Don’t be poor
Strange times. China’s inflation rate zooms on through their own target range of 3 per cent to 3.6 per cent. The country’s growth rate slows from a first quarter rate of 11.9 per cent, a second quarter of 10.3 per cent, to today’s’ 9.6 per cent. It’s a result the ‘authorities’, wanted to see. But the inflation rate is not. It’s almost impossible to imagine what this set of financial circumstances heralds for us all in the future. If China catches a cold, a good number of us will die of flu, one senses.
But far from dying, Portugal, with one of the rockiest economies in Europe is seeing its borrowing costs falling rapidly. Even Spain and Greece are doing enough to bring their own bond issues in at lower costs. This is because they have been seen to taken dramatic and drastic domestic measures to sort their economies.
So its hard to see that the UK would have been wise to do yesterday much less than what it did.
That leaves the French on the streets over a pensionable age increase from 60 to 62. Mr Osborne yesterday brought forward to 2020 the time when women’s retirement age will rise six years to 66 , and men will come into line at the same age. In response, hardly a squeak from the Brits, a small straggle of demonstrators in Whitehall the only UK protest burp of any note.
The least emphasised consequence of the UK cuts is the effective demolition of Eric Pickles Communities Ministry(70%+ cut), which used to have responsibility for housing. The housing benefit cuts, and the active desire to force some social housing tenants to move out of some housing areas speak of the prospect of an escalating house building crisis. The Chancellor spoke of raising social housing rents and using the moneys to build 150,000 homes. It sounds a remote prospect. The UK is currently on track to build fewer than 100,000 homes this year. Higher up the housing chain the market is at a virtual standstill amid stalling bank lending.
The Bank of England has thrown £200 Billion into the ‘liquidity’ pool, where did it go?
It’s a very bumpy landscape. Make no mistake, we are living in some of the most uncertain economic times in half a century. It’s a particularly bad time to be poor. As yesterday’s Treasury graph shows, the poor are about to get a whole lot poorer.