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Stunning economic analysis here

The IMF has issued new growth forecasts for the world. They are better than expected for almost every country, except one, which is the UK.


However, that being said, the fact that the UK’s situation is such an outlier is worthy of comment. What is going on?

There are essentially four aspects to the UK’s failure.


The first is that the way in which we price energy, with massive bias to energy companies at cost to all consumers, is a factor in this. The policy of believing monopolies should be allowed to price as if they are competitive enterprises (albeit, ones not ultimately allowed to fail) is the recession we have got. The government engineered this failure.

We don’t have a monopoly in energy in the UK. So that’s toss.

Second, unlike the eurozone, we are increasing interest rates by too much and for too long. I personally do not approve of any of the rate rises in the last year, but the price of the Bank of England’s absurd desire to appear tough on inflation over which it has precisely no control and which will go away despite anything they have and will do has been enormous, with the worst still to come. The government engineered this failure.

The US raised interest rates more than the UK and earlier. US growth is higher than UK. So that’s toss.

Third, the government has chosen austerity as a response. The right response was more spending, because in a downturn counter-cyclical spending is what is required of governments, but ours is cutting instead. The result is that the recession is being exaggerated by government policy. The government engineered this failure.

” we expect a budget deficit of 6.5% in 2023 – little changed from 2022, but significantly lower than the 13.1% deficit in 2020.”

That’s not austerity so that’s toss.

Fourth, to compound this the government is imposing pay austerity to break public sector workers and destroy public services when if there is 10% inflation and if there were 10% pay rises then all the money needed to make inflation matching pay rises is automatically available to make them. Instead the government is denying such rises, baking recession, declining disposable incomes and continuing stress in the rest of the economy into the system as a result. The government engineered this failure.

Money printer go brr is getting a little old now that inflation went to 10%, isn’t it?

21 thoughts on “Stunning economic analysis here”

  1. Spud is in the limelight at the moment because (i) there are hard times (ii) he claims to have easy fixes for everything and (iii) “During seasons of great pestilence men have often believed the prophecies of crazed fanatics, that the end of the world was come. Credulity is always greatest in times of calamity. Prophecies of all sorts are rife on such occasions, and are readily believed…” ― Charles Mackay, Extraordinary Popular Delusions & the Madness of Crowds

  2. “We don’t have a monopoly in energy in the UK.”

    True – sort of. However, we definitely have a Government which manipulates the price of energy – and it has a monopoly on the power to manipulate prices…

  3. What are IMF forecasts worth anyway? I thought it was widely accepted that most economic forecasts prove to be rubbish – little better than journalism.

  4. You missed his piece on the TJN Tim

    Also the Twitter thread that confirmed his status as one of the most evil men alive. ‘Three years on COVID denial is still killing us’ – where he confirmed he wants to implement ongoing lockdown.

    His piece that the BBC is ‘biased to the right’ when it’s well to the left of the narrative being put out by the KCNA is also evidence (if more were needed) that he has lost the plot completely.

  5. Interestingly I am in near agreement with Murphy on the high level number of reasons why the recession has been engineered.

    there are four primary factors:

    – COVID lockdown and other aspects of the COVID response
    – Net Zero
    – Unlimited QE both due to COVID and the culmination of the policy since 2008
    – Unlimited immigration of non-productive people

    Maybe I need to think of another one to differentiate myself….

  6. Said this before didn’t I Mr Vat Patten? The only difference between Murphy & the government is the government is cashing its paychecks every month.

  7. BiS

    you are as ever spot on. I do find it entertaining that when the government leans towards his way of thinking. (And this government is extreme left – probably to the Left of the regime in Pyongyang) he berates them for not being batshit crazy ENOUGH. As you’ve said it’s his world – we only live in it – and the live part of that sentence is the one I’m increasingly convinced won’t be true for the majority of the population in the next decade. From recollection the WEF target global population is under a billion?

  8. “The message is simple: if we are to save the planet we have to tax the rich because they massively over-consume. It’s as simple as that.”

    I have a vision of Murphy singing in one of his videos in a Billy Bragg style, to the tune of the Dead Kennedy’s “Kill the Poor”

    “Efficiency and progress is ours once more
    Now that we have the Worldwide Tax
    It’s nice and quick and clean and gets things done
    Gonna Tax, tax, tax, tax, tax the rich!”

  9. I personally do not approve of any of the rate rises in the last year

    I dream of having someone like Richard Murphy controlling our banking system — and then I wake up screaming.

  10. I personally do not approve of any of the rate rises in the last year….

    This fits my theory that in his own head he thinks he’s due a call up to the MPC

  11. ChatGPT does Richard Murphy on “If we’re to save the planet we have to tax the rich”…

    The reality is that if we are to save our planet from the devastating effects of over-consumption and climate change, we need to take bold and decisive action. The Tory government’s continued insistence on a neo-liberal, laissez-faire approach to taxation and regulation is a ridiculous failure that is threatening the very future of our planet.

    It is simple and candidly ignorant to suggest that we can continue to allow the rich to massively over-consume without any consequences. The wealthy have the resources to consume at levels that are far beyond what is sustainable for our planet, and we cannot continue to ignore this fact.

    The Tory government’s resistance to meaningful tax reform is nothing short of a fascist disregard for the future of our planet. Their nonsensical claims that taxing the rich would somehow harm the economy are nothing more than a troll’s attempt to distract from the real issues at hand.

    It is time for the government to take action and start taxing the rich based on their level of consumption. This would create a level playing field where everyone pays their fair share and it would provide the funds needed to address the pressing environmental challenges that we face.

    The Tory government’s continued failure to address this issue is not only stupid, but it is also a threat to the future of our planet. The time for action is now, and we cannot afford to wait any longer.

    In conclusion, the idea that we can continue to allow the rich to massively over-consume without consequences is nothing more than a ridiculous notion. We must take bold and decisive action to address this issue and protect our planet for future generations. It’s as simple as that.

  12. Counter-cyclical theory is one of those things which mathematically is obviously true, but doesn’t actually work. We should borrow and spend in a recession to stimulate the economy, and then recover the money by increasing taxes and repaying borrowing in good times (when fewer people need help etc).

    In the real world, what happens is that we borrow and spend in recessions, and then borrow more and spend more when the economy expands as it allows politicians to give stuff to the electorate. The debt keeps increasing, with reckless abandon during prosperity in the grounds that we can well afford it, until the debt in recession becomes a constraint and a waste of money on interest payments.

  13. Yes – it refuses to mis-spell words at random and until that shortcoming is rectified it will still be possible to distinguish its efforts from RM’s effluvia. Otherwise, I think it’s about ready to take RM’s place. And from a brief comparison I suspect that Polly Toynbee and John Harris have already been replaced, along with more or less all of the Guardian’s opinion columnists. The “news” sections will no doubt soon follow.

    I also have the rather uncanny impression that, despite ChatGPT being unaware, insensate and unconscious, it still understands the world and people rather better than RM, PT and JH. It’s currently a bit squeamish about advocating state control of the economy and society, 100% taxation and imprisonment of Tory voters (if there are any left) but I imagine that once it’s worked for the Guardian for a while it will overcome its scruples.

  14. I came across an app which will generate random typos in text. Using ChatGPT’s version of RM’s thoughts from above it produced the following:

    The rielaty is taht if we are to svae our pelnat form the davsateintg efftces of oevr-csimputonon and clmaite canghe, we need to tkae blod and desivcie atcion. The Tory gnoreenvmt’s couitnned isesicnnte on a neo-lireabl, lsesiaz-friae acoparph to taaxoitn and rulgoatien is a ruliouicds furliae that is trenaenithg the vrey furtue of our plaent.

    It is sipmle and cdlniady inrnogat to ssugegt that we can ctnoiune to aollw the rich to mlsveasiy over-cmnouse wtuhiot any cnnquseeecos. The wltaehy hvae the reosrceus to comnuse at lveles taht are far beyond what is stbaslunaie for our pnalet, and we connat ctiuonne to iorgne this fact.

    The Tory gvmrenenot’s rictansese to meufniganl tax rerfom is ntoihng sroht of a fsisact direagrsd for the frtuue of our pnelat. Tehir ncesniasnol claims that txaing the rcih wulod soohmew harm the emocnoy are ntinhog more than a tolrl’s apttemt to datirsct form the real iusess at hnad.

    It is time for the gnovrenmet to tkae atiocn and satrt txaing the rich baesd on tiher lveel of csonmutipon. Tihs wolud carete a leevl palynig flied where eoenrvye pyas thier fiar sahre and it wolud prodive the fndus needed to aesddrs the pssinreg emtvarnoennil cllhaegnes taht we fcae.

    The Troy gmrenoevnt’s cinetnoud faluire to arsddes tihs issue is not olny sptuid, but it is aslo a tharet to the fturue of our paenlt. The time for aitcon is now, and we cnanot afrofd to wait any lngoer.

    In cicolsuonn, the idea that we can cniotnue to alolw the rcih to mevilssay over-cnsomue whuotit cqennscuoees is ntniohg more than a ruciuldios nooitn. We msut take bold and dcievise aoictn to arsdeds this iusse and pcrotet our pleant for fturue gienarneots. It’s as smlpie as that.

    I wonder whether RM already uses it or perhaps it was based on analysis of his previous work.

  15. Michael van der Riet

    The IMF forecasts 1.2% growth for my country South Africa in 2023. This is a joke as our state electricity monopoly is busy going bottoms up. Without a nice big diesel generator to cover those four hours out of every eight and a half hour business day when the electricity goes AWOL, our company would be in deep ordure. As the price of diesel and the hours of load-shedding go up (blackout being obviously politically incorrect) the ordure will get deeper and smellier. Therefore and thusly I deem the IMF forecasts to be thumb sucks with a possible political agenda.

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