They’re at it again. In August, they tried to convince us that the reason the UK’s discretionary economy is cratering was because it rained most of the way through July. September, in contrast, was unseasonably warm and dry. And so, today’s retail sales figures were greeted with the headline:
“Warm weather leads to shock drop in shop sales.”
Most likely, state employees and establishment media editors are under pressure to put as positive spin as possible on economic news since the alternative might result in a full-blown panic. Nevertheless, the idea that a bit of sunshine was responsible for a 0.9 percent fall in retail sales in just 30 days is fanciful to say the least. Indeed, until August, the establishment media had been reporting sales values, because these were still rising. For more than a year, with prices rising across the economy, consumers had been buying less stuff but paying more for it as businesses passed on higher costs by raising prices. Last month though, we crossed another economic milestone, as both volumes and values decreased:
Only at the end of the BBC report – after a lot of guff about how sales are likely to pick up as Christmas approaches – do we get to the nub of what is happening:
“Consumer confidence took a tumble in October due to people ‘simply not having enough money to make ends meet,’ said Joe Staton, client strategy director at GfK, which tracks shopper sentiment.
“Meeting the ‘costs of heating our homes, filling our petrol tanks, coping with surging mortgage and rental rates, a slowing jobs market and now the uncertainties posed by conflict in the Middle East, are all contributing to this growing unease’, he said.”
Okay, set aside that last bit about Gaza – which couldn’t have had an impact on the September figures – and you have a description of spending patterns shifting away from discretionary goods and services as the cost of essentials like food, housing and energy continue to rise. As we saw with yesterday’s unexpectedly high inflation rate, while the speed at which prices are rising may have slowed from their 10.6 percent level in January, prices are still increasing by 6.7 percent year-on-year… and there is good reason to expect inflation to accelerate over the coming months – even if recession and interest rate cuts are likely in 2024.
For millions of households across the UK facing growing housing, energy and food costs, Christmas will likely be far less material than we have been used to. Not least because the lockdown handouts have been spent, state support for energy costs has been withdrawn, and tens of thousands of us are already behind on our credit card, rent and mortgage payments. In this sense, September may well be the fool’s “soft landing” component of an altogether uglier recession – with Christmas marking the point where the economy smashes nose-first into the floor.
The temptation for many, I suspect, will be to blame the government and the Bank of England. And there is certainly some merit to this, since both have enjoyed large public salaries for pretending to be experts when they are actually clueless about what is happening and can offer nothing realistic in the way of solutions – paying the deposits for unaffordable mortgages or offering cuts to the rate of taxes which won’t be paid are the equivalent of trying to extinguish a bushfire with a water pistol… Not that any of the opposition political parties is offering anything more grounded in reality.
In truth though, the roots of this crisis can be traced to at least the 1980s – the squandering of Britain’s oil wealth, the sale of public assets to shysters and profiteers, the decimation of the manufacturing base, and the deification of the City of London Ponzi scheme, to name but a few. Indeed, it is often the way in human affairs that the consequences of political choices are only experienced by later generations. The neoliberal policies of the 1980s and 1990s being a case in point. None of the things which appeared to work to dig the UK economy out of the depression in the late-1980s are in place today, leaving the UK as the most vulnerable of all the developed economies to an unfolding crisis which is only just beginning.
As you made it to the end…
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