Lockdown to Blame for Inflation of 7% – Highest Rate in 30 Years
‘Partygate’ has distracted attention from the dire inflation statistics published today, says Matthew Lynn in the Spectator. Prices are now rising at an annual rate of 7%, up from 6.2% last month – the fastest rate in 30 years. In America it is 8.5%, in Spain 9.4% and in Germany 7.3%. The cause, says Lynn, is lockdown.
We are now paying the cost of lockdown. You don’t exactly need to be Milton Friedman to work out that when you massively increase the amount of money in circulation, at the same time as dramatically restricting the ability of the economy to produce stuff, while also paying a few million people to stay at home for a year watching Netflix and baking sourdough bread, then prices start to escalate very quickly.
It is interesting to note that the one economy that did not lockdown to the same extent as the rest of the world, Sweden, is only seeing a modest uptick in prices (Swedish prices are rising at 4.5% annually). True, the price of energy, and the over-enthusiastic pursuit of net zero, have also played a role. But that is often exaggerated, especially by finance ministers looking for someone else to blame. In fact, oil was above $140 a barrel in early 2008, much higher than it is today in real terms, without causing a surge in inflation. Gas supplies from Russia are an issue, but that is only a relatively minor component of the overall rise in prices. The real explanation is that we shut down our societies.
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Remember this is all happened under a so called “Conservative” Government. At least with Corbyn we would have had a man of courage and principal.
A sense of humour can sometimes help, as you have just demonstrated.
Although the downticks suggest some people don’t have one.
We’d also have had opposition.
Essentially, Kim Jong Johnson implemented the agenda of Jeremy Corbyn for him.
Yes, so clearly shown by the occasions on which J Corbyn and other ‘old left’ MPs from Labour voted against lockdown … joining D Davis, D Swayne, etc in the anti-government lobby.
They were voting against lockdowns to discredit Boris, not because they were against lockdowns.
I’m sure you may suspect this, but you can’t know it.
Nope. I KNOW.
https://twitter.com/jeremycorbyn/status/1346191752030519305?lang=en-GB
With Corbyn you would have had the same exact thing, best case scenario. Except that even in the best case scenario, you’d be living under socialism.
But the more realistic outcome is that it would have been much, much worse. Labour has always wanted to increase taxation to support social programs. Would you have liked to have 10-15% higher taxes on top of 8-10% inflation?
But they are , or soon will be. The fiscal drag continues, national insurance up, more tax hikes planned I’m sure, IR35 legislation implemented very badly and oh a pay rise for those implementing this. How else can you pay for the last two years and continued unrelenting splurge by an economic illiterate? Johnson has no morals and no money, but he carries on in bold Ceacescu fashion. Let’s hope he ends up same way, if there is any justice.
“Except that even in the best case scenario, you’d be living under socialism”
Compared to approaching corporate fascism and genocide? I’d like some better choices. Thought Johnson would be ok. Something happened while he was ill or maybe not ill?
Haha. I love cutting edge satire. This all happening under the WEF.
I wonder if Corby would have thrown the working classes under the bus as easily as Bunter did.
The lockdown would have been the same or worse but carried out by a man of “courage and principle.”
The ‘Bullseye’ principle at work:
Look what you could’ve won.
Thanks – I needed a laugh.
It was predicted and fully predictable. Labour were complicit in this madness. The economic fallout was obvious as many a commentator predicted. Peter Hitchens for example. Back to stating the bleeding obvious.
Is that the courageous and principled man who pretended to be a Remainer.
He was just revealing his inner thespian.
I know that Jezza has probably stashed some cash somewhere, but I’m sure he’d prefer that we believe that he values his principles over his principal.
And that’s using the prices of a basket of goods and services that’s updated once a year, based on what were buying two years ago.
When you can’t afford to heat your home or fill your car, I doubt if you’ll be buying as many free trade organic avocados, or queuing up at some celebrity chef franchise to pay them £50 to spit on a lollo rossa leaf.
Since the price index only cares about the sticker price, not volume, this hide a much higher rise in the minimum basic cost of living by pretending that we’re still buying luxury goods as well.
I’m usually the first to say “Are there no workhouses?” but millions of actual working people are going to get bumped from “just getting by” down to genuine penury.
And some people want to increase taxation even more because in their mind that money can be used to help the poor. But what they don’t realize is that by increasing taxation not only do you make more poor than you can help, but you are also killing the economy, leading to even less tax revenue. Socialists are clueless about the economy. I suppose that if they had a clue about it, they wouldn’t be socialists.
You fine speeders to stop them going so fast
Income tax fines people for working.
Indeed, try explaining the Laffer Curve to a socialist.
You are wrong. The RPI is more sophisticated than you suggest.
Of course lockdown restricted supply and furlough inflated demand.
Of course this was entirely predictable.
And that idiot Johnson just a few days ago was priming us for more of the same. This is the age of planetary insanity.
I have given up on the human race.
That’s just what they want you to do – to become a trans human.
New World Order and the Reset.
oh do keep up DS. It’s “Putin’s Price Hike” according to the Whitehouse pResident.
And Dozy Pelosi calls it The Poot’n Effect
The Bidenflation?
Not one denunciation of Trudeau or for that matter China, all about Ukraine and forgetting last two years. Neither cabinet nor parliament in general care about democracy or the economy. The people? They loathe us.
I’m sure inflation hasn’t been manipulated downwards by using the magical basket of goods🤣
House prices were removed from the inflation basket in 2004. Thank you ” no more boom and bust
1992 interest rate was 6.875%
Lockdown didn’t help, but the Bank of England are the real culprit with their moronic money printing operations. Now, they’ve painted themselves into a corner. They have the choice of 1) crash the economy via much higher interest rates – which in real terms are ridiculous at minus 6.25%, or 2) let inflation take hold and give us Zimbabwe style price increases, where a loaf of bread topped out at Z$10 million.
“Lockdown didn’t help, but the Bank of England are the real culprit with their moronic money printing operations.”
Good job that isn’t what they did then isn’t it.
Removing Gilts at 3% and replacing them with reserves at 0.5% reduces the amount of money paid to banks. At least for anybody who can do percentages.
That’s deflationary.
A reduction of 10% inflation to 8% is still inflationary.
And the cash that replaced the gilts came from where exactly?
The government needs to:
If they start doing those things, it will get better. If not, ruin awaits.
Jeez they want to remove money from an over inflated economy not turn us into Zimbabwe!!
It’s too late for that. This inflation isn’t caused by people having too much money. It’s caused by the government printing money like crazy over the past two years.
When the people have too much money, it doesn’t lead to inflation. Or, at the very least, not the bad kind of inflation. It least to a booming economy.
Yes people may employ other people…
Especially if they can keep most of it with income tax cuts.
In 1920, in the US, the tax rate for people making over $100,000 was around 73%. These people were paying about 30% of all taxes. By 1930 the tax rate was cut to 24%. The people making over $100,000 were now paying about 65% of all taxes.
The rich get to be rich by investing, not by keeping money in the bank. This is something most people don’t understand because most of us don’t have the mindset to be rich. When you get an influx of money we store it in a bank. When the rich get an influx of money, they invest it. And those investments create more jobs and more revenue.
The only way to tax the rich more is by lowering their taxes, ironically.
It certainly helps your investment prospects when you control where the government money spigot is about to start dumping cash 😉
The main problem is rent-seeking there’s far too many people with entitlements based on fining people for creating wealth or making sure the government stops competition for them via pointless regulatory hoops.
All utterly foreseeable in March 2020, even by this non-economist. The Government were/are therefore either utterly incompetent, or determined to drive the economy into the ground for some ulterior motive. Either way they do not serve the interests of the country, or of the world (unless you count those rackets beginning with “World…” such as “World Bank,” “World Economic Forum,” “World Health Organisation” and so on).
We’re past coincidence and happenstance. It’s the other option.
My personal opinion is to give people a false excuse for being impoverished and therefore get away with the thievery.
If the banks gone bust you won’t expect your money back…
Those were my very first thoughts at the time, realising that the risks posed by Covid were not great.
It seemed to me that consumer credit was maxing out and the intention was to get governments into debt. What a wonderful job they did too.
Yes it was obvious to me too. When it was announced that we’d all be staying home for three weeks, my first thought was bank holidays. I’m sure that the main reason the Gov gave for not declaring St Georges Day a new BH was that it costs the economy too much – £2.3bn. And we were going to get 15 of them in a row!!! Seemed bananas to me.
When many supermarket prices have gone up over 10%, fuel prices over 10% and energy prices have doubled it’s somewhat difficult to believe the official figures.
Can’t exactly blame lockdown for 20+ years of believing that unicorn farts will power a modern energy grid.
Quote for replacement of our roof gone up 50% since last May. I understand that’s typical in building trade
Inflation is complete and utter load of “place to put oars on a rowing boat”
The problem was that nobody was able to spend their money on anything during the lockdown phase, and that piled up as personal savings. However it was loose savings which were deployed as soon as they were able by people trying to catch up with their lives. However our economy hasn’t the amount of spare capacity to handle people spending that level of savings, particularly with two years of rust on the enginery. Furlough didn’t help. It was too generous, and should have been just the living wage paid directly to anybody laid off or on short time. Now, unfortunately, we need to put taxes up to generate the necessary levels of unemployment to cap inflation. But our politicians are too weak to do that. They are hoping instead that the Bank of England will do it via interest rate rises. But it turns out they don’t really work any more – because we now have fixed interest mortgages and term extensions due to the increase in the State Retirement age. Plus the rich, who receive the interest mortgage payers pay, want to spend their cash as well. We’re also too spineless to send troops to Ukraine. Instead we’re going… Read more »
Interest rate rises dont work? Put them up 500 basis points and you’ll see them work then.
Raise taxes? Generate unemployment? Are you insane? People have no money to pay for energy. Pretty soon they won’t have money to pay for food. And you want to take away even more of their money and leave them in the street without a job? That is the most demented take on the economy I have ever seen. People have been buying food all throughout lockdown. It’s not like started buying even more food now, so that doesn’t explain the increased costs. This is all driven by the extremely high fuel prices, which generate a cost at every single stage in a product’s life, from before it even gets planted to well after you’re done eating it. The absolute worst thing the government can do right now is increase taxes, plunging even more people below the water line, triggering waves of redundancies, people ending up on the street because they can’t pay rent, people starving, people freezing in their homes. What the government needs to do is cut taxes, so that people have more money to spend, kickstarting the economy, creating more jobs, and increasing tax revenue. Yes, cutting taxes increases revenue because people spend more and are not trying… Read more »
He’s a MMT wockcomble.
Don’t expect any sense!
No, he’s no believer in MMT. MMT economists would argue that for countries with their own sovereign currency such as the UK, the purpose of taxation is not to fund government spending, but for other purposes such as making the populace need the currency or for reducing the political power of the very rich but not because the state needs their money. They would argue that central government is just like the scorer in a sports game who can never have too many or too few points, and can never run out of them.
Utter garbage.
This may be semantics, but ‘lockdown’ is not an agent that can be blamed or can be culpable. It is those who imposed it who must shoulder blame. Otherwise axes would be to blame for murders by crazed axemen.
a large number of MSM article state the gun killed someone especially when they want to leave out any melanin attributes of society-to-blame-really gun pointer
It will hit 10%, I am sure. The cost of food is going to go through the roof come this autumn, when the crops start coming in after being farmed under extremely expensive fuel costs. If there ever was a time to start growing your own food, this is it.
Russia is a major supplier of fetiliser. Without that you’ll be lucky to get food at any price
Dont forget the price of fertiliser has quadrupled….
It looks like economic planned demolition to me.
Second paragraph says it all. Of course no-one saw that coming. We had to do it. Lol.
But who do you think have, are and will get the blame.
Covid itself, – it’s a fact now that covid causes inflation as well as increased heart problems.
Brexit – always a good scapegoat or should I say those pesky Europeans
Russia.
Putin.
The infrastructure necessary to combat “climate change”
Oh, and by the way while the sheep whine about inflation, maybe they forget the million +?unnecessary infant deaths caused by the insane/calculated covid responses in the so called third world countries.
This was being predicted and warned about as far back as ‘three weeks to flatten the curve‘ but those who endlessly cautioned that government lockdowns would do more harm than good and that they cannot simply continue to keep switching the economy on and off like a lightswitch without consequences and have millions upon millions of workers paid to stay at home on furlough by borrowing £300billion to fight a virus that was about as deadly as seasonal flu were all dismissed as cranks, killjoys and covidiots.
You didn’t have to be a rocket scientist to see this coming and now the chickens are now certainly coming home to roost.
Chickens with ‘bird-flu’, diagnosed using a PCR test…
Déjà vu? 🤔
https://off-guardian.org/2022/04/11/bird-flu-another-phony-pandemic-this-time-for-chickens/
https://www.thelastamericanvagabond.com/bucha-missile-fired-from-ukraine-uk-hides-vaccine-efficacy-data-great-bird-flu-pandemic/
The cause, says Lynn, is lockdown. Not quite. The cause is Klaus Schwab’s WEF and his neo-feudalist global cartel. Lockdown was just one of their tools.
It doesn’t matter because the Tories chums have had £hundreds of billions stuffed into their pockets paying for all the useless covid crap and that is all those in power care about.
Nothing to do with Covid. Everything to do with the huge increase in money supply for many many years.
Thieving government scumbags. thieving government filth, scum.
Mark Steyn was saying that in Sweden, inflation was only 4.5$. Coincidence?
Lockdown plus carbon zero.
Don’t forget the mythical climate crisis.
Every problem we currently face in the UK is caused by politicians.
And this, precisely, is why Johnson is swanning around Ukraine, distracting the MSM in a war that’s not in our national interest.
From some of the comments this issue appears to be polarised between ‘left’ and ‘right’ as if the choice is either one or the other. This is divide and rule between decent people who should be generally united in principle. I’m sure both sides agree that the ultimate issue is excessive money printing which occurred during lockdown, (but was occurring before lockdown to a lesser extent and could in time become critical). Fight the system and not each other!
Indeed – the shoel Covid narrative and all the shit that’s flowed from it has broken the concept of left/right. The way the left has become obsessed with wokery as opposed to real-world problems doesn’t help either.
Toby Young and the Daily Sceptic have kept me sane and I suspect countless others during this Scamdemic. I remember, walking into my office in January 2020 and saying ” They are trashing the economy for the flu “. It’s not a nice feeling to be vindicated.
Yes, wrt the DS, BUT TY is making me very mad!
Indeed.
How can you pause an economy?
It was only for 2 weeks…
WE could have been like Sweden ….. if Johnson and Sunak had stood up to the Health Fascists. They used OUR Pandemic Plan which he scrapped in favour of copying China.
Say as it is. SAGE and Johnson responsible for 7 % inflation
£1 trillion on Lockdown and now Bojo ‘helping’ his mate to the tune of £450 million in weapons of tax payers money.
Reading this, and watching Toby Young in two GB News interviews this week, I’m just astonished that the penny hasn’t dropped. Toby’s conviction – and his writers’ conviction – that the lockdowns were/will be about “the virus” just astounds me. At the risk of being labelled a “conspiracy theorist” I do not believe for a second that lockdowns are about any virus, but about controlling us, and not for the purpose of researching a temporary social experiment but for the purpose of changing the way we are governed, permanently (with the key side effect of reducing the population – enter the “vaccines”). Why don’t I mind being labelled a “conspiracy theorist”? Because to date, the alleged conspiracy theories have all come true, starting with “three weeks to flatten the curve” – the Lie of the Century. Toby’s belief that, now caught breaking the rules himself, Boris won’t be able to enforce another lockdown, is a nice thought but – as I say – misses the point. Boris (like every other “leader”, Trudeau, Sturgeon et al) is a mere puppet. Whoever is the real puppeteer(s) is debateable but they are taking orders from on high and the puppeteers have not give… Read more »
Thanks to the Cabal…. The politicians & Billionaires who Conspired Against the people. Lockdown wasn’t at Fault!! THEY were
Lockdown??!!
Perhaps the now standard response to every crisis is responsible; money printing and low or negative interest rates.
Inflation was planned by the billionaires as an intrinsic part of their latest heist. Most people haven’t seen inflation if they are under 45, so won’t know how to manage their finances to deal with it. The billionaires do, so they will be simply stealing from the innocent, when they don’t need a single penny more for the whole of the rest of their lives.