{"id":4220,"date":"2015-05-20T16:15:01","date_gmt":"2015-05-20T15:15:01","guid":{"rendered":"http:\/\/unitelive.org\/?p=4220"},"modified":"2015-05-21T16:07:03","modified_gmt":"2015-05-21T15:07:03","slug":"down-below-zero","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=4220","title":{"rendered":"Down below zero"},"content":{"rendered":"
<\/div>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

Deflation, slow growth, pay in the doldrums, household debt on the rise, productivity stagnant. Can we survive more austerity?<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

So prices in general have gone from not rising at all \u00e2\u20ac\u201c zero inflation \u00e2\u20ac\u201c to actually falling \u00e2\u20ac\u201c deflation. It\u00e2\u20ac\u2122s the first time in the lifetime of most of us that this is happening and uncharted waters for modern Britain.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

Put it together with slow economic growth, real pay still below where it was before the banking crash, rising debt and poor productivity. It\u00e2\u20ac\u2122s not a good place to be.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

With Osborne about to unveil a new budget soon, can the economy stand another dose of austerity cuts? If it can\u00e2\u20ac\u2122t we\u00e2\u20ac\u2122ll need a bigger economic miracle than raising Lazarus from the dead.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

This is \u00e2\u20ac\u015bgood deflation\u00e2\u20ac\u0165 they say. Even the Bank of England now says so.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

Falling prices are mainly put down to supermarket food price wars and the halving of the cost of a barrel of oil. The cost of transport is falling with the exception of the price rises on our railways.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

In short, it\u00e2\u20ac\u2122s all short lived deflation. Enjoy it while it lasts.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

But that\u00e2\u20ac\u2122s not what the Bank of England suggested in its quarterly report out in February. Then, most of the deflation was \u00e2\u20ac\u015bgood\u00e2\u20ac\u0165, but they said a third of it was due to poor growth, including poor wage growth.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

It acknowledged deflationary risks then. It\u00e2\u20ac\u2122s gone a bit shy now along with most economic commentators.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

If deflation was as good as Osborne is now claiming, why would the Bank of England have an inflation target of two per cent<\/span>? He can change the target at any time.<\/span><\/span><\/p>\n

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\u00c2\u00a0<\/span><\/span><\/p>\n

‘Goldilocks rate’ <\/strong><\/em><\/span><\/span><\/p>\n

\n

The\u00c2\u00a0two per cent\u00c2\u00a0inflation rate target is seen as the \u00e2\u20ac\u015bGoldilocks rate\u00e2\u20ac\u0165: not too hot, not too cold, just right. Perfect, like the porridge Goldilocks stole from the three bears.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

That places deflation porridge in the cold cabinet. Which, as Japan has learned, can have a chilling effect on the economy if economic hypothermia kicks in.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

Economic experts are putting on a brave face, confidence is everything. Make no mistake, the Bank of England, the City, the Treasury and industry are holding their breath hoping the dive into deflation is short-lived.<\/span><\/span><\/p>\n


\n<\/span><\/span><\/p>\n

Fragile<\/strong> <\/span><\/span><\/em><\/p>\n

\n

Economic growth is still fragile. A significant amount of the growth during the so called economic miracle may well be down to little more than population growth.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

Productivity is poor. The balance of payments \u00e2\u20ac\u201c the value of what we buy in from abroad against what we sell abroad \u00e2\u20ac\u201c is so bad very few people talk about it.<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

There is danger that another bad dose of scorched earth austerity could be the tipping point that dumps us down the deflationary spiral. <\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

Unite assistant general secretary Steve Turner said, \u00e2\u20ac\u015bReal wages have been driven down \u00e2\u20ac\u201c people have just experienced the worst fall in living standards since the 1870s. <\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00e2\u20ac\u015bThe concentration of new jobs are lower paid jobs. The UK now has the biggest inequality gap in Europe. \u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n

\u00e2\u20ac\u015bMore austerity is not the road to prosperity; we need investment in housing, transport, manufacturing, communications \u00e2\u20ac\u201c all key bits of our economy \u00e2\u20ac\u201c and the creation of decent jobs for all. This is what creates strong economic growth that benefits everyone.\u00e2\u20ac\u0165<\/span><\/span><\/p>\n

\u00c2\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00c2\u00a0 Deflation, slow growth, pay in the doldrums, household debt on the rise, productivity stagnant. Can we survive more austerity? \u00c2\u00a0 \u00c2\u00a0 So prices in general have gone from not rising at all \u00e2\u20ac\u201c zero inflation \u00e2\u20ac\u201c to actually falling \u00e2\u20ac\u201c deflation. It\u00e2\u20ac\u2122s the first time in the lifetime of most of us that this […]<\/p>\n","protected":false},"author":1,"featured_media":4222,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[76,196],"wps_subtitle":"With an economy this fragile, how will we survive austerity cuts? ","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4220"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4220"}],"version-history":[{"count":3,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4220\/revisions"}],"predecessor-version":[{"id":4224,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/4220\/revisions\/4224"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/4222"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}