if the cabinet wasn’t selected based on race and gender the outcome would be better.
April 11, 2022
and which friends recommended candidates.
April 11, 2022
Shirley M
Well said. The real strength that the government could utilise to get them out of the mess they have created has been firmly banished to the back benches to be ignored. One must ask what was the criteria for selection to the cabinet?
April 11, 2022
The case of the ECB is interesting. For them presumably QE has 2 purposes – one is stimulative, and with inflation rampant even in Germany they should clearly stop that. But the other is political – the ECB needs to keep buying up French Spanish Greek and Italian bonds otherwise the market must absorb the whole issuance. Without an explicit cross-guarantee from the solvent EU states, that would mean rapidly and potentially widely diverging bond yields, undermining the euro.
April 11, 2022
@ Richard1 – a sound point you make. It is hard to imagine the Bundesbank of the days of the Deutschmark being in such a bind, as I expect many inflation-fearing Germans will recognize.
April 11, 2022
For those who don’t know Quantitative Easing from a Reverse Repurchase, have a look at https://bsic.it/8092-2/ Also, you will see the difference between Quantitative Easing by the FED and the ECB. Remember that in the cock-eyed Eurosystem, every member is effectively using a foreign currency.
April 11, 2022
It’s a Life on Mars experience heading our way. Those who lived through the 1970s remember how grim they were; those who didn’t are about to find out.
The conditions have been deliberately created by our Governing Class and militant unions (Public Sector this time): inflation/money devaluation; an energy crisis which they have exacerbated with the Net Zero lunacy; food and other essentials shortages; probably power cuts in the winter.
Meanwhile two of the CON Globalists in Government have been found to be avoiding paying the taxes they inflict on “the peasants.” I wonder how many others are lurking in the Corridors of Power and sheltering in the House of Frauds?
If the CONs were trying to lose the next election they couldn’t do a better job of it. Perhaps they’ve worked out that’s the best way of getting rid of Johnson and Carrie Antoinette?
At least the music was good in the ’70s. I doubt if even that will apply this time.
April 11, 2022
+1
April 11, 2022
+1
And we are facing the new 70s in a strange, invaded and defeated country, probably miles from our real homes.
Many families have scattered due to these new political battles ( donāt talk to them they voted for Brexit etc).
And everything, by design is more frightening, less free and constantly changing.
Give me poverty in the 70s ā¦and paraffin!
April 11, 2022
Good comment, Donna!
April 11, 2022
+1 and depressingly the alternatives to these Fake Conservatives are Labour/SNP – with exactly the same policies but even worse.
April 11, 2022
The 1970s were not grim.
I got inflation pay rises and more as I gained experience in a full-employment job market with plenty of work available. Decent pensions were still widely available.
The three day week meant more free time.
Lots of things were becoming more widely available- motor cars, consumer durables, foreign holidays.
The music was terrible though and the fashions even worse.
April 12, 2022
That’s how I remember it too, Peter.
The charts music was poor but there was a mass of other wonderful music.
April 11, 2022
Donna
Another very good post to agree with.
April 11, 2022
Donna – yes the music was definitely better and so were the summers (especially 1976 – fact) despite global warming. In fact the Labour government had to appoint a Minister for Drought just to get it to rain and then we had floods. Ahh happy memories.
April 11, 2022
āDonnaā and āSummerā and ā1976ā and āmusicā.
Is this some sort of cryptic clue?
April 11, 2022
Shortage of fertiliser because of sanctions will eventually mean no veg/fruit.
Night soil men used to see to thatā¦barrowing human waste down to the market gardens in South London.
Very effectiveā¦like the bucket loo near grandadās (magnificent) rhubarb bed.
Good idea?
April 11, 2022
mostly taken down to the Thames to be barged along to Essex.
April 11, 2022
+1
Wonder what happens to it when it arrives?
Chucked into the sea?
April 11, 2022
spread on the land…
April 12, 2022
To build Basildon.
April 11, 2022
I had the misfortune to work at a sewage plant just outside East London on the North bank of the Thames. Somewhere near Rainham I think (it was a long time ago). It was a civil engineering job – extending the size of the existing plant. For some reason new people on the site were given a tour and shown how it all worked. First the waste went into large circular tanks and the solids settled. The liquid moved on into other tanks where a combination of movement (rotating paddles) and sunlight broke the urine down. The solids were pumped out onto the surrounding land and allowed to settle and compact for quite a while (a couple of years, if memory serves). It was then loaded into giant lorries and despatched as, apparently, the best fertiliser available.
At the end of the process (of filtering the solids and breaking down the urine) the liquid went into the Thames via a concrete outfall. There was an enamel mug attached to a chain and (I kid you not) the bloke showing us around dipped the mug into the fluid going into the Thames and drank it! There were no chemicals involved anywhere in the process.
Now the above sounds (as my mum was fond of saying) āall well and goodā but it made me wonder what chemicals were in the sewage (from industrial processes and things like people washing out paintbrushes in the sink) which in turn found their way onto farmland and into our food. As an aside, I read somewhere recently that micro plastics are in our lungs.
April 11, 2022
I should add, I only lasted a week on that site. I couldnāt take the 2 hour journey from where I lived West of London. No M25 in those days. Even now, in happy retirement in West Dorset, if my wife has LBC on the radio and I hear the words āthe A13ā mentioned in the traffic report, I involuntarily shudder.
April 11, 2022
It may be shit to us, but bread and butter to the workers.
April 11, 2022
+1
Cor! What an adventureā¦if a little bit yuk.
Reminds me so vividly of the many jobs I got. Some lasted more than a day!
It was so easy to just walk into one then wasnāt it?
I think you are right re chemicals etc. We all get dosed with excreted Prozac and antibiotics.
And probably worse.
So if they are still doing such things we should be ok for fertiliser?
April 11, 2022
No, it just means the veg/fruit is imported. If farms go bust, no worries, especially if the land can be developed for housing. People paying tax – kerching for the Treasury.
April 11, 2022
+1
Exactly.
And arenāt they after land for bio mass and then using tree planting to obtain carbon credits?
I know this govt wonāt rest until every blade of grass is covered in concrete.
Got to keep asset prices up.
April 11, 2022
Served in BAOR and the German farmer next to the barracks used to spray his fields with the contents of his septic tank. His crops looked healthy enough but the pong was truly dreadful!
April 11, 2022
Ian. Yes the farmer opposite us did the same. He always had good pasture.
April 11, 2022
+1
Oh my!
And have you fancied cabbage since?
Actually it is a very good ideaā¦a bit like ācircular industryā.
April 11, 2022
Everhopeful, was that the “rhubarb triangle” of Balham, Streatham, and Tooting?
April 11, 2022
+1
Yes. I think you could be right.
What of Wakefield, Morley and Rothwell?
The U.K. had rhubarb ( from Siberia) in the 1700s and by the 1800s it had become very popular.
So I am certain it would have been grown in S. London gardens.
April 11, 2022
There is a large deposit of Potash on the East Coast.Letās get digging.
April 12, 2022
Bob. Are you referring to the new source there?
The English company which got work going needed financial support after getting a long way down but the Tory gov saw no advantage in helping so it was sold to a global company at a knock down value.
It can sell the product to wherever they like and England will lose not only that but the company will make sure their profits and surplus cash goes overseas.
Yet another sell out of the UK by the Tory party.
April 11, 2022
After you…
JF
April 11, 2022
Conservative Woman – liver damage in young children. You people interested?
April 11, 2022
I’d certainly be interested in seeing a proper enquiry into adverse effects. Not a multi-million Ā£ whitewash ‘public enquiry’ into Covid.
April 11, 2022
Demand – more money increases demand, more people increases demand, lower supply increases demand.
These are all things we can do something about. But years of taking orders from the EU have left us less agile and scared of minority interests.
Govern for the majority and make decisions based on their need not Twitter opinions. If you ignore Twitter, it will go away, it only has influence because you listen to it.
April 11, 2022
I would suggest not all is down to the reasons you suggest John.
The government were responsible for closing down or restricting many businesses for many months, thus the fragile supply chains, finely balanced to demand, was disrupted or in many cases broken.
Once shortages start to happen, concern or mild panic starts to set in, and prices automatically start to rise as businesses and customers search for product.
This was certainly very clear to see in the building industry, where even very basic products like Plaster, cement and timber were in short supply.
Once prices start rising you get a cumulative spread effect, as products and projects increase in turn, whilst demand increases, so do prices until there is an over supply, we have a long way to go yet I am afraid before we get back to, or reach a sensible balance.
April 11, 2022
With the price of power going up significantly, as well as the cost of fuel, everything that is manufactured, stored, and/or transported, will also increase.
April 11, 2022
JR: “They stuck to silly unrealistic forecasts of inflation for this year of around 2% when it was obvious it would rise considerably higher,..”
Of course they did. Do you really think they didn’t know? It was deliberate. These people are working to a global agenda which is against the best interests of the majority. MPs are facilitating this and are useless.
April 11, 2022
we already had social engineering which made it unattractive to save and look after yourself, and more attractive to just depend on the state. we need more freedom in individuals hands, in all aspects of our life.
April 11, 2022
In the 1970s and early 1980s the sharp rise in oil prices followed by Volker’s interest rate spike caused immense damage to the UK economy – and changed it forever by wiping out whole swathes of industry . Today rapidly rising commodity prices and the consequences of the zealot’s drive to net zero will do the same even before rising interest rates and taxes kick in. When will Conservative MPs wake up to the disaster that is about to engulf us all and them? Or are they blind to the implications and consequences of the policies they support?
April 11, 2022
Oldtimer
The short answer.
They appear to be blind and deaf, and have not learn’t any lessons from history.
April 12, 2022
Oldtimer.
The most important thing to Tories is the party itself. The country, its people, its economy and sovereignty can be abandoned if that is required in protecting it.
April 11, 2022
‘Covid inspired downturn’.
I have to disagree with that. As I have said over and over again to all who said to me ‘because of Covid’, Covid never made a law or dictat or restricted our freedoms, ever.
Governments however did. They have never, nor ever will admit how dangerously wrong they were and what utterly insane decisions they made to lock down and bring the whole country to a standstill. Now we must suffer the consequences of some of the very worst decision making in history.
We should never forget the role of SAGE and big pharma pushing now failed vaccines.
April 11, 2022
Off topic, yesterday I pointed out that Sky News had forgotten to mention Brexit in this article:
https://news.sky.com/story/dover-crossing-delays-mean-that-british-hauliers-lose-800-per-lorry-as-products-go-off-12587111
“Dover crossing delays ‘mean that British hauliers lose Ā£800 per lorry’ as products go off”
However this morning CityAM has not made the same mistake with this propaganda piece:
https://www.cityam.com/brexit-onslaught-deepens-as-a-third-of-all-uk-firms-exporting-to-eu-simply-vanish-due-to-red-tape-knockout/
“Brexit onslaught deepens as a third of all UK firms exporting to EU simply vanish due to red tape knockout”
“The number of UK businesses exporting goods to the EU fell 33 per cent to 18,357 in 2021, from 27,321 in 2020, according to new data from HMRC.
Discussing the figures with City A.M. this morning. Michelle Dale, a senior manager at accountancy firm UHY Hacker Young, pointed out the fall is due to the extra red tape UK businesses must now comply with when exporting to the EU.”
Well, let’s play along and pretend that none of this is in any way connected with a global pandemic, and ask how this HMRC measured reduction in the number of UK businesses exporting goods to the EU compares to the total number of businesses in the UK, and therefore what kind of impact this reduction may have on the total economy of the UK. Luckily the House of Commons Library recently produced a report:
https://researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf
and that says:
“As of 1 January 2021, there were 5.6 million private sector businesses in the UK, 6.5% fewer than in 2020. This was the largest fall in business population since the series began in 2000. The decline was largely of businesses with no employees, the largest category of UK businesses. 75% of UK businesses had no employees in 2021; over 99% of businesses are Small or Medium Sized businesses ā employing 0-249 people.”
So, firstly, as might be expected with businesses being shut down during the pandemic there has obviously been a downwards trend in the number of businesses which do not export goods to the EU, as well as those which do export goods to the EU, but secondly the numbers mentioned in the article are tiny as a fraction of the total businesses in the UK, and therefore the overall economic impact will also be small.
At the extreme, a loss of 8964 businesses which previously exported goods to the EU would be just 0.16% of the 5.6 million businesses in the UK; that could be quadrupled to 0.72% of businesses with employees, the SMEs of which a lot “canāt afford professional advice to cope with Brexit-related red tape”.
As repeated ad nauseam over many tedious years the economic impact of EEC/EC/EU membership has been vastly exaggerated for over six decades; in reality something like 6% of businesses export something like 12% of UK output to the EU, and even if the special trade relationship with the other EU member states was worth 10% as far as those exporters were concerned on a simple basis their gain would be diluted roughly eightfold to give a gross benefit of about 1% for the whole UK economy.
It is more than a pity that the Treasury under George Osborne told such lies about the anticipated economic losses if we left the EU without any special trade treaty, just defaulting to the existing WTO treaties.
April 11, 2022
“How much higher do they want it (inflation) to go?”
Sir John,
As long as Christine Lagarde is president of the European Central Bank, the sky’s the limit.
April 11, 2022
Wanton inflation to reduce the national debt… All the western governments are at it!
Martin Lewis says to expect riots and civil unrest as many can no longer afford both heating and eating.
Fishy Rishi has referred himself for investigation, I do fervently hope he is replaced with you, Sir J and then we can get on and rebuild post Brexit as we need to, detailed from your posts passim.
We need cheaper gas/oil NOW through to the gradual transition to new nuclear/hydrogen and intermittants. Finally an energy independence policy has fledged, but we still need to reduce fuel taxes further and get fracking..
We need to grow more of our own food & make our own fertilisers. Ripe for the next policy revision imho.
We don’t need anymore HS2, nor such massive goverment departments.
The dinghy illegals is a consistant embarrassment, Ukraine paltry visa numbers too, sorry to say, but Priti does need to consider her position. The Home Office has proven once again it’s not fit for purpose and still is the cabinet post from hell.
April 11, 2022
An ‘investigation’. The standard political answer when they want to kick the can down the road. No-one will be able to ask any questions and no-one will be able to voice any opinion until the ‘investigation’ is complete, just like partygate which is still pending months later It stinks. Not just Rishi, but the whole damned lot of them need to go. They are too far gone now to do any good.
April 11, 2022
All true of course.
Hopefully the dreadful Sunak will be gone soon, please throw your hat in the ring for the role?
April 11, 2022
“Don’t forget to pay your taxes. Other countries are depending on it!”
Stolen from FB, but how true it is!
April 11, 2022
Central banks are no longer in control of Western economies – the massive rise in energy prices has fundamentally changed everything.
Our Chancellor made a big mistake in not cancelling the NI increase of Ā£12bn when he had upwards of Ā£50bn more tax revenue than he expected.
Then the Bank of England put up interest rates in full knowledge that the increases in the energy price cap, both now and again in October, would take most remaining disposable income out of the wallets of the average family.
It doesn’t matter how disposable income is taken from families, the effect is the same. There was certainly no need to increase taxes and put up interest rates to limit inflation for the remainder of this year.
I fully expect us to be in a full-blown recession by the end of the year.
April 11, 2022
Chriss. No doubt it will all be blamed on Ukraine and Brexit. Oh and that pandemic or whatever you want to call it.
April 11, 2022
The State wants inflation because it causes more people to become dependent upon it through eroding savings and the ability of small, privately owned companies to survive and also because it erodes at the same time our national debt – just about the only thing we still own.
Even when our national debt is high the State never cuts its expenditure and continues to employ more and more people through ever increasing legislation and other wheezes.
Not only is this done so they can justify further tax rises but also to reduce the numbers of people available for working in the private sector to such low levels they can at the same time justify their policies of massive inward migration – even for illegal migrants who are young men of fighting age without ID, who are invited into the country with offers of 4 star accommodation, Ā£40/week pocket money and the freedom to roam our streets.
The state wants high levels of inward migration in order to destroy our national identity.
April 11, 2022
Too late. In certain areas of Leeds (and no doubt many other cities) you are fortunate if you spot a shop sign in English!
April 11, 2022
Why has Rishy moved out of number 11 after setting this bonfire, surely he is safer from the media behind the security at Downing Street? Why are his NI corrections not coming online until July? Why 3 months wait, why July after the local elections? What is your government playing around at? You should ask yourself what do they want these awful metrics and figures for this quarter? When it is something he could have corrected immediately, a lot of good councillors are going to lose their seats unless the people really do keep local politics out of national decision making.
Hasn’t the government had a Ā£3bn per year boost from not having to remit vat on imports from the rest of the world? Plus a big boost in council tax from all the massive increased housing in every County and City? There was Ā£1bn less divorce payment to the EU in 2021 and a further reduction this year about Ā£5bn.
Sunak’s massively boosted taxes on the middle and given people money back from July that earns under Ā£35,000, + the Ā£150 usually paid back at Ā£15 per month for 10 months.
April 11, 2022
“To the extent that the inflation stems from a series of supply side shocks” says JR. I will agree with that; but, I suspect the supply side global corporations are taking an opportunity to do some price gouging. This is an attempt to raise global commodity price levels, up to a new normal for the net-zero world to come.
For instance. The UK monetary base (MB) is currently Ā£1,046 billion and the GDP Ā£2,195 billion. That means the government’s money is circulating in the economy at a rate of 2.1 (GDP / MB). That is very low. Likewise, M1 ( MB plus current accounts at high street banks; basically money you could spend with a Debit Card any time you want), is at Ā£2,835 billion. That means the velocity of circulation of M1 is 0.92 (GDP / M1), that is very low. M1 is not even circulating through the economy once in a year.
So, if UK households, a large part of the “demand side” of the economy, are hoarding their cash and not spending it; how come inflation is so high?
April 11, 2022
Keep on Sir John censoring your own blog as you go along in case somebody spits it out- you must be quaking in your boots
April 11, 2022
Agreed Sir John – especially as we need UK fracked gas now as a matter of security priority.
April 11, 2022
The Corrupted on Radio 4, Sunday pms is rather interesting.
Radio 4 churns out some goodstuff occasionally.
April 11, 2022
I have come to suspect an element and very likely the thing that kick-started this bout of inflation was the economic distortions that Covid caused as much as the printing of extra money (I don’t deny much higher energy costs and the Ukraine war are now stoking inflation).
Certainly Covid caused enormous distortions in the economy. Those in ‘essential jobs’ (like my brother) did rather well-many picked up overtime. Those already on Universal Credit did well. The salaried (like M.P.s.) were scarcely affected. The furloughed lost out but not catastrophically (unless on high pay). Those who slipped through the net, including many self-employed had an awful time.
Yet the distortion between economic sectors was even worse. As foreign holidays were hardly possible in 2020 and risky in 2021 those working in or around tourism had a dreadful time. However as so many people spent money on home improvements instead of holidays building materials suppliers and builders/tradesmen had a boom time. This was exacerbated because some were off work with Covid and others retired altogether but because people couldn’t train as plumbers , electricians etc., with social distancing, others weren’t entering such trades. So there was a massive shortage of construction workers and massive extra demand. So the prices most charged rose enormously, setting off inflation.
That may have initiated a more general inflation and certainly started to send inflation above the low pre-pandemic levels.
April 12, 2022
Thank you, this seems a very perceptive analysis, Geoffrey, far above the pay grade of the journos who propped up the whole disfunctional narrative with their sycophantic reportage.
April 12, 2022
There is going to be a downturn. The only question is whether it will be a small one now or a big one later. Bearing down on inflation makes sense and constraining borrowing makes sense. Given the upward trend in interest rates, interest on State debt will cost more. Partly because of the pandemic, and now because of the armaments being supplied to Ukraine gratis, the Chancellor will have a difficult job over the next couple of years. He could do with support.