Making sense of the British Economy is hard at the best of times but during an election period where lies lurk in dark corners ready to pounce on the unwary, it is especially hard. There are four key statistics that have come out recently which give a good idea of what is happening and I shall let you have my take on them, free of any political bias.
Economic growth for the first quarter was only 0.2%. This is a very small number and is well within the margin of error. The growth was probably reduced because of the unusually hard winter that the United Kingdom experienced, but even taking that into account, the figure is hardly heartening.
The gross borrowing of the country now exceeds £163.4 billion. £25.5billion was borrowed by the government in March alone. This amounts to 62% of Gross Domestic Product, which has been in negative territory for eighteen months and, as you will have seen, is now only just (apparently) not declining.
Unemployment has reached 2.5 million people. In addition there are at least a million on part time work who want to be in full time work and a million apparently too sick to work and are paid by the rest of the taxpayers not to work.
Finally inflation has reached 3.4%. This is inevitable because the Government printed lots of money (they called it quantitative easing) and if you add to the supply the value of an individual measure of the supply falls.
What do these figures mean?
It is quite simple. We are spending more than we can afford and more than we will be able to afford for the foreseeable future. The Government’s strategy is to hope that economic growth with solve the problem, but economic growth seems very elusive. If we do nothing then we will have higher interest rates,, even more debt which we will not be able to service and as a result there will be far fewer taxpayer funded government services because the taxes will not be there and no one will trust us to lend us money. This will cause a depression.
As a nation we have got to cut spending massively. We have also got to stop giving money to people who under a variety of guises refuse to work. I have no doubt that the next Government of whatever hue will have to do this. It will cause much hardship, but a fully blown depression with massive unemployment and massive inflation will cause even more hardship.