A few weeks ago, we wrote that there was starting to be something of the 1970s about the UK. The sense of deja vu is rising. This week, we learned that Consumer Price Index inflation (the government's favoured measure) is at 2.9%. The Retail Price Index the one the government tells us is deeply flawed, but which they still use to benchmark student loans, rail fares and index-linked gilts is at 3.9%. At the same time, the threat of industrial action is growing.
Theresa May's government is to partly lift the 1% public-sector pay cap (even although taxpayer-funded public-sector compensation remains firmly above the private sector's). This has done her little good. The chair of the Police Federation of England and Wales reckons his members will be "angry and deflated". Three of our biggest unions see a "strong likelihood" of co-ordinated strike action, and Labour leader Jeremy Corbyn won't say whether he would back illegal strikes or not. It is, he says, "a matter for the unions". Weak government, low growth, high debt, persistent inflation and and an aggressive dollop of strike action about to be chucked into the mix. Not encouraging.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Will “Liberation Day” strike again?Donald Trump’s 90-day tariff pause comes to an end on 9 July. Can we expect further market turmoil?
-
Israel claims victory in the '12-day war' with IranDonald Trump may have announced a ceasefire in the 12-day war between Israel and Iran, but what comes next depends on what happens internally in Iran
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Everything is getting more expensive – including moneyEditor's letter Investors are about to start feeling rather more pain, says Merryn Somerset Webb – from the rising price of money.
-
We may be heading for recession – and it will be no ordinary recessionEditor's letter Just as the downturn in 2020 was not a typical recession. the next downturn could be very different too, says Merryn Somerset Webb.
-
What companies should be prioritising this decadeEditor's letter In a world beset by uncertainty, companies should be prioritising slack over efficiency, says Merryn Somerset Webb.
-
Inflation could soon start to hurtEditor's letter Inflation is not going away. And with people's wages not keeping up, things are going to start to hurt, says Merryn Somerset Webb.
