Real wages in the UK will not return to their 2008 level until 2026 despite an easing of inflation, the Resolution Foundation, an independent think tank, reported this week in its analysis of the new budget.

According to the report, the country is on track for a “disastrous decade” of stagnant incomes and high taxes, with cuts to public services.

The publication highlighted that real wages fell at an annual rate of 3.9% in January, noting that the bigger picture for wages is “one of long-term pay stagnation.” 

The decrease in household disposable incomes this year and next are the worst in a century, the think tank stressed.

“Britain’s economy remains stuck in a deep funk – with people supported into work but getting poorer, and paying more tax but seeing public services cut,” it wrote.

The UK is forecast to have gone through “the biggest energy and inflation shock since the 1970s, while avoiding a recession, with unemployment peaking at just 4.4%,” Resolution Foundation added.

According to the study, taxes as a share of GDP are expected to hit 37.7% by the end of the forecast period, representing a 70-year-high and a 4.7% increase since 2019-2020.

The freeze on income tax thresholds since 2022-23 means that typical households will be worse off by £1,110 ($1,337) by 2027-28 when the freeze ends, it noted.

Torsten Bell, chief executive of the Resolution Foundation, stated that “Jeremy Hunt’s first budget was a much bigger affair than many expected, combining improvements to the dire economic and fiscal outlook with a significant policy package aimed at boosting longer-term growth in general, and the size of the workforce in particular.

“But stepping back, the UK’s underlying challenges remain largely unchanged. We are investing too little and growing too slowly. Our citizens’ living standards are stagnant. We ask them to pay higher taxes, while cutting public services,” he concluded.

RT 19/3/23

Dave C

Britons are facing the biggest decline in living standards since records began in the 1950s, and the highest taxes since the World War II as the economy grinds to a halt this year, the Office of Budget Responsibility (OBR) reported on Wednesday.

According to the report, real household disposable income, a measure of real living standards, will drop by 5.7% over the financial years 2022-23 and 2023-24.

“While this is 1.4 percentage points less than forecast in November, it would still be the largest two-year fall since records began in 1956-57,” the report said.

A surge in energy and consumer goods prices triggered inflation, which currently stands above nominal wages and has led to a historic fall in disposable incomes, the OBR noted, adding that “this means that real living standards are still 0.4% lower than their pre-pandemic levels.”

According to the forecast, living standards will not return to pre-pandemic levels until 2028 and the tax burden remains on course to be the highest since the Second World War.

The UK “continues to see the tax burden reach a post-war high of 37.7% of GDP at the forecast horizon in 2027-28, including the highest ratio of corporation tax receipts to GDP since the tax was introduced in 1965,” the watchdog said.

The British economy is expected to shrink by 0.2% this year despite claims by the government that the country is set to avoid a recession.

RT 17/3/23

Dave C.

 Food inflation has accelerated in the Netherlands with prices surging 18.4% year-on-year in February from a 17.6% January reading, data shared on Tuesday by Statistics Netherlands (CBS) shows.

Clothing was also considerably more expensive, surging 11.8% last month from 9.4% in January. Experts point out that these two items in particular contributed to inflation last month, which amounted to 8%.

An economist at the third-largest Dutch bank ABN Amro, Aggie van Huisseling, said that unusually high energy prices continued to fuel inflation in the country. The increase in food prices stems mainly from the soaring costs of fresh vegetables, as products like tomatoes currently come mainly from greenhouses that are heated with gas, Van Huisseling explained.

At the same time, fuel prices eased somewhat, declining 9.4% in February compared to the same period last year, figures from the CBS showed.

According to the European harmonized consumer price index (HICP), consumer goods and services in the Netherlands were 8.9% more expensive in February than the previous year and up from 8.4% in January.

Economists from ABN Amro expect inflation to cool this year and decline to 4%, but warn that a rise in energy prices will be passed on to the cost of other products.

Annual inflation in Poland accelerated in February to the highest level since 1996, data released by the national statistics service GUS showed on Wednesday.

Consumer prices rose 18.4% year-on-year in February, up from the 16.6% recorded in the previous month.

Economists are predicting that the latest surge will mark the peak of the current cycle, but Polish consumers say they are struggling to pay household bills and buy basic groceries, with price growth at its steepest in more than a quarter of a century.

The figures show that the February reading surpassed the previous high of 17.9% recorded in October 2022, with food prices, transport and energy costs rising fastest last month.

Prices of food and non-alcoholic beverages saw the most significant annual increase in February of up to 27%, compared to 26.6% in January. Housing-related rates jumped 22.7% while the cost of heating fuel, water and central heating increased, the report said.

The Polish economy slowed in 2022 amid soaring inflation and a plunge in consumer spending brought on by the conflict in neighbouring Ukraine and the impact of sanctions on Russia.

Food prices in Finland saw a historic jump of 16.3% last month in annual terms, according to official data released on Tuesday. The figure represents the highest price growth since 1964, the country’s statistics agency reported.

Data showed that the high cost of electricity, food, and increased loan interest rates were the main drivers of inflation on an annual basis.

According to the report, the core inflation rate, which excludes food and energy prices, continued to rise sharply and reached 6.6% in February.

Jukka Appelqvist, chief economist of Finland’s Central Chamber of Commerce, said that while prices may not continue to rise as rapidly as in February, the persistence of inflationary pressures is a major economic risk. The official noted that there were no signs of an uncontrollable spiral of prices and wages falling in the country. However, he warned that a stable and low inflation rate is unlikely to happen in the near future.

The prolonged tight monetary policy and rising interest rates could lead to a deeper recession than anticipated, Appelqvist suggested.

The EU nation sank into recession in the fourth quarter last year after GDP had shrunk more than expected from the previous three-month period. The decline was led by exports, investments and consumption, official data shows.

Economists have projected a mild recession for the Finnish economy this year before a rebound in 2024.

RT 17/3/23

Dave C.

 French President Emmanuel Macron bypassed parliament and enacted a controversial pension reform package on Thursday, triggering riots and arson on the streets of Paris. The move, which raises France’s retirement age to 64, had already caused months of strikes and protests.

Macron invoked a special constitutional power to pass the bill, immediately before a vote was set to take place. Prime Minister Elisabeth Borne announced the decision in the National Assembly, as opposition lawmakers booed, jeered, and sang.

Under the power invoked by Macron and Borne, the bill is considered passed unless a majority of lawmakers file a motion of no confidence against the government in the next 24 hours. Right-wing leader Marine Le Pen said that her National Rally party would back such a motion, as did a number of leftist leaders.

Macron has argued for months that France’s pension system will go bankrupt unless citizens pump more money into the system. Raising the retirement age from 62 to 64 – which would still see French workers retire earlier than most of their European counterparts – would be a “just and responsible” way to achieve this, he said in January.

France’s trade unions – who have protested the reforms since last year – have argued that the system should instead be buoyed by increasing taxes on the wealthy.

Thousands of protesters gathered in Paris as Macron’s bill was passed. Near parliament buildings, police fired tear gas at the demonstrators and faced off against the crowd in lines.

Rioters set fires and blocked roads throughout the French capital, as groups of masked protesters clashed with riot police.Prior to the bill’s passage, almost half a million people protested in cities across France on Wednesday, according to figures from the Interior Ministry. Police have already made 73 arrests in the capital, Le Figaro reported, citing a police source.

RT 16/3/23

Dave C

 As the cost-of-living crisis impacts British households, many are cutting down on food while living in cold homes, according to the latest findings from the ‘Which?’ consumer insight tracker.

The monthly survey commissioned by the Food Standards Agency (FSA) revealed that 8.1% of households missed a housing, bill, loan or credit card payment in February. One in seven people (15%) said they had skipped meals due to rising costs.

Just over a quarter (27%) said they had gone without some foods, up from 21% in November. Meanwhile, 9% had prioritized meals for other family members above themselves, and 4% had used a food bank.

Nearly 60% of households reported making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. According to the report, adjustments include cutting back on essentials, dipping into savings, selling possessions and borrowing.

Consumers have also been looking for ways to save on their energy bills, with seven out of ten (72%) saying they have turned down the heating due to spiraling costs, while 39% having used less hot water and 19% having had fewer cooked meals.

“Whilst the majority of consumers have used the heating less due to price rises, this behavior will be more extreme in some households than others. Whilst some may be able to save money on heating whilst still keeping their house sufficiently warm, others will not,” the report said.

Three in ten (29%) of those who reportedly reduced their heating said they have often or always felt in physical discomfort this winter as a result. A further four in ten (41%) noted they have sometimes felt physical discomfort, while 29% have rarely or never felt that way.

Data suggests that consumer confidence has recovered but remains low. With confidence in current household finances dropping slightly in February, 38% of consumers described their financial situation as good, and nearly a quarter (24%) as poor.

RT 14/3/23

Dave C.

 The British government has announced an unexpected one-off payment to state broadcaster the BBC. The £20 million ($24.13 million) tranche will be transferred to the broadcaster over the next two years, the UK Foreign Office said on Monday.

The package comes as part of an Integrated Review program document advocating for a ‘Global Britain’ originally adopted under former PM Boris Johnson.

The money is set to be funneled to the BBC World Service and will be used to “support English-language broadcasting,” as well as to “counter disinformation,” the foreign office explained, implying the funds will be specifically used to counter Russia. 

“The refreshed Integrated Review concludes that democracies like the UK must go further to out-cooperate and out-compete states that are driving instability. Developments over the past year, particularly the conflict in Ukraine, have shown the importance of being able to counter the hostile use of disinformation and tackle the spread of harmful state narratives,” it claimed.

UK Foreign Secretary James Cleverly praised the decision, hailing the BBC as “the world’s most trusted international broadcaster,” as well as a “vital” tool “in the fight against the spread of disinformation around the world.”

“This funding will ensure people across the globe continue to have access to accurate, high-quality journalism,” Cleverly asserted.

The statebroadcaster, which recently suspended a freelance sports presenter over a tweet criticizng government policy, received a similar lump sum payment in 2021, with the same proclaimed goal of battling purported fake news.

Back then, however, the payment was more than twice as modest as the new one, with ‘only’ £8 million allocated at the time to “tackle harmful disinformation, challenge inaccurate reporting around the world and improve digital engagement.”

RT 13\3\23

Dave C

One in five students at Russell Group universities are considering dropping out because of the cost of living crisis, and a quarter are regularly going without food and other essentials, the Observer can reveal.

In the largest study of its kind, new research by the Russell Group Students’ Unions – which represents 24 of Britain’s most elite higher education institutions, including Oxbridge, UCL and Edinburgh – for the first time lays bare the devastating impact soaring prices are having on all but the richest students.

More than half of those surveyed said their academic performance had suffered as a result of the cost of living crisis. Students reported having to take on additional paid work to cover costs, concentration issues caused by poor nourishment and financial stress, and skipping lectures because they couldn’t afford travel fares.

Researchers said unless urgent action is taken, the damage being done by the crisis could lead to universities being “only open to the most privileged” – undoing decades of progress on broadening higher education access.

https://www.theguardian.com/education/2023/mar/12/one-in-five-students-at-top-universities-consider-dropping-out-over-cost-of-living

Constant capital, the means of production, considered from the standpoint of the creation of surplus-value, only exist to absorb labour, and with every drop of labour a proportional quantity of surplus-labour. While they fail to do this, their mere existence causes a relative loss to the capitalist, for they represent during the time they lie fallow, a useless advance of capital. And this loss becomes positive and absolute as soon as the intermission of their employment necessitates additional outlay at the recommencement of work. The prolongation of the working-day beyond the limits of the natural day, into the night, only acts as a palliative. It quenches only in a slight degree the vampire thirst for the living blood of labour. To appropriate labour during all the 24 hours of the day is, therefore, the inherent tendency of capitalist production.’  Karl Marx. Capital. Volume One.

                       https://www.marxists.org/archive/marx/works/1867-c1/ch10.htm

Apple and its manufacturing supplier Foxconn have been involved in lobbying for a landmark liberalisation of labour laws in India, the Financial Times reported on Friday, citing sources.

According to the report, the legislation authorised the introduction of 12-hour shifts in the southern state of Karnataka, as well as night-time work for women.

Foxconn reportedly stated that the legal change is crucial to building efficient manufacturing at scale, and that the possibility of running production around the clock using two 12-hour shifts will be a big step forward for the company.

The Taiwanese tech giant has been shifting production away from China due to the country’s strict Covid-related restrictions, which has disrupted the manufacturing of new devices. The move has also been seen as an attempt to avoid problems due to growing tensions between Beijing and Washington.

The Karnataka government announced a week earlier that Apple’s iPhones would soon be assembled in the state, specifying that a total of 300 acres have been set aside for a plant.

India aims to increase its work output and efficiency in order to become the next big manufacturing hub, according to an anonymous Indian government official cited by Mint.

RT 10\3\23

Dave C

 Up until January 24th 2023.The Bulletin of Atomic Scientists Doomsday Clock stood at 100 seconds to midnight.

On that date it was changed to ninety seconds to midnight.

Brigadier General Ripper is an unhinged United States Air Force general who orders a pre-emptive nuclear attack on the Soviet Union in,.

Dr. Strangelove or How I Learned to Stop Worrying and Love the Bomb, in Stanley Kubrick’s 1964 film. 

 How many Brigadier General Jack D Ripper’s are there in the U S Military, or the State Department, or the White House in the present day? Or in the equivalent centres of power in other capitalist / state capitalist entities?

‘The US government will work to improve its nuclear forces, a senior military commander has said, pledging to bolster America’s arsenal on land, in the air, and at sea in response to “rogue” actions by North Korea.

Speaking before the Senate Armed Services Committee on Thursday, Air Force General Anthony Cotton spoke of the need to strengthen the nation’s nuclear arsenal to meet “challenges” from the likes of Pyongyang and other rival states.

“North Korea conducted an unprecedented number of missile launches in 2022 and its new intercontinental ballistic missile (ICBM), referred to as KN-28, highlight that the security challenge continues to grow,” he said. “To ensure our continued ability to serve as the bedrock of integrated deterrence, we are recapitalizing every leg of the nuclear triad, and the nuclear command control and communication systems.”

The ‘triad’ refers to the three primary methods of delivery for US nuclear weapons, including land-based missile silos, long-range strategic bomber aircraft, and nuclear-armed submarines. 

Cotton went on to accuse North Korea of acting as a “rogue” nation which “poses a threat to the United States and our allies,” stressing that Washington must continue to improve its “effective and credible nuclear deterrent.”

Tensions on the Korean Peninsula have soared over the last year, with the DPRK conducting a record number of weapons tests amid a flurry of joint US-South Korean war games. Military activity has continued into 2023, with Pyongyang firing off missiles as Washington and Seoul press on with multiple rounds of exercises, including a recent drill involving a US nuclear-capable bomber.

North Korea has repeatedly condemned such drills as rehearsals for an invasion, and insists it has every right to carry out missile launches and develop its own “deterrent” forces. However, US officials continue to press Pyongyang to give up its nuclear arsenal, with State Department spokesman Ned Price vowing on Thursday to impose increased “costs” on the DPRK until it “changes its approach” and abandons its weapons. Though Price called for “dialogue and diplomacy” with North Korea, so far President Joe Biden appears to have made no effort to sit down with the country’s leadership or hold a new round of talks to deescalate the tensions.’

RT 10\3\23

Dave C.

 The number of shoplifting crimes in Poland increased by almost a third in 2022, newspaper Rzeczpospolita reported on Thursday, citing police data.

Statistics showed that the number of thefts increased by as much as 31.1% on an annual basis, to over 32,000 cases. Out of 16 Polish regions, only Lublin reportedly did not record an increase in such crimes.

The rise in theft is “a clear signal of trouble on the market,” the president of the Polish Trade and Distribution Organization Renata Juszkiewicz was quoted as saying. Soaring prices have been pushing people to commit such crimes, she suggested, adding that it is “a huge challenge” for stores while prompting further increases in operating costs.

The report indicated that food was stolen most of all, followed by luxury items such as expensive perfumes and spirits, as well as small electronics.

The Polish economy slowed in 2022 amid soaring inflation and a plunge in consumer spending brought on by the conflict in neighbouring Ukraine and the impact of sanctions on Russia. Official statistics show that inflation accelerated in the beginning of 2023, with consumer prices jumping 17.2% in January from a year ago. Economists are forecasting that inflation will continue to rise, with Poland projected to have one of the EU’s highest rates this year.

The governor of Poland’s central bank, Adam Glapinski, said he expects the country to avoid a recession, although there may be temporary fluctuations in the first quarter of the year.

RT 11\3\23

Dave C