Inflation has fallen a long way and the economy has stalled. That is what you should expect given the intense monetary squeeze administered by the Bank, and the efforts at fiscal tightening by the Treasury.
There hasn’t been a worse collapse in output and jobs because the tax rises and fiscal tightening started from a loose heavy borrowing position. Many better paid people have extra savings from covid period earnings when their spending was cut by lockdowns. Savers have some increased interest returns. The public sector has continued to expand job numbers and offer substantial wage increases to settle strikes .
The US economy has also seen a big fall inflation from tight money policy. It has had high growth this year from savings overhangs and from a large fiscal boost, with an extra $1trillion of state borrowing.
The UK needs to relax the monetary squeeze a bit. The Bank has had a very bad run of wrong forecasts and damaging policies, lurching from too easy to too tough. It should stop the sales of bonds in the market at big losses, which add to the shortage of money . The Chancellor is in joint control of this policy and pays for all the losses, so he should sort it out with the Governor now.
The Chancellor should use the coming big fall in debt interest costs given the way they calculate and report them from falling inflation. This reduces the costs of indexed bonds considerably. He should announce a growth strategy with cuts to IR35, increases in the VAT business threshold and reductions in energy taxes at its heart. Cutting energy taxes would also cut inflation more, reducing spending pressures further. Lower energy taxes could save more of our industry and reduce imports.
He should impose an immediate freeze on external recruitment by the civil service and other public administration.
December 26, 2023
We need rather more than a freeze in Civil Service recruitment. Much of what they do actually does positive harm – so fire all those sections for s start – about 50% of them released to stop doing harm and get productive private sector jobs. They surely would be happier to.
We need to ditch the insane net zero religion, halve the size of the state, stop blocking the roads, restore incentives to work relative to those not to work, cut taxes, cut red tape hugely, go for easy hire and fire, take real advantage of Brexit for a change, cut low skilled immigration, ditch all the woke lunacy, recruit on merit amd ability…Then get fair competition between state and private in healthcare, schools, universities, transport, broadcasting. Stop the net harm Covid vaccines and investigate the large numbers of excess deaths properly rather than pretending it does not exist.
December 26, 2023
I would vote for you.
December 26, 2023
The Reform Party is seeking candidates matching Lifelogic’s intelligence and opinion to represent them at the General Election.
December 26, 2023
Indeed Richard Tice and Ben Habib are sound alas they cannot gain many (if any) seats, let alone any real power under FPTP voting.
December 26, 2023
Not if gutless people do not vote for what they believe in and are far too stupid to keep voting for high tax, big state, authoritarian control, EU lockstep, EU courts, laws and borders, EU fines imposed by EU courts across UK!, mass immigration Tory party! 14 years and how ,any elections and PMs? This is the insanity LL promotes by his comments. Totally unscientific.
LL, I think you need a period of reflection.
December 26, 2023
@Hope
That is the reality alas just too many always have always will voters. Many rather old. They are rather unlikely to change their minds at 75+. With FPTP you need to base level vote to build on.
December 26, 2023
I will not be standing as I would have to pay far too much tax in the UK and it would grieve me to see them piss it down the drain on things like HS2, lockdowns, duff net harm vaccines, test and trace, Lord Cameron of Greensill, Baroness Mone…
But Tice & Ben Habib and a sensible few Tory MPs like JR will I hope will be. Alas FPTP means the sensible people will not gain much if any power.
December 26, 2023
I will not be standing as I would have to pay far too much tax in the UK and it would greave me to see them piss it down the drain on things like HS2, lockdowns, duff net harm vaccines, test and trace, Lord Cameron of Greensill, Baroness Mone…
But Tice & Ben Habib and a sensible few Tory MPs like JR will I hope will be. Alas FPTP means the sensible people will not gain much if any power.
December 26, 2023
The goods news Tories will be obliterated and hopefully wiped out as they deserve for repeated lies, deceit and acting deliberately against mandate to be in office, against its manifesto, against its people and against our national interest. It is incomprehensible how treacherous this dishonest party is.
With LL self-proclaimed ability for figures he should know as a matter of record and fact Tories have been worse than Labour on all aspects of the economy! Taxation, debt, print money, debt interest, foreign aid- Plebgate wants to feed Africa at the moment with borrowed money! Yet persists the Tory line Labour would be worse!!
December 26, 2023
Two greatest Tory achievements in 14 years: gay marriage and smoking ban!! Give me strength. They were given 85 seat majority done and they deliberately betrayed the nation especially N.Ireland!
December 26, 2023
+1 certainly they have been appalling in almost every respect.
December 26, 2023
Absolutely.
December 26, 2023
LL
100% behind you.
Looking at the state of our streets, we need to spend several years of removing illegals and ZERO immigration.
December 26, 2023
+++
Oh yes!
Doesn’t everywhere look DIRE?
A ghastly pall of poverty and vile attempts at brutalist construction.
You’d think a far left govt had been in power for at least a decade…
Oh! 😐
December 26, 2023
But they will keep Importing people because they that it’s good for growth.
Never mind the damage it’s doing to the fabric of our society.
December 26, 2023
It is not even good for growth as they cost more (in housing, roads, infrastructure, police, social services schools…than they contribute – and so it depresses living standards and certainly does per cap.
December 26, 2023
The treacherous Snake has already U-turned on immigration pledges just two weeks ago!!
December 26, 2023
We are doomed by dodgy data on the economy, on the climate and on COVID.
December 26, 2023
See the latest Dr John Campbell video on appalling excess deaths figure worldwide. That is only the deaths too & not those just vaccine injured or harmed. Also after the Covid deaths they should be well below normal not say 16%+ up (in some countries) and in all ages.
December 26, 2023
There’s a brilliant vid skit on “Fairytale Of New York” on X
Doctor Dr McHonk-honk.
And no…I don’t think that motor neurone does come on overnight.
December 26, 2023
The whole relationship between GPs, after-hours support, paramedics, A&E, hospital services, clinics, commercial medical provision and of course part-time medical staff working privately whether consulting or agency needs to be re-examined.
The whole thing is a mess, fails the needy, is alarmingly inefficient, over-staffed, confusing and deteriorates year by year whilst absorbing £billions with rarely any sign of improvement.
December 26, 2023
@Lifelogic +1
While agree with you, I would just love to see a single person wishing to be an MP say that their policy will be all those things you mention.
Is that the flaw, to get elected you must first learn to lie.
December 26, 2023
You’re whistling in the wind Sir John.
Sunak and Hunt weren’t installed as PM and Chancellor in order to run the economy in the interests of the UK, let alone the British people.
Instead we get soundbites, spin and empty promises – which get ditched as soon as the words are spoken.
I wish you and the handful of other decent Conservative Constituency MPs well – but your presence in the Not-a-Conservative-Party is just giving “cover” to the Wreckers as they continue with their destructive policies. I have no hope whatsoever that the economy, or anything else, is going to improve under these two puppets.
December 26, 2023
@Donna +1
The next election is being made by the Conservative Campaign HQ about the support for Sunak and Hunt and not about good Conservatives.
Some of us have received the PM’s campaign letter sent out by CCHQ and it says just that ‘Sunak/Hunt’ as your leader is what the next election will be about. He(the PM) says that the race for NetZero is good news, but forgets out of the Worlds 195 Countries only 6 have agreed to the race. He goes on to say the OBR says he is the ‘bees knees’ and will fulfill more of their failed predictions. I could go on it is either a sad letter from the deranged or a pleading of the failed.
December 26, 2023
I share your concern; there seem to be many common-sense actions that could be taken but are not. But first, Sir J talks of a big fall in debt interest costs…really? Perhaps check ACTUAL total government interest payments made 2022/23 and then look at expected 2023/23 on same basis. I think there’ll be a large increase.
Sir J. please prove me wrong.
Reply 24-5 will be well down on 23-4 thanks to the way they include index linking increases
December 26, 2023
Does this government even have an economic policy? Or does it just have policies destroying the economy?
December 26, 2023
@Bill B. +1
All the evidence is the later
December 26, 2023
One of the many problems besetting the UK at present is that its chancellor is not Sir John Redwood. Unfortunately I cannot see any prospect of the Conservative Party addressing this. What exactly it thinks it is doing for UK as the party of government is something of a mystery but whatever it thinks it is doing it ain’t helping.
Just noticed in the sidebar a tweet by Sir John dated 6 Dec 2020: “Time to end EU talks. The EU still wants to keep 70% of our fish. …. their demand is insulting,” He will know that the EU’s CFP was hastily put together in in a mad rush when Heath applied for membership precisely in order to steal our fish. Similarly the WA agreed by Boris still retained many features of Mrs May’s deal that placed in the class of deals normally achived only after military victory. The declinists have no faith in the UK and still regard it as a pathetic weakling and by some unexplained rationale, the beneficiary of the EU’s benevolent protection in a dangerous world. There are still too many of them in the Tory Party. The EU is a rapacious bully as I am sure Ukraine will soon find out and won’t like.
December 26, 2023
+++
Agreed!
Or even if the results of that leadership contest long ago had been different and JR had been PM all this time. Why not?
How could one good man in power for 28 years have been worse than the dreadful rule of chancers, liars and worse?
The results are very evident.
December 26, 2023
@Peter Gardner +1 agree
On reflection there is nothing Conservative about these people that have loyalties elsewhere, as with their predecessors since Cameron they have all been anti UK frauds. When people talk of the WEF Socialist conspiracy all the actions of Governments this century seem to have had that aim, not one working for the people that voted them.
Any real Conservative Government would have got to grips with expenditure and be managing it for a successful prosperous UK i.e. served the electorate as implied and promised. The fact that after 13 years the holes have just been dug deeper, says it all.
December 26, 2023
You seem to think that Ukraine will soon be joining the EU, Peter. I don’t think so. It takes years for countries’ EU accession to be approved, and there are some that have been in the queue for some time now. To fast-track the accession of a corruption-ridden economic basket case would be madness on a scale that even the EU would shy away from. In any case, Black Rock and Vanguard want to become the main investors and take the place over, and they surely wouldn’t want to be constrained by the EU’s pernickety rules and regulations. We’re talking here about how much of Ukraine Russia will ultimately want to leave in existence, of course. In April iast year it could apparently have been more or less all of it. Next year it will be a lot less.
December 26, 2023
@ Hat man “To fast-track the accession of a corruption-ridden economic basket case would be madness on a scale that even the EU would shy away from” – congratulations, for you have just ruined the SNP’s Christmas. I hope you are satisfied.
December 26, 2023
“Many better paid people have extra savings from covid period earnings when their spending was cut by lockdowns.”
I would re-word this statement
“Many people have extra savings from the Covid fraud perpetrated against the British taxpayer during the lockdowns, none of which has been recovered”
December 26, 2023
You need to understand that these people running the banks and the country have very different priorities from the rest of us. They are only interested in fleecing the little people to line their own pockets and increase the wealth of the richest in society.
You aint seen nothing yet as to how bad things are going to get in the next decade. By this time Sunak, Hunt, and the rest of them will be long gone and living elsewhere in a tax haven.
December 26, 2023
+++
Abandoning us to the smoking ruins of their premeditated chaos.
December 26, 2023
“Lower energy taxes could save more of our industry and reduce imports.”
Freedom is slavery, ignorance is strength, war is peace and net zero is energy security.
The next renewable auction round (AR6) will see fixed offshore wind at twice the price of gas and floating offshore wind, necessary to expand into deeper waters, at 5 times the price of gas.
There is no plan for electricity storage, and hence energy security, by the decarbonisation date of 2035 (2030 for Labour) or even by the net zero date of 2050. The ridiculously over optimistic Royal Society report on electricity storage requires the price of electricity to double to provide storage using hydrogen.
Furthermore there is no energy security when relying on a state, described by our security services as “hostile”, for our energy infrastructure (wind turbines and solar panels) and the metals and minerals for electrification. Neither is there energy security by putting all our energy eggs into one basket, electrification, when there is no viable method to store electricity and when it will be necessary to cover half the North Sea for our energy.
Either Net Zero collapses or the country. Not that the fifth column communists who push this Strategy care either way as long as they manage to cause the most damage they can in the process.
December 26, 2023
@Original Richard – ‘fixed offshore wind’ all this money immediately leaves our shores to bolster both directly and indirectly foreign governments coffers. UK energy is owned and subject to the whims of primarily foreign governments we cant vote for and they get rewarded for it.
This Conservative Government has not only refused the UK the right to secure resilient energy supplies it has ensured the energy we buy from these external sources is higher than in those same countries UK business has to compete with. A deliberate policy from the Conservatives to ensure they UK cannot compete.
December 26, 2023
The expansion of the civil service is paying people to dig holes (or to see diversity issues where there are none).
We do not need to expand money or credit any further, house and asst prices are already rising over inflation.
What we need to do is increase productivity across the board, and that includes those in receipt of benefits. If everyone was more productive then we would not need to import increased GDP while decreasing per capita GDP which can’t be a good idea.
In short, spend less, reduce taxes and let the money multiplier do the work not benefits.
December 26, 2023
And personal tax relief must be persued urgently. The personal tax allowance is being seriously eroded by inflation and if further economic and personal decline is to be avoided it should be raised to £20,000.
Lower earners will probably spend all the benefits. This would not be an inflationary problem. Economic activity would be assisted.
I would like to hear if Sir John would support this in a future post on the economy.
December 26, 2023
@The Prangwizard – what is called fiscal drag will take in twice as much as the so-called NI reduction leaves back in society
December 26, 2023
Interesting to note that at the last BoE interest rate setting meeting three of the assembled geniuses actually voted to increase interest rates even further, that was just before the restated data showed the economy was contracting. Is there ever any retrospective analysis of whether the way those people vote turns out to be the correct strategy so that those with a persistently bad track record get thrown off the committee ? I expect not.
December 26, 2023
Most of us, not least yourself, have been saying it for a very long time. Liz Truss indicated that it was the way she intended to go until those powers beyond democracy decided they would have none of it. Make the links to the present usurpers, Treasury, BOE, OBR, big business and our politically active civil service. Better described as the swamp that needs clearing. Even the sight of power leaching from them does not rouse the present incumbents from their doctrinaire path. Au revoir the conservative party.
December 26, 2023
@agricola +1
The implied threat to sweep away the deadwood in the ‘Blob’, had the ‘Blob’ playing big time politics and manipulating the media. Unfortunately for the UK, the unelected unaccountable is larger than Democracy so is the effective ruler, until we get a Government with ‘balls’ – which ever flavor they may be.
December 26, 2023
All is lost with Sunak and Hunt ; any hope of the present team surviving is pure wishful thinking . The polls indicate that a massive change is required and true British values restored . The voice of the vacuum cleaner has spoken and the clean up must be started !.
December 26, 2023
@Bert+Young +1
December 26, 2023
All of this now that we have taken back control – couldn’t make it up
December 26, 2023
‘The Chancellor is in joint control of this policy and pays for all the losses’ If only that was true that the Chancellor or even the Government paid for all the loses. My perception is that it is only the Taxpayer is on the hook for these bills, also the loans and interest on those loans – the Chancellor and this Government do not pay.
The Chancellor and the Government have been empowered and get paid by the electorate to manage and ensure the taxpayer receives the best service possible for their hard-earned money – this Government refuses to manage that outcome, as such are in neglect and need removing.
This Conservative Government now 13 plus year in the making has refused the one simple task at hand, the one they get paid and empowered to do – that’s manage and control expenditure – therefore the economy.
While gallivanting around kowtowing to the media, making pronouncements about nothing they let the Country go down the drain
December 26, 2023
Agreed; the clear priority should be to get the economy growing again; the inflation problem is secondary. Housing is the next priority; perhaps Governments should reduce funding for local authorities that do not build / allow to be built sufficient new housing. Any money from the sale of council housing should be allocated to new housing. Local authority planning depts and nimbys are the biggest obstacle to new building. Illegal immigration is an intractable and emotive issue and we should do the best we can to control it but legal immigration is a far bigger issue that can be effectively tackled and we should do so asap. Civil service employment has surged but productivity has failed to improve. Clearly the senior civil servants are unable to deploy the extra numbers effectively so numbers must be cut . And, finally, this country need to lower the cost of energy to make this country a competitive manufacturing economy again.
December 26, 2023
The government is making one unforced error after another. How many other first world countries churn out so many Arts graduates to the exclusion of science graduates, particularly those of native stock? Arts graduates are far less employable than science graduates for obvious reasons; the consequence of this is that they tend to find work with government related activities including advising the government itself. How can we compete when the civil service is grossly overstaffed yet under-resourced with people who know what they are talking about?
Reform of the education system, thrown wildly of course by Bliar, is urgently required. How can we compete with peers without an equivalent education system? The USA which also has a dire system, imports all their specialists. Is that the way we want to go? Attracting people away from the USA would not be cheap.