Right so, Jeremy Hunt has come out and said after we’re apparently going to avoid a recession, that perhaps a recession wouldn’t be so bad if it means we can get inflation down. He’s even gone so far as saying it’d be a price worth paying! Maybe that’s why he’s said it though, he knows a recession is unlikely, but it also implies that growing the economy, which is one of Sunak’s five pledges lest we forget, isn’t that important to him. Equally of course, it is one of Sunak’s five pledges to halve inflation before the year is out so perhaps Hunt is thinking a short term recession now to meet the inflation pledge can be fixed later before the end of next year and the General Election that awaits. Still, there’s no escaping the fact that Tories pride themselves on being the party of economic competence – even if it isn’t true – so to admit to wanting to hurt that, or saying it wouldn’t be a bad thing? It ought to be a bit of a what the feck moment to many of their voters.
This all came out in the last week in response to the thought that the clueless governor of the Bank of England Andrew Bailey, a man who looks like he’s walked straight out of Phileas Fogg’s Gentleman’s Club is mooting still more interest rate hikes to try and bring down inflation despite the fact he’s had little to no success doing so thusfar. Headline inflation figures have dropped, inflation was forecast to drop this year anyway, that it has done so stubbornly slowly seems to have been the impetus for Bailey to interfere and by interfere it’s been to make people’s lives harder as mortgage rates rise again, hitting homeowners, hitting renters as their landlords pass those mortgage hikes onto them and having the right wing Tory rags wailing about he buy to let market collapsing, and who will rent to the renters. Well, here was me thinking home ownership was the dream you peddled? Home ownership for whom? Anyway, more interest rates also increase the risk of said recession which is what prompted Hunt’s comment, as when interest rates rise, stuff becomes more expensive, that hits economic productivity, growth slows, profits drop, you move towards the other direction, but still, its an unlikely scenario. Headline inflation has dropped, it dropped noticeably after April, down to 8.7% now and although still higher than some forecasters predicted, its largely as a result of everyone’s incomes going up as wage rises come in and benefits were uprated by the previous 10% headline rate of inflation. More money in people’s pockets, the very thing banksters were telling people not to ask for because it’ll drive inflation did the exact opposite. When ordinary people have more money in their pockets, they spend it, that drives the economy, it is painfully obvious, yet we’re all brainwashed by the media and politicians to believe the opposite. Of course food inflation is staying above 19% and that refuses to budge, such is the ongoing saga of supply and demand, driven by Brexit red tape, driving the cost of living crisis. There’s been arguments that the supermarkets are profiteering right now, there’s arguments that wholesale ingredients are coming down but the savings aren’t getting passed on, it’s where people are spending the bulk of their extra money, it still isn’t going far enough on the basics and is what is prompting Rishi Sunak’s latest brain fart of capping the prices of certain products, which could result in some products having to be sold at a loss, in which case, where is the impetus for the markets to even supply them and how will that impact upon the producers of said good, wheat for bread, milk, eggs etc? Stupid idea and not the answer. Of course what the government could do if they weren’t so wedded to free marketeering and their greed is good Thatcherite mantra is look at what other countries are successfully doing. Let’s look at Spain. The entire Eurozone has been battling inflation too, all connected to the energy crisis, they of course much more beholden to the ongoing Russian-Ukraine war than we are, despite Tory excuses to the contrary, but Spain’s inflation has dropped to just 2.9%, a two-year low, so what have they done that nobody else is? They brought in a gas price cap, so people weren’t getting fleeced over energy costs, they protected incomes by bringing in rent controls, limiting how much rent could be increased by and they brought in a windfall tax on profits, taxation itself being an inflationary control measure, it’s why we pay tax after all, so inflation doesn’t run away when the government prints money to pay for stuff. Taxes are inflation controls so every time you hear the Tories say they want lower taxes, what they really mean is they want lower spending because otherwise inflation will rise. Did I mention Spain has a socialist government by the way? Did I forget to mention that? Must have slipped my mind! Wealth inequality in this country is now so stark that a wealth tax of just 2% on the richest 350 individuals in this country would raise £16bn in tax. It’s an obvious solution to bring down inflation fast, it isn’t going to happen because they’re probably Tory donors. If Sunak misses his target to halve inflation by the end of the year, when he could arguably achieve it overnight, it will be for nothing less than ideological aversion to taxation, but when it literally dictates the rise and fall of inflation, it’s idiocy. I think we know where they’re going when rather than admit interest rate hikes don’t work, Jeremy Hunt backs more of them, even to the point the economy shrinks, rather than tax the rich, bring in controls on price rises and place more money in ordinary people’s pockets. They aren’t economically competent, they’re simply running it in the interests of their party, those who fund them and therefore shouldn’t get a single vote from any of us, when voting Tory is literally a vote to make like for yourself harder and a vote to make you even poorer. It’s way past time this country shifted away from Thatcherism, capitalism and embraced policies and politicians working to benefit us and not themselves and after you’ve liked, shared and subscribed to the channel, it’s a brand new month, seems like a good idea to me, especially if you’re keen on news told like it is without the spin, then stick around and watch my little recommendation here where I go into how big of a berk the Bank of England is led by and I’ll see you on the next vid. Cheers folks.