How bad will it get?
I had a lovely evening yesterday, meeting the new Chancellor of Keele University, James Timpson, along with many other Keele alumni and staff.
I was asked by someone how bad this recession would be, on a scale of 1-10 and said 6-7. One person thought that wasn’t too bad until I pointed out that normal recessions were 2-3. A loss of less than 2% of growth which is quickly recovered is very painful but this is different.
Today’s inflation figures mean that people who have struggled with low pay rises for years, but have coped because of low inflation and low borrowing costs, are now being crucified.
But on top of this there is also Brexit, tax rises, higher borrowing costs, unemployment and austerity, a policy that failed disastrously but will be tried again.
Making trade harder and ripping even more money out of the economy will make this a disastrous recession, but it is the recovery that is terrifying.
Growth of 0.8% a year for years is completely incapable of providing enough money to pay for the services we need from the state. Including defence which faces a 10% real term cut in just one year-not the 1/3rd increase promised a few weeks ago.
This Conservative government has totally failed to promote productivity, growth, training, infrastructure or trade for 12 years now.
This is the consequence, without real sustained high growth this is going to be grim, for years to come.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.
By Jonty Bloom Media