Today the rate of inflation was listed at RPI at 4.8% or the CPI at 3.7%.
This effecting those on fixed incomes the hardest, once this would be typically would have been pensioners. But with public sector pay freezes and low pay rises in the low pay and unskilled jobs many millions of workers are effectively having their incomes squeezed.
This because the engine of inflation is imports, food, petrol, energy costs and utilities costs. The VAT rise that we are to endure at 20% will undoubtably increase inflation in the coming months.
The Bank of England would normally increase the base rate for borrowing, to control inflation, but because the government has deflated the economy, by tax increases to the majority, and mass job cuts in the public sector, the Bank of England have no room for action fearing another recession.
The government needs to strengthen the regulatory framework of the former public utilities, I see little evidence of competition delivering lower prices, I see more like a cartel in action.
There is a real need to develop a new economy, where employees are more than just passengers on route, governments of all colours talk about public sector reform, yet are silent on the private sector. Yes, they have laws to restrict trade unions, but what about democracy in the workplace for employees in private companies?
We effectively control banks in this country, RBS and Lloyds, yet they has failed to borrow to businesses that want to invest in expanding business, with the government setting a poor example with Forgemasters in Sheffield, there must be a case for an investment bank, or regional investment banks, we cannot depend on the City of London for taxes, like the Germans, we need a real economy.
Should there not be some linkage between the company tax cuts and training and research and development of companies, if we are to grow and create high quality jobs, then investment in people and product development will be required, shouldn't progressive companies be rewarded for this approach, like wise shouldn't less enlightened companies be punished, why should good companies have good staff poached by companies who don't invest in training?
If we want growth, I believe the government needs to be more proactive, than leaving it to the market.