Today being Thursday, it is my normal shopping day. I set off five minutes early both to avail myself of an ATM in the wall of a larger supermarket. I also took the opportunity to hunt for some shoe cleaning products and eventually I had to ask for assistance. Going up and down the ‘normal’ shelves proved to be fruitless and eventually I had to ask for assistance because all of these products are stored on a carousel at the end of an aisle. I located what I wanted which was one of those wax-based cleaners that ‘flow’ onto a surface and eventually got I wanted and then managed to find some leather conditioner to go with it. Then I went off to do the normal shopping and bought myself a new pillow that Aldi were offering that I thought I might bring into use immediately. Then it was a case of getting home and doing an unpack before Meg and I had to get ourselves ready to go to the dentist. When we got there, we discovered that we should have filled in two forms on line on our mobiles. However, as we arrived several minutes early, I was quite happy to fill in two sets of forms (one set for each of us) before our treatment. The dentists did not appear to be particularly busy and we were seen promptly. Meg required no further treatment but I am going to require a filling and a crown so that is a pleasure to which to look forward. Then we got home and had some delayed elevenses in our own home. We followed the political news which is rapidly developing and then lunched on haddock fishcakes which is one of our favourites.
I have been trying to put the huge political row going on about the recent mini-budget which has handled out shed loads of money to those who already have quite enough of it. To try and simplify the essential elements of the mini-budget, I imagined the following scenario. Let us say that I approached my local bank manager and asked for a loan of, say, £1000. The inevitable question would be ‘what do you want the money for?’ to which I reply that I wanted the money to give as a birthday present to an extremely rich uncle who did not need it. On the other hand, there was a possibility that when he died, he might remember me in his will and I might receive a small inheritance. To the question ‘How do you intend to repay the loan’ I would reply that no doubt something might turn up and perhaps in the future I might have a better job to that would help with any repayments but I could not be sure. The bank manager would no doubt give me short shrift and refuse the loan within the space of seconds. It is not fanciful to suggest that this is a microcosm of what is happening in the wider financial markets. When the government have requested loans of £45 billion and then asked ‘for what use?’ and the answer becomes ‘to provide more money for the very rich in order to reduce the top of tax from 45% to 40%’, then it is no wonder that international investors have in effect said ‘Well, we will give you money but at a price’ which equates to much higher rates of interest. It is for this reason that even loyal Tory MPs have started to say ‘this inept madness hss got to stop’ and this is the more printable of what they are prepared to say in private but not on the record. In the meanwhile, the Government has a defence of its budget and are adamant that the turmoil in the financial markets is anything to do with them. Instead, Putin is often cited as the most immediate cause followed by the rider that most major western industrial economies are experiencing some jolts to their financial and monetary systems. But tbis very denial is lowering the credibility of the government in the eyes of international investors. Some defenders of the government, of whom thre are very few, are blaming ‘left-wing hedge fund managers determined to do the government down’ or even erstwhile ‘Leavers’ who are intent on destabilisation. The right wing ideologues, in whose eyes Liz Truss is a hero for breaking the financial orthodoxy, in the person of John Redwood, have even suggested that the Bank of England was the architect of its own misfortunes and unintentionally ‘started’ the run on the pension funds. In the meanwhile, the ordinary ‘man in the street’ particularly if employed in the public sector has endured a decade of less than inflation wage settlements. Moreover, he/she is faced with a further wage cut when inflation is of the order of 10% but wages do not keep up- and the government has decreed that every government department is faced with an inflation rate of 10% with no increase in budgets and is being forced to make efficiency savings that translates into loss of jobs and/or services or both. And, of course, a mortgage taken out at 2% will now be 6% when replaced by a variable rate mortgage and this is unaffordable.
© Mike Hart [2022]