The 3.5% Inflation Spike is All on Reeves
This morning’s unexpected spike in inflation to 3.5%, up from 2.6% last month, is all on Rachel Reeves and her economically illiterate tax rises and broader economic policies, says Ross Clark in the Spectator. Here’s an excerpt.
There is no positive spin to be put on this morning’s inflation figures, which show the Consumer Prices Index (CPI) rising from 2.6% to 3.5% in a single month. If you want to do the trick of stripping out energy and food prices to arrive at so-called ‘core’ inflation (how you can have a cost of living index which excludes two of the biggest costs faced by households defeats me) the picture is even worse – core inflation is even higher, at 4.5%.
If you want to use the Government’s preferred measure, CPIH, which includes an element of housing costs, then that too is higher than CPI, at 4.1%. Housing costs, energy costs, food, transport – all are going up – with just a small drop in prices of clothing and footwear, and furniture. Top of the list for price increases, unsurprisingly, is education. Private schools have jacked up their fees for the new term as a result of the introduction of VAT on school fees.
Last month, the CPI came in surprisingly low, giving Rachel Reeves an unexpected boost. March’s figure, however, is now looking like a downwards blip. What is so damaging to the Chancellor is the clear link between inflation and her policies. Many businesses have warned that they would have to increase prices in reaction to the increase in Employers’ National Insurance (NI) – and so they have.
The NI changes are particularly harsh on businesses which employ large numbers of part-time workers: the threshold at which NI becomes payable has fallen from £9,200 to £5,000, drawing many more people into the net. It just so happens that many of the businesses which do rely on part-time workers – namely retailers – have direct influence over prices paid by consumers.
The Bank of England has been useless again, notes Ross. Just as in May 2021 it predicted inflation wouldn’t go above 2% before it shot up to 11%, the bank’s Monetary Policy Committee cut rates again this month ahead of the new inflation spike. So much for the ‘experts’.
Worth reading in full.
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Unexpected?!?
AbsolutelyNot
Longer term our economic performance would have been much better without the following, all of which were more or less enthusiastically supported by all the Uniparty parties:
Mass immigration of lower quality human capital
Huge welfare state
High taxes funding bullshit unproductive state activity
Lots of expensive wars/military interventions that did more harm than good
High energy prices caused by deliberate government policies
Half a trillion spent on “covid”
Money shovelled to the EU
Of course none of this has been planned tof it’s just that since 1997 we have had a succession of PM’s and administrations that have found better wages elsewhere but the price of their subservience has been to dismantle and eviscerate Great Britain. Unfortunately for us these traitors CGAF and have got stuck in to their respective tasks with relish. The finishing post – 2030 – is in sight and large Brucie Bonuses are on offer for a completed job and Kneel’s mob are hungry for success. They are after all in the last chance saloon.
1997? November 1990 I think.
Yet the MSM parrot that it’s due to the 22 Billion black Hole Reeve’s found, unexpectedly.Lol.
MSM etc. strangely silent re the half a trillion spent on “covid”.
No problem with that though as it was ok’d/ordered by The RPTB – just to screw 99.99999% of us plebs even further.
Just refuse to pay them as one country did in the 1920’s, – didn’t end well, but if all indebted countries did it now…..?
Yes! And because it’s all being paid for with printed money.
It’s “Trump’s Tariffs” wot done it, I tell you! All my friends say it is!
Write out one million times: it is monetary inflation caused by too much non-value backed money being pumped into the economy chasing too few goods.. which causes price inflation… which in turn causes wage inflation.
The Government with its supposed £22 billion hole, is borrowing money to pay for the bribes offered to public sector workers and union cronies, to pay for the 100 year Ukrainian Reich… something, to pay for the increasing expense of illegal immigrants, to fund the welfare of the ten million “legal” immigrants, to fund the £billions hissed away on futile attempts to find solutions to the problems created by Net Zero, money for the EU, and “investment”.
Taking money out of the economy in taxes reduces economic activity, pumping money in increases inflation which in turn reduces economic activity.
However… tough, necessary choices have been made, things are getting better it’s your lying eyes deceiving you, and we need to deliver quicker. And in any case everything is the fault of the previous Tory Government.
K’inell. Bet you were bad a skool. A million lines?
A million lines was for minor infractions.
The industrialists of the white hot age of the industrial revolution would be spinning in their graves if they saw that we are no better than them. Yes, they brought in mechanisation but their machines also needed the fields and villages to be sucked dry of people to work the equipment. Two hundred years on and we are sucking in low paid workers from around the world to do even more manual work. Crops planted and picked (even the French have machines to pick grapes!), food all produced manually in factories with barely a conveyor belt as a sign of automation and finally the grandest joke of them all, dozens and dozens of nearly always empty coffee shops staffed by minimum wage immigrants. Is it any wonder our GDP per capita plunges year in year out and the tax payer spends more and more subsidising low paid and part time work.
I can assure you mechanisation is alive and very well indeed in the factories I’ve visited – many, many less employees than say 20-30 years ago, producing more stuff.
Coffee shops are an interesting example though – it’s always shocked me how inefficient the whole barista process is – all that double handling, repeatable processes. I’m convinced it’s all for theatre really, and largely automated ‘push button’ coffee machines that can grind real beans have been around for a good while now.
You are right of course and heavy end factories that I visited in the early 1980s look nothing like the factories of today. My gripe is with the production lines that have remained dependent on large numbers of mainly low paid immigrant labour and seem to have done nothing to automate the process. No problem with artisan manufacturers being labour intensive but surely we should have been able to invent equipment to pick and place even delicate food items rather than relying on low wage production.
Quite correct – with cheap labour available why bother investing in automation. A good example is do not invest in car wash machines. Nobody would bother installing one these days as the immigrants do it at closed petrol stations or supermarket car parks. So we now have a high headcount for car washing which produces a low output per head.
You cannot raise energy and fuel prices to such a level and expect to balance the books, as this drives all other costs.
Too late to give back to the pensioners as by the winter the energy prices will have risen yet again and the standing charges higher still.
Be interesting to see where next for the July price cap announced next week.
It was obvious to anyone with a few functioning brain cells that her budget was going to lead to stagflation.
So I concluded it was deliberate.
Or that Rachel from Accounts has no experience or capability as an economist.
Beneath the headline of inflation is a rise in services costs by 0.7% to add to the woes of Rachel The Inept.