The economic ‘recovery’ won’t hold till election next May

Fortunately for Osborne, Scotland is keeping the parlous state of the economy out of the news.   UK manufacturing export orders have now turned negative for the first time in nearly 2 years, dimming any expectations that manufacturing and exports would lead the way in any upsurge.   The immediate reasons blamed are the flagging Eurozone economy, the rise in geopolitical risks, and a stronger sterling exchange rate now recovering from the earlier panic about the Scotland vote.  The longer-term and much more disturbing reason is the crass neglect of manufacturing during and since the Thatcher era and the abandonment of regional policy after the de-industrialisation of the North.   What these latest figures show is that the recovery, such as it is, is wholly reliant on growth in financial services, since this is still the only sector which has exceeded its pre-crash peak.   Manufacturing remains in the doldrums still at 7% below its peak, and construction even deeper mired in stagnation at 10% below.

A further knock to the government’s wish (without any active policies to bring it about) to rebalance the economy are the latest July trade figures which reveal the trade gap widening remorselessly again.   The trade in goods deficit showed imports rising to £10.2bn over exports, the worst deficit in more than 2 years.   Even when services are included, the deficit still widened by a third to £3.3bn compared with the preceding month.   To put this in perspective, it means that the UK is now headed towards a deficit in traded goods this year of some £115bn, the largest ever and the peak so far of a rising curve in these deficits over the last 3 decades.  A continuing path of decline on this scale is simply untenable.

There is further alarming evidence that the UK economy is already slowing, even before nine-tenths of the population have even begun to feel its benefits.   The NIESR think-tank has just estimated that the economy grew by only 0.6% in the 3 months to the end of August, well below the over-optimistic predictions at the start of the year.   If wages continue to fall – and there is no increase in aggregate demand to turn that around – then even with only 8 months to the general election next May it is difficult to see how a deflating economy will not pull away the only remaining crutch on which Tory election hopes depend.

 

 

2 thoughts on “The economic ‘recovery’ won’t hold till election next May

  1. I have an old mate, in no way untypical or unrepresentative of a lot of other people in pretty much exactly the same boat in this country since the crash and this latest recession of 6 years ago, which has never really gone away and seems likely to be with us for foreseeable future no matter what kind of gobbledegook, (socialism caricatured and somehow denigrated as, “ benefit economics,” for example,) our callous, grasping, lying and generally despicable political low life try to posit as a solution.

    Some years ago he had to stop work to look after his dad who had dementia, a responsibility that often meant that he could scarcely venture out of the house, without being called back almost immediately because of his dad’s disoriented and sometimes hugely irrational behaviour, a harrowing and difficult situation which had persisted for several years.

    Last year his father who had been expected to live for many more years died prematurely under somewhat dubious circumstances arising from his, “care,” program which seems to have been designed to maximise the income of contracted provider first and possibly negligence or worse on part of the care home staff where his father was placed after being discharged from hospital.

    Despite having been diagnosed as being Bipolar himself, he was still disqualified from claiming ESA and has had to sign on, (OK as far as that goes fair enough although we’ve had a few frights and much worry about him over years in relation to that condition.)

    After an extended period of homelessness, (sleeping on peoples couches and worse,) he finally managed to get a flat, but has been so harassed by DW&P who have typically suspended benefits again and repeatedly, for no real or adequate reason until he has now lost his flat and is homeless once again, through no real fault of his own and despite making herculean efforts to find jobs, which exist only the fervid imaginations of DW&P.

    I asked him, what he thought the about the Scottish referendum, he said he couldn’t give a toss, I asked him what he thought about David Cameron, but unfortunately I can’t really print his reply; and Ed Milliband, exactly the same.

  2. with ossy and carney cooking the books it all looks rosie in the garden but along came a thorn in the side the scots and took their limelight away but their fiddled figures will affect the masses has they been using their mirrors to hide it all away but sadly the public will pay again for their debt they put us in jeff3

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