And as Stewart Lansley convincingly argues in the Guardian today, we’re locked into a slump unless we actively tackle the towering inequalities that led to financial crisis.
The UK economy continues to flatline. According to official Government figures released today, the economy has experienced ‘growth’ of just one tenth of one percent (0.1%) over the last 9 months. But for those of us living in the real economy, the situation is far worse. UK household expenditure has gone down by 1.7% in the last year.
As the Office of National Statistics itself states:
“The weakness of growth in (the last six months), reflects a number of pressures that are being felt in the wider economy by both business and households. These include:
- continuing declines in real wage growth, which resulted in declines in consumer demand and consumer confidence;
- an uncertain labour market, which can feed through to weaker consumer confidence and consumption;
- relatively high rates of inflation and in particular high and rising commodity prices, though this is offset to some extent by relatively low growth of labour costs;
- a weakening global economic position, in particular the UK’s key export markets of the euro area, wider Europe and the US;
- volatility and weakness in financial markets;
- low returns on saving.”
Whilst this is a bleak enough economic outlook in its own right, as Stewart Lansley argues, we can’t escape a further slump unless we actively tackle the towering inequalities that led to financial crisis.
In the UK, whilst seven out of 10 employees have had a freeze or cut in pay over the past year, executive pay has continued to spiral. Globally, the number of billionaires rose by nearly a third between 2007 and 2010, while just over a thousand individuals enjoy a combined wealth of $4,500 billion. In the UK, large corporate cash holdings are at near-record levels.
“The four mechanisms that link inequality and economic malfunction are still at work. Falling real wages are stifling demand in the world’s richest economies. The globe’s largest corporations are sitting on near-record volumes of cash, money that is mostly standing idle. When they are spent, they are likely to finance another wave of high-margin financial and industrial restructuring rather than the productive investment that creates robust economies. Bank assets are even larger today than they were before the crash, and the power of the City and Wall Street remains intact.”
As Lansley concludes, until these issues are tackled and the great concentrations of wealth, income and power are broken up, the global economy will continue to struggle to recover, with much of the world locked into near-permanent slump.
So what odds do you place on our current political leaders breaking up the ‘great concentrations of wealth, income and power?’ Answers on a (soon to be pretty worthless) Euro note please!