Tuesday, 18 October 2011

Inflating Osbourne

Today confirmed the misery that the majority of the people are facing.

Inflation is at 5.2% at the Consumer price index, the government chosen measure of inflation, with the retail price index moving up to 5.6%.

Last weeks news that the Bank of England will pump another £75 billion into the banks will generate even more inflation.

As a result of the higher inflation, government spending on pensions and other benefits will be £1.2 billion higher in 2012/13 than the Office Budget Responsibility thought.

It is now looking like the Conservatives actions are starting to come home to bite them, because of their cuts and loose economic language they have curtailed growth, they are a failed government that does not have a "coherent and credible" plan for growth.

So we are in a cycle of rising unemployment and higher benefits payments, low wage increases and lower spending with banks not lending meaning less investment in industry, we see a lost generation of 1million young unemployed.

With all this will the government actually cut the deficit at all, are we to see a lost decade of stagnant growth and high inflation.

Rachel Reeves MP, Labour's Shadow Chief Secretary to the Treasury, responding to today's inflation figures, said "January’s mistaken VAT rise has fuelled inflation and should be temporarily reversed to ease the squeeze on families and kick-start the economy. This would give a couple with children an average boost of £450 a year and is part of Labour's five point plan for jobs and growth. The Government also needs to do much more to stem soaring energy bills, especially when families are already being hit by the VAT rise and pensioners will get a lower winter fuel allowance this year.

"We need an emergency budget for jobs and growth now because with every day that passes when Ministers just sit on their hands living standards are squeezed harder, more businesses go bust and hundreds more people join the dole queue."

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