Results tagged “UK economy” from Birmingham Post - Business Blog
Households are pulling money out of their savings accounts at the fastest rate in recent times, according to recent Bank of England figures. It is perhaps the most telling sign yet that Brits are paying for the rising cost of living by raiding their piggy banks.
Over the last year, families have withdrawn £23bn from their long-term savings accounts to convert into cash and also put into current accounts - that's around £900 for every household in the country.
Analysis of the Bank's figures by Sky News shows that in the year to October, the amount of cash in notice deposit accounts and cash ISAs fell by 4.7%, while the amount families have in their instant access current accounts or in cash rose by 11.2%, or £71bn.
The British economy is thankfully on the up. But that doesn't mean George Osborne was right in arguing that 'Plan A' is working. Rather, the performance of the British economy since Osborne became Chancellor back in May 2010 has been pretty dire. The economy has grown by just 2.2% since then. And remember that the Office for Budget Responsibility (OBR) reckoned that the economy would have grown by over 8% by now. Some record.
In fact, this is the slowest recovery ever. The UK's GDP is still over 3% below where it was back in 2008. It is correct to say that the labour market has performed better than many expected (myself included). That's because firms have hoarded labour and productivity has dipped - not really something for Osborne to write home about.
This week's Comprehensive Spending Review set out the political landscape to the next General Election. It was simultaneously an utterly unnecessary yet remarkable event.
It was unnecessary as 'Comprehensive Spending Reviews' should really cover several years - usually three - whereas this covers just one, and even then for a one-year period after the next General Election (so determined are the Lib Dems to decouple themselves from the toxic coalition ahead of the election), and because the Review did nothing to stimulate growth here and now.
Last Sunday I put my name to a letter to The Observer (read here) outlining an alternative to both "austerity capitulation" and "deficit denial". It backed a four point plan developed by the think tank Compass and reads as follows:
The Chancellor George Osborne no doubt breathed a huge sigh of relief today when his earlier claim that 'the deficit is coming down' held up. But it was eye watering close.
Figures from the Office for National Statistics (see here) show government borrowing falling from £120.9 billion in 2011-12 to £86.2 billion in 2012-13.
But the latter 2012-13 figure was lowered by £28 billion by the Royal Mail pension transfer, and another £6.4 billion through the cash transferred to the Treasury from the Bank of England's Asset Purchase Facility.
Take out these two artificial factors and borrowing for 2012-13 came in at £120.6 billion. OK, that is just lower than the 2011-12 figure, but only just, at just £300 million less, or 0.3% less.