The Choice of Gloom is Outstanding

Posted on Sep 01, 2022. by NTI

Imagine the face of a child entering a Pick-'n-Mix Superstore at the entrance to the world's biggest theme park. Her expression reflecting the sheer amount of choice before her would bring tears to your eyes. 

It is much the same today (Thursday 1 September) in the NTI newsroom. We have so much disaster and gloom from which to select that it is impossible to make a decision as to where to start. Take this from The Times this morning: Britain faces the “terrifying” prospect of the biggest squeeze in living standards for a century, a leading think tank has warned, with all wage growth since 2002 being wiped out.


The 'leading think tank' that delivered this body-blow is the redoubtable Resolution Foundation, who reckon that the typical household will see a 10 per cent fall in mean disposable income over this year and next; the equivalent of £3,000. If you read our bulletin about discretionary spending on Tuesday the level of choice being forced upon Britons this winter has just downgraded to, 'which library shall we send the kids to today to keep warm?'

The Foundation warns that, under current projections, real-terms pay in 2027 was likely to still be lower than it was 20 years ago. We should say that those of you who were eight in 2007 and on pocket money of around one-quid-fifty are probably excluded from this prediction of the dire.

The Telegraph says that people living in 'absolute poverty' would rise to 14 million by 2024, an increase of three million, keeping the other eleven million of them company. It is pretty shocking for the world's sixth biggest economy to realise that the definition of 'absolute poverty' is where your level of income makes it impossible for the person or family to meet basic needs of life including food, shelter, safe drinking water, education, healthcare, etc.

The FT told us this afternoon that price pressures are becoming more entrenched in the economy as wage growth accelerates, according to the chief financial officers of selected UK companies. The businesses polled expected output price growth in the year ahead to reach 6.5 per cent, up from 6.3 per cent the previous month and the highest level since records began in 2017.

The same source reported that the UK manufacturing downturn deepened in August as demand from domestic and overseas markets fell sharply. The headline index fell to 47.3 in August, down from 52.1 in the previous month and the lowest since May 2020, when the country was in a pandemic-related lockdown. 50 is the 'benchmark - we are okay' number.

Bllomberg told us this afternoon that Liz Truss, our third favourite potential prime minister, is weighing cutting business rates for small-and medium-sized companies to help shield them from soaring energy costs. They are not, of course, protected by the energy cap which doesn't fit anyone anyway. Responding to lobbying, businesses suggested increasing the threshold for relief from the rates to properties with a so-called rateable value of £25,000 from £15,000, a source close to Ms Truss said. She is receptive of the idea, which would remove 200,000 companies primarily in Northern England from having to pay the tax.

Will it be enough? Is it all too late? Tune in tomorrow for more gloom.

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