We’ve come first in being the worst, sez the IMF – that’s success, innit!

 

I have wonderful news for you: we’ve come ‘first’! Our politicians must be so proud! I speak of the prediction coming from that eminent group of sages – not SAGE but economic sages – of the IMF. Their pronouncement dominates the press this morning, printed or digital, so check it out in the usual place (link)! Things really must be exceedingly bleak if, according to the Daily Star, Brits are now cutting back – on bog rolls!

So let’s look at how the Westminster press is reporting and interpreting this economic disaster. Here’s the DT’s headline: “Hunt’s tax raid means UK will be only major economy to shrink this year, says IMF – Fund blames prospect of deeper recession on ‘tighter fiscal and monetary policies’” (paywalled link) – thank you, Szu Ping Chan, author of this report. We’ve not forgotten how the tax-lowering previous PM and her Chancellor were removed under huge acclaim of Westminster: lowering taxes would have been disastrous, innit like! 

Next, see the nicely apocalyptic headline in the DM, providing a summary even though it’s a bit confusing (this and the following emphases are all mine):

“Britain hit with devastating forecast as IMF tips it to have the WEAKEST major economy in the world and the only one of the G7 to shrink this year: Pressure grows on Jeremy Hunt to produce convincing plan for recovery – The IMF is tipping Britain to be the weakest major economy this year – Higher taxes or lower government spending cited as a key factor in the downgrade” (link)

I confess I am puzzled: should Hunt lower taxes to ‘grow’ the economy, or should he go for more government spending because ‘lower government spending’ will be bad? Am I too naive to understand ‘high economics’ when I wonder if ‘more government spending’ doesn’t mean we’d have to pay ‘more taxes’? Perhaps we peasants ought to run things when we clearly have understood what is needed: fewer bog rolls! That means: stay within the budget. Nah – that’s not how Whitehall works.

Now let’s look at the scary headline for The Times’ report: “UK economic woes worse than Russia’s, predicts IMF” (link, paywalled) – oh noes – Russia’s economy performs better than ours? How can this be? Aren’t they starving, suffering under our sanctions and yon war? Here’s how:

“The IMF has upgraded its global growth forecasts in response to plummeting global energy prices and hopes that inflation will fall faster than expected. Britain is notable for being the only big economy expected to contract, according to the forecasts, while next year’s growth is expected to rise to 0.9 per cent, 0.3 percentage points up on the IMF’s last forecast in October. Britain’s underperformance relative to its peers is the result of “tighter fiscal and monetary policies and financial conditions, and still-high energy retail prices weighing on household budgets” […] The IMF said UK households were suffering from “stretched budgets” while high interest rates were raising borrowing costs and slowing down the housing market.” (link, paywalled)

I suppose it’s good to know that the IMF at least mentions the high energy costs – something the Russian economy most certainly isn’t suffering under. Perhaps some courageous MP will ask why UK energy firms still squeeze the last drop out of households with their exorbitant bills? As for those ‘stretched household budgets’: well, with the local council taxes expected to rise in line with inflation, those budgets will become even more stretched. But that’s not something global economists need to worry about.

And then, adding to the tax burden, there are our Armed Forces. Yesterday we mentioned the assessment of a US General, that our Armed Forces are no longer a ‘top force’. Amazingly, the Defence Minister Ben Wallace agrees! See this:

“The British Army has ‘fallen behind its peers and needs investment’, the Defence Secretary Ben Wallace admitted after a US general ‘said the UK’s military is no longer regarded as a top-level force’. Mr Wallace agreed on the need for ‘urgent recapitalisation’, but said the government was already investing £34bn into the army’s equipment plan between now and 2033 and that changes like this cannot happen overnight. ‘There’s no magic wand, there’s no factories whirring away like car factories where you just press buttons and they come,’  he told Sky News.” (link)

So all will be well because “we” have a ten-year-plan! But what about Russia, outperforming us economically already? After all, they’ve been running out of everything since March 2022, or so we’ve been told, and still they’re fighting. Perhaps handing over our armament to the Ukraine wasn’t such a good idea? Then Wallace said this:

“[…] only two countries could sustain almost constant production lines: China and the United States. The UK could opt to buy from abroad, but this would eradicate the UK defence and aerospace industry and the UK wouldn’t be able to give its troups [sic!] the exact equipment they want, he added.” (link)

So why did he, why did yon erstwhile PM so eagerly hand over our stuff which we clearly cannot replace, not being China or the USA? Rounding up, because sources will source, there’s this:

“Bottom line… it’s an entire service unable to protect the UK and our allies for a decade,’ one defence source said according to Sky News. Rishi Sunak is also running the risk of failing in his role as ‘wartime Prime Minister’ unless the situation is radically improved, the source said.” (link)

Correct me if I’m wrong, but doesn’t having a ‘wartime PM’ mean that we’re ‘at war’? Why haven’t we been told? And shouldn’t the IMF therefore like to correct their predictions, given that “we” obviously are ‘at war’?Words fail me! I was even more speechless when I read this: 

“Furious Navy chiefs order investigation after ‘workers on Trident submarine glued broken bolts in a nuclear reactor chamber’ – Allegedly unsuitable repairs made to bolt heads that had been over-tightened – HMS Vanguard is one of the UK’s four Trident nuclear submarines in service – All will be replaced by the new multi-billion pound Dreadnought class from 2028”(link)

There’s nice: we’ll have new nuclear submarines in five years – or will we, given this ‘workforce’, this ‘quality control’? Won’t they all be stuck in dry docks, like that aircraft carrier, like the frigates? No worries – all will be well because the “Navy reveals ‘vital’ new mine-hunting ship to detect undersea threats – New £40m vessel will be crucial in ‘keeping our personnel out of harm’s way while they conduct vital operations’” (paywalled link). At least that ship has been bought in and is only being slightly refurbished, for using drones. We’re safe! 

That’s all I have for today. I am looking forward to statements from Labour, about how to square the circle of not raising taxes while making the Armed Forces ‘fit for purpose’ and pouring more money into the Sacred Cow. Perhaps they’ll demand that energy firms lower their home energy bills so we can buy more bog rolls? Have a good day …



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