The IMF slashed its forecast for the UK economy this year from growth of 0.2 per cent to a contraction of 0.4 per cent. The fund now expects growth of 1.1 per cent next year, down from an estimate of 1.4 per cent.
Cameron, Clegg, Osborne, King. This is their fault. Sack them.
So here we are, with many of the world’s larger economies facing difficulty, with high unemployment common across the rich world, with financial conditions deteriorating, and with political systems paralysed. Markets are fleeing into the few assets that look safe, commodity prices, equities, and currency movements are all indicating a large and sustained drop in demand expectations. And the world’s most important central bankers are confused over whether or not to act out of concern over inflation and seeming terror that inflation might ever rise to and stay for a while at, oh, 3%. They seem horrified by the idea that central banks might—might—need, at some future point, to bring inflation expectations back into line, as they did in the early 1980s. Never mind, of course, that the experience of the early 1980s was a sunny day in the park compared to what the rich world has gone through since 2008, and heaven compared to what might loom ahead.
We’re making the same mistakes again. And by we, I mean them. And by making mistakes I mean causing catastrophic suffering. Our Central Bankers have failed us just as badly as those of the 1930s failed. Worse even, when you consider that our Lords of the Universe had the mistakes of the Lords of the Universe of the 1930s to learn from.
So remember, buy bunting, your spending is someone else’s income, its all you can do. Have a nice weekend.