Thursday, January 2, 2014

Data Shows Cost-of-Living Crisis About to End

The consensus of broadsheet pundits is that Ed has, with his cost-of-living crisis line that prices are rising faster than wages, nimbly and cleverly switched from a losing argument on the economy to a winning “retail offer”. Guido thinks this successfully plays into the British national psyche; grumbling about both the weather and the cost of things rising. However as the economy rises unemployment falls and earnings will caeteris paribus begin to outstrip inflation as sure as the sun rises. The ONS data shows this is about to happen…

cpi-v-median-earnings

Guido is beginning to worry that Miliband, like his former mentor Gordon Brown, hasn’t really got a strategy. The whole “too far, too fast” thing was bound to end in tears unless there was a permanent recession. As it happened the predictions by Ed Balls of a triple-dip turned out to be über-pessimistic, statisticians say there wasn’t even a double-dip. The only recession the UK suffered originated under Gordon Brown.

The energy cost argument still generates headlines, however international comparisons show that UK energy costs are middle of the league table for Europe – though US fracking and shale gas means their energy costs are way below ours. Fracking however is opposed by Ed Miliband.

What then? Having lost the argument on debt and the economy, followed – food banks notwithstanding – by the cost-of-living crisis evaporating, Labour will have to change tack again. Labour can’t fight on economic competence, because so contaminated is Ed Balls that he even loses to George Osborne. Labour are blamed for the economic mess and are suspected by the voters of still being untrustworthy on dealing with the deficit and debts. They would be unwise to fight on leadership; “weak and weird” Ed versus “posh and out of touch” Dave is not a great prospect for Labour.

Guido’s guess is they will try to have it both ways, partially accept the coalition’s spending envelope and pretend they can tax their way to prosperity. A policy Miliband’s socialist frère Hollande has now abandoned. All the chatter (spun by his adviser Stewart Wood) about Ed’s plans for “big changes in our economy” - a strategy based on East Coast academic theories from Harvard professors on new “Varieties of Capitalism” – will have Lynton Crosby crying with laughter into his (Australian) Chardonnay. Doesn’t mean Miliband isn’t going to try it…

UPDATE: The FT has surveyed economists and they mostly think households will start to feel better off – this is after consumer confidence surged 20% in 2013. Well spotted economists…

ft-survey-economists


Seen Elsewhere

Labour Failed Those Victims | Labour Uncut
We Cannot Ignore the Race Issue Here | Dan Hodges
74 MPs Who Back Stop Mills Motion | Speccie
Milibande | Ian Birrell
The True Meaning of Political Correctness Gone Mad | Speccie
Nigel, Nigel, Nigel! | Bloomberg
Bercow Blinks | Guardian
Speaker on the Ropes | Indy
Outgoing Clerk Slams Bercow – Row Goes Very Public | BBC
Darling Was Wrong on OBR | Speccie
Climate Change Cools Off | Washington Times


VOTER-RECALL
hot-button new-advert


Shaun Wright’s understatement about the Rotherham child abuse scandal…

“..I could have taken more action and probably dealt with this issue better.”



Owen Jones says:

We also need Zil lanes.


Tip off Guido
Web Guido's Archives

Subscribe me to:






RSS


AddThis Feed Button
Archive


Labels
Guido Reads
Follow

Get every new post delivered to your Inbox.

Join 1,427 other followers