AndrewBailey told The Times that “slack” was opening up in the UK economy, following the increase to employers’ national insurance contributions. That slack should create downward pressure on inflation.
When will those who supposedly supply the UK with economic management learn the most basic things about macroeconomics?
OK. We’ve two macroeconomic tools, fiscal and monetary policy. The balance as to stimulus or contraction is the balance of the two policies. So, when government does something fiscally contractionary – tax rises – it might well be appropriate for monetary policy to loosen and become more stimulatory.
That’s macroeconomics. Which Spud doesn’t grasp as yet.
The head of the central bank noted Rachel Reeves’s decision to increase taxes on employers, saying companies were “adjusting employment and hours and also having pay rises that are possibly less than they would have been if the [national insurance contributions] change hadn’t happened”.
Lol, this is like describing the Holomodor as an “adjustment to the peasants’ diet”. UK employers are desperately trying to get rid of as many UK employees as they can now. I’ve never seen the jobs market take such a brutal turn after just one budget. Great news for Indian offshorers.
It’s a good job Ed Miliband is going to create millions of “well paid green jobs”. Any day now.
So when everybody is sitting around in caves banging rocks together we can celebrate that inflation has gone down?
Isn’t it Andrew Bailey’s job to notice or even gawdelpus anticipate that we are so far into shit that macroeconomic fiddling at the margins is totally inadequate?
The Bank and the Treasury have been in charge of this whole mess for a long time. Anything that happens is on them. Not the moronic ministers, their levers are not connected to anything.
Cyril Kornbluth was right.
@ rhoda
Did Andrew Bailey tell Rachel-from-customer-complaints that she should increase employers’ NI? Or was it the current replacement for Alastair Campbell?