So what ?
This is happening – and necessary – because the B of E simply didn’t do it’s job for the last15 years. They specifically had one target – 2% inflation – and repeatedly ignored this because they decided it was more important to “avoid a recession”/”support the economy”/prop up inflated house prices.
They had one job. They repeatedly failed. And yet no one ever got fired or resigned.
We are paying for that now. And rightly so. The cumulative bill for the pain we’ve ducked for 20-30 years is finally falling due.
The really sad thing is those who will pay the bill are largely a generation younger than those who ran off with the loot.
And can we please get away from this puerile nonsense that recessions are “bad” and must be avoided at all costs. They help clean all the dross out of the economy and reset things from greater efficiency and growth. Bad businesses have to fail if we want higher growth.
Problems don’t just go away because you pretend they don’t exist. The UK has always had a problem with inflation that we never properly addressed. We just got away with it for the last 25 years by the lucky accident of importing cheap labour and the arrival of cheap Chinese manufacturing. Those drugs have now worn off.
Peter B
11 months ago
So what ?
This is happening – and necessary – because the B of E simply didn’t do it’s job for the last15 years. They specifically had one target – 2% inflation – and repeatedly ignored this because they decided it was more important to “avoid a recession”/”support the economy”/prop up inflated house prices.
They had one job. They repeatedly failed. And yet no one ever got fired or resigned.
We are paying for that now. And rightly so. The cumulative bill for the pain we’ve ducked for 20-30 years is finally falling due.
The really sad thing is those who will pay the bill are largely a generation younger than those who ran off with the loot.
And can we please get away from this puerile nonsense that recessions are “bad” and must be avoided at all costs. They help clean all the dross out of the economy and reset things from greater efficiency and growth. Bad businesses have to fail if we want higher growth.
Problems don’t just go away because you pretend they don’t exist. The UK has always had a problem with inflation that we never properly addressed. We just got away with it for the last 25 years by the lucky accident of importing cheap labour and the arrival of cheap Chinese manufacturing. Those drugs have now worn off.
Matt M
11 months ago
Not sure about this analysis. You can see exactly the same 0.4% spike in 10Y US Treasury Notes not to mention Canadian, French and Australian bonds. All started on 15th May. Almost certainly related to the debt ceiling negotiations in Washington.
As for recessions, I see the Germans are in recession while the UK isn’t. This is despite the widely published IMF forecast that Britain would be the weakest economy in the EU.
Valid points MM. We are not alone, albeit our GDP still lags others recovery from pre-pandemic, and our inflation a bit higher. Suggestive we have some unique issues.
Leaving the obvious Brexit to one-side, the issue seems to be more unique labour market issues. Not just strikes etc, I mean France got that with knobs on too, but labour shortages in key areas which could ratchet in wage-pull inflation here much more invidiously. Multiple drivers of course, but not quickly resolved. One worries the international markets see that, and tackling it likely push us into recession.
Others have issues too. US looks likely to hit recession late 23, but probably comes out fairly quickly afterwards. Germany clearly got problems too as noted.
Valid points MM. We are not alone, albeit our GDP still lags others recovery from pre-pandemic, and our inflation a bit higher. Suggestive we have some unique issues.
Leaving the obvious Brexit to one-side, the issue seems to be more unique labour market issues. Not just strikes etc, I mean France got that with knobs on too, but labour shortages in key areas which could ratchet in wage-pull inflation here much more invidiously. Multiple drivers of course, but not quickly resolved. One worries the international markets see that, and tackling it likely push us into recession.
Others have issues too. US looks likely to hit recession late 23, but probably comes out fairly quickly afterwards. Germany clearly got problems too as noted.
Matt M
11 months ago
Not sure about this analysis. You can see exactly the same 0.4% spike in 10Y US Treasury Notes not to mention Canadian, French and Australian bonds. All started on 15th May. Almost certainly related to the debt ceiling negotiations in Washington.
As for recessions, I see the Germans are in recession while the UK isn’t. This is despite the widely published IMF forecast that Britain would be the weakest economy in the EU.
Last edited 11 months ago by Matt M
Caradog Wiliams
11 months ago
This article shows only that Economics is an art, not a science – despite the plethora of figures in the various theories and projections.
Caradog Wiliams
11 months ago
This article shows only that Economics is an art, not a science – despite the plethora of figures in the various theories and projections.
Nicky Samengo-Turner
11 months ago
Of more, and added concern is the comment by Britain’s largest gilt purchaser at the long end Legal and General ( Itself a raid/ takeover target now due to a woefully low share price) that it will long be buying more long dated gilts, due to ” uncertainty. Aside from a heap of ” pot calling kettle black” , we are back near the Callaghan times when the then gilts brokers and institutions effectively used their power to rid us of a Labour government in crisis.
We now have a socialist Callaghan equivalent government under a Tory banner, and a broken dysfunctional country worse than 1979,
There are , or would be, simple solutions, such as non gilt long term quasi government bonds to fund health/ infrastructure, but the above show that faith in the government AND The Bank of England and HM Treasury has gone.
The quality of personnel in both is low grade, quasi politicised, and underpaid, in stark contrast to those in the US equivalents.
Whilst politicians maintain a gutless ” keep my job at any cost” devoid of moral courage, belief, sense of duty, we will continue our plunge to being a sub Saharan African country look and live alike. A tragic disgrace.
Can’t disagree.
If you think LGEN (Legal and General) is undervalued, buy the shares. It certainly was in March 2020 after Covid bombed the stock market. 8.5% dividend yield either means it still is or something nasty’s about to happen (it was 15% in March 2020). [Not offering financial advice and you’d be unwise to take it from me].
Yes, when you have Hunt the socialist Chancellor saying “Recession? yes please anything to bring down inflation” you know we are in trouble. It hasn’t concerned him that recessions create unemployment / higher benefit costs and reduce income from Business taxes.
Can’t disagree.
If you think LGEN (Legal and General) is undervalued, buy the shares. It certainly was in March 2020 after Covid bombed the stock market. 8.5% dividend yield either means it still is or something nasty’s about to happen (it was 15% in March 2020). [Not offering financial advice and you’d be unwise to take it from me].
Yes, when you have Hunt the socialist Chancellor saying “Recession? yes please anything to bring down inflation” you know we are in trouble. It hasn’t concerned him that recessions create unemployment / higher benefit costs and reduce income from Business taxes.
Nicky Samengo-Turner
11 months ago
Of more, and added concern is the comment by Britain’s largest gilt purchaser at the long end Legal and General ( Itself a raid/ takeover target now due to a woefully low share price) that it will long be buying more long dated gilts, due to ” uncertainty. Aside from a heap of ” pot calling kettle black” , we are back near the Callaghan times when the then gilts brokers and institutions effectively used their power to rid us of a Labour government in crisis.
We now have a socialist Callaghan equivalent government under a Tory banner, and a broken dysfunctional country worse than 1979,
There are , or would be, simple solutions, such as non gilt long term quasi government bonds to fund health/ infrastructure, but the above show that faith in the government AND The Bank of England and HM Treasury has gone.
The quality of personnel in both is low grade, quasi politicised, and underpaid, in stark contrast to those in the US equivalents.
Whilst politicians maintain a gutless ” keep my job at any cost” devoid of moral courage, belief, sense of duty, we will continue our plunge to being a sub Saharan African country look and live alike. A tragic disgrace.
Billy Bob
11 months ago
Pilkington talking up the demise of a western nation? Surely not!
Billy Bob
11 months ago
Pilkington talking up the demise of a western nation? Surely not!
So what ?
This is happening – and necessary – because the B of E simply didn’t do it’s job for the last15 years. They specifically had one target – 2% inflation – and repeatedly ignored this because they decided it was more important to “avoid a recession”/”support the economy”/prop up inflated house prices.
They had one job. They repeatedly failed. And yet no one ever got fired or resigned.
We are paying for that now. And rightly so. The cumulative bill for the pain we’ve ducked for 20-30 years is finally falling due.
The really sad thing is those who will pay the bill are largely a generation younger than those who ran off with the loot.
And can we please get away from this puerile nonsense that recessions are “bad” and must be avoided at all costs. They help clean all the dross out of the economy and reset things from greater efficiency and growth. Bad businesses have to fail if we want higher growth.
Problems don’t just go away because you pretend they don’t exist. The UK has always had a problem with inflation that we never properly addressed. We just got away with it for the last 25 years by the lucky accident of importing cheap labour and the arrival of cheap Chinese manufacturing. Those drugs have now worn off.
So what ?
This is happening – and necessary – because the B of E simply didn’t do it’s job for the last15 years. They specifically had one target – 2% inflation – and repeatedly ignored this because they decided it was more important to “avoid a recession”/”support the economy”/prop up inflated house prices.
They had one job. They repeatedly failed. And yet no one ever got fired or resigned.
We are paying for that now. And rightly so. The cumulative bill for the pain we’ve ducked for 20-30 years is finally falling due.
The really sad thing is those who will pay the bill are largely a generation younger than those who ran off with the loot.
And can we please get away from this puerile nonsense that recessions are “bad” and must be avoided at all costs. They help clean all the dross out of the economy and reset things from greater efficiency and growth. Bad businesses have to fail if we want higher growth.
Problems don’t just go away because you pretend they don’t exist. The UK has always had a problem with inflation that we never properly addressed. We just got away with it for the last 25 years by the lucky accident of importing cheap labour and the arrival of cheap Chinese manufacturing. Those drugs have now worn off.
Not sure about this analysis. You can see exactly the same 0.4% spike in 10Y US Treasury Notes not to mention Canadian, French and Australian bonds. All started on 15th May. Almost certainly related to the debt ceiling negotiations in Washington.
As for recessions, I see the Germans are in recession while the UK isn’t. This is despite the widely published IMF forecast that Britain would be the weakest economy in the EU.
Valid points MM. We are not alone, albeit our GDP still lags others recovery from pre-pandemic, and our inflation a bit higher. Suggestive we have some unique issues.
Leaving the obvious Brexit to one-side, the issue seems to be more unique labour market issues. Not just strikes etc, I mean France got that with knobs on too, but labour shortages in key areas which could ratchet in wage-pull inflation here much more invidiously. Multiple drivers of course, but not quickly resolved. One worries the international markets see that, and tackling it likely push us into recession.
Others have issues too. US looks likely to hit recession late 23, but probably comes out fairly quickly afterwards. Germany clearly got problems too as noted.
Valid points MM. We are not alone, albeit our GDP still lags others recovery from pre-pandemic, and our inflation a bit higher. Suggestive we have some unique issues.
Leaving the obvious Brexit to one-side, the issue seems to be more unique labour market issues. Not just strikes etc, I mean France got that with knobs on too, but labour shortages in key areas which could ratchet in wage-pull inflation here much more invidiously. Multiple drivers of course, but not quickly resolved. One worries the international markets see that, and tackling it likely push us into recession.
Others have issues too. US looks likely to hit recession late 23, but probably comes out fairly quickly afterwards. Germany clearly got problems too as noted.
Not sure about this analysis. You can see exactly the same 0.4% spike in 10Y US Treasury Notes not to mention Canadian, French and Australian bonds. All started on 15th May. Almost certainly related to the debt ceiling negotiations in Washington.
As for recessions, I see the Germans are in recession while the UK isn’t. This is despite the widely published IMF forecast that Britain would be the weakest economy in the EU.
This article shows only that Economics is an art, not a science – despite the plethora of figures in the various theories and projections.
This article shows only that Economics is an art, not a science – despite the plethora of figures in the various theories and projections.
Of more, and added concern is the comment by Britain’s largest gilt purchaser at the long end Legal and General ( Itself a raid/ takeover target now due to a woefully low share price) that it will long be buying more long dated gilts, due to ” uncertainty. Aside from a heap of ” pot calling kettle black” , we are back near the Callaghan times when the then gilts brokers and institutions effectively used their power to rid us of a Labour government in crisis.
We now have a socialist Callaghan equivalent government under a Tory banner, and a broken dysfunctional country worse than 1979,
There are , or would be, simple solutions, such as non gilt long term quasi government bonds to fund health/ infrastructure, but the above show that faith in the government AND The Bank of England and HM Treasury has gone.
The quality of personnel in both is low grade, quasi politicised, and underpaid, in stark contrast to those in the US equivalents.
Whilst politicians maintain a gutless ” keep my job at any cost” devoid of moral courage, belief, sense of duty, we will continue our plunge to being a sub Saharan African country look and live alike. A tragic disgrace.
Can’t disagree.
If you think LGEN (Legal and General) is undervalued, buy the shares. It certainly was in March 2020 after Covid bombed the stock market. 8.5% dividend yield either means it still is or something nasty’s about to happen (it was 15% in March 2020). [Not offering financial advice and you’d be unwise to take it from me].
Yes, when you have Hunt the socialist Chancellor saying “Recession? yes please anything to bring down inflation” you know we are in trouble. It hasn’t concerned him that recessions create unemployment / higher benefit costs and reduce income from Business taxes.
Can’t disagree.
If you think LGEN (Legal and General) is undervalued, buy the shares. It certainly was in March 2020 after Covid bombed the stock market. 8.5% dividend yield either means it still is or something nasty’s about to happen (it was 15% in March 2020). [Not offering financial advice and you’d be unwise to take it from me].
Yes, when you have Hunt the socialist Chancellor saying “Recession? yes please anything to bring down inflation” you know we are in trouble. It hasn’t concerned him that recessions create unemployment / higher benefit costs and reduce income from Business taxes.
Of more, and added concern is the comment by Britain’s largest gilt purchaser at the long end Legal and General ( Itself a raid/ takeover target now due to a woefully low share price) that it will long be buying more long dated gilts, due to ” uncertainty. Aside from a heap of ” pot calling kettle black” , we are back near the Callaghan times when the then gilts brokers and institutions effectively used their power to rid us of a Labour government in crisis.
We now have a socialist Callaghan equivalent government under a Tory banner, and a broken dysfunctional country worse than 1979,
There are , or would be, simple solutions, such as non gilt long term quasi government bonds to fund health/ infrastructure, but the above show that faith in the government AND The Bank of England and HM Treasury has gone.
The quality of personnel in both is low grade, quasi politicised, and underpaid, in stark contrast to those in the US equivalents.
Whilst politicians maintain a gutless ” keep my job at any cost” devoid of moral courage, belief, sense of duty, we will continue our plunge to being a sub Saharan African country look and live alike. A tragic disgrace.
Pilkington talking up the demise of a western nation? Surely not!
Pilkington talking up the demise of a western nation? Surely not!