Recession made worse
The chancellor’s decision to raise taxes and do virtually nothing about the cost of living crisis is looking increasingly stupid. But I am afraid it does fit in with current Tory thinking.
This latest generation have since 2010 tried to fix the British economy by cutting spending. This doesn’t work, nearly every economist worth listening to knows and says this but this is a very idealogical government.
They hide it well but they are Thatcher’s children, they have completely misunderstood the lessons of Thatcherism but they genuinely believe that being nasty is actually being realistic. Slashing and burning the state is for them good news, they think benefits make people lazy and that massive hikes in food and energy bills mean we will all just have to work harder.
The result has been to create a lost decade of weak growth, low productivity and misery. The real problem is they are going to do it again.
A recession is coming because higher energy and food bills will suck spending power out of the economy. the obvious answer is a windfall tax to put spending money back into peoples’ hands and government spending to help the economy.
The chancellor may eventually come round to a windfall tax but increasing NI and taxes now is also amazingly counter productive and I see little prospect of him changing course on that.
That means a much deeper recession than necessary and another lost decade.
Sorry, it just does.
Economics, trade and Brexit, not necessarily in that order but the dog always comes first.