In These New Times

A new paradigm for a post-imperial world

Britain in the midst of first double dip since the 1970s

Posted by seumasach on January 22, 2012

Here are the main themes of the UK media’s coverage of our economic collapse: the recession is a “technicality”; it’s all Europe’s fault; things will get better with more QE just like they didn’t last time.

It’s hard to know what to say to this. Britain is a consumer economy or it is nothing. The recession is plain for all to see: all three of my favourite coffee shops in the West End of Glasgow have closed since Christmas. The streets and roads are emptying. This is a downward spiral, a reverse multiplier.

Since our exports to Europe never amounted to much, even with the pound approaching parity with the euro, Europe can hardly be to blame. Of course, hedge funds may be losing bullions speculating against the euro but that is a different matter.

QE did nothing to help last time: it merely generated inflation and gave the financiers a number of ingenuous options such as carry trades to make a quick buck.

As I say we’re a consumer economy or we’re nothing. It looks like nothing. Mired in debt, stuck in homes which can’t sold, overwhelmed by rising prices of food and fuel, facing unemployment and frozen wages, facing cuts in benefits, overburdened by unfair taxation such as the notorious council tax, a virtual poll tax   which hasn’t been introduced elsewhere, facing endless fines for trivial driving or parking offences, unable to afford the exorbitant cost of public transport, watching our business fail as disposable income dries up, wandering around half-empty supermarkets looking for bargains and finding everyone gathering round the reductions shelf, unable to get simple house repairs done and paying through the nose for the failed attempt, buried under a cruel and corrupt benefits system, fighting failing health as the government blasts us with dangerous and carcinogenic radiation. All this only to be told by the media and politicians that everything is fine apart from the Eurozone, to be lied to incessantly by an army of irremediably corrupted experts, to have our intelligence insulted and our pockets emptied. This is Britain before the abyss, blind and befuddled, threatening or hectoring our international partners, hubristic and delusional, smug and stupid, rejoicing in the woes of others whilst seemingly unaware of where we are going. We are going to hell.


22nd January, 2012

This week official growth numbers are expected to show that the economy shrunk by 0.1% in the final three months of last year.

The same experts currently predict a similar contraction between January and March of this year.

This would mean Britain would have suffered two consecutive quarters of negative growth – the technical definition of a recession.

Economists believes the UK’s recovery has been hamstrung by the eurozone crisis, which has smothered demand for British exports and fractured business confidence at a time when consumer and government spending is weak.

Alan Clarke, an economist at Scotia Capital, said: “We already have official figures that show industrial production and the construction sector fell during much of the quarter – it would take a staggering bounce back to avoid a negative number.

“That doesn’t seem at all likely.

“Along with many forecasters we expect be a short and slight double dip recession – it will pose a presentation challenge for the government, but growth is likely to pick up quite strongly in the third quarter of this year.”

The average forecast among 33 economic forecasters for Wednesday’s fourth quarter of 2011 GDP number is -0.1%, down from 0.6% in the previous three-month period.

In last year’s Budget, the Treasury based its tax and spending plans on the assumption that economy would grow by 0.6% in the final quarter of last year.

The Bank of England is expected to embark on another round of quantitative easing – the economic stimulus often referred to as “printing money” – in a bid to shore up Britain’s lacklustre recovery.

Last week official figures showed that unemployment rose by 118,000 to 2,685,000 in the three months to the end of November – the highest level since 1994.

Although retail sales figures for December were slightly stronger than expected, high street sales remain weak as consumers continue to endure the harshest squeeze on their wallets for many decades.

Rachel Reeves, the shadow chief secretary to the Treasury, said: “Last year should have been the year when we secured economic recovery and saw unemployment continuing to fall.

“Instead we have seen a year of stagnation and more people out of work than since the last Conservative government in 1992.

“The government’s plans are now badly off track because they gambled on cutting spending and raising taxes further and faster.”

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