Despite Tory protestations that things are getting better, public sector employment fell by 45,000 in the final quarter of 2010 to 6.2 million, even before the full impact of the government's spending cuts started to take effect. At the same time, local government employment fell by 24,000, central government by 9,000 and Civil Service by 8,000, while employment in private firms increased by 77,000 to almost 23 million.Far from getting better, things are going to get worse. Even David Kern, chief economist at the British Chambers of Commerce, has started to see the light and has argued things will not improve. He said: "We reiterate our forecast that total unemployment is likely to increase to 2.65 million over the next 12-15 months before it starts declining,"
Further evidence of things not going so well economically were revealed in a report last week from IPPR, who indicated England is facing a "growing housing crisis". The report estimated a shortfall of 750,000 homes by 2025. On a regional basis the biggest effect would be in London, with a housing gap of 325,000 homes, followed by Yorkshire and Humberside with 151,000 homes too few.
Economic growth has failed to expand at the level Osborne has hoped and, he certainly did not anticipate the current level of inflation. Indeed, with it now running at twice the Bank of England's 2% target, many economists say a rate rise soon is highly likely. Another report out last week gave little to amuse the Chancellor either. Accountants BDO said that growth would remain sluggish and any imminent rate rise could prolong the weakness. It said confidence in the manufacturing sector had risen to a seven-month high during February, with the BDO Optimism Index reaching 95.5. But despite the rise, BDO said medium-term prospects still looked bleak, with the index failing to reach the 100 mark, which signals sustainable economic growth.
Now, courtesy of Citizen Dave’s little foray into the deserts of Libya, Brent crude rose as much as $2.26 to $116.19 a barrel, while US light crude rose as much as $2.12 to $103.19.
Now yesterday, on the Andrew Marr show, Osborne said Chancellor George Osborne said he was "looking very carefully" at freezing the duty in Wednesday's Budget. In the interview he argued he understood the pressure motorists were under from record-high petrol prices.
Well George, I have some bad news for you – you may understand motorist’s anger, but there is very little you can do to assuage it. With oil running at that price, there is little likelihood of any sizable decrease in the price at the fuel pumps for a while. And, even if he succeeded in bringing down taxes, he is doing so at the price of cutting revenue. Heads he loses, tails he doesn’t win.
Finally, a report out today from the Bank of England has shown nearly two-thirds of people expect the rate of inflation to rise in the next 12 months. The poll, conducted in February, showed that 62% of those asked were expecting a rise, up from 52% in November. And a report by Nationwide shows consumer confidence fell to a record low in February, surpassing levels seen during the recession.
All in all, the current situation is far from good. Unfortunately, we cannot afford to become too hopeful that this week Osborne will do anything to stimulate growth and/ or reduce the number unemployed.
Instead we can look forward to harsher times, with the rich getting richer and the poor getting poorer. When Osborne stands up this week and delivers his Budget, he had better remember the working class have long memories. On Saturday 26th March the mobilisation will begin and thousands will converge on London to join brothers and sisters in the trade union movement to oppose Tory cuts.
To quote Citizen Dave himself, in a comment during Comic Relief: “ Be afraid, be very afraid.”
Well Dave, I hope you are …. Because we are coming to get you.
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