Monday, 22 August 2011
Woe, woe and thrice woe
Riots, panic in the eurozone and the stock exchange seemingly in free fall, all happened in this last fortnight. This blog takes its annual holidays and all this happens.
In my old LSE days I would be quick to describe it as the death spasm of capitalism but as old Marx, Karl not Groucho was want to say, capitalism is constanly reinventing itself. Whilst it can’t be written off yet, it certainly looks a bit frail at the moment.
It is certain the world’s economy is slowing down and it looks as if hard times are ahead. The number of ships going through the Suez canal is down by 10 per cent.
Britain's high street shops have seen a 2.6% drop in customer numbers over the past 12 months, according to the British Retail Consortium. The high street shops in Wales have seen a 9% drop in customer numbers and in Britain has a whole the drop is 2.6%
More than one in 10 shops (11%) on high streets and in town centre malls stood vacant in May, with the highest vacancies in Northern Ireland (17.1%), Wales (13.4%) and the north of England including Yorkshire (13.1%).
Household finances in Britain are deteriorating at a faster rate than at the height of the recession in 2009. Little wonder with a freeze on wages and inflation running at over 4%.
Mr Osborne had hoped that the export market would be the salvation but not so according to the think tank IPPR exports stalled in the first quarter of 2011.
The slow down in the economy impacts directly on employment. The latest figures released last week show unemployment in Wales having risen to 122,000. The Welsh jobless rate is now 8.4% the highest of all four UK nations. In England it is 7.9%, Scotland 7.7% and Northern Ireland 7.3%.
It is little wonder then that last week the FTSE 100 index fell more than 5%. There is little confidence in the economy out there.
Mr Osborne needs to think again on the way he is managing the economy and if he is to stubborn to change course then the junior partners in the coalition have got to stand up to him and insist or pull out before lasting damage is done.
Britain needs a package of radical measures, both fiscal and monetary, to stimulate the economy. Both national and devolved governments need to pass an emergency package of spending on public infrastructure.
Wales needs to electrify all its railways. New schools need to be built and investment needs to take place in new green technology.
Without a plan B, lets not kid ourselves the riots of the last fortnight will not be the last.