peter's blog

Thought of the Day

Messrs Cable, Darling and Osborne, said to be the three potential Chancellors, were in 'animated' debate in a pre election sort of way, yesterday.  Darling has decided that employers should pay an even higher price for employing people, and then he will give it to the struggling small businesses that he chooses to support. Are we all going mad? And Osborne didn't wipe the floor with him.

Business grants

So Alistair Darling gave £4bn to small businesses that are in financial difficulty in his budget last week. Sounds good for small businesses, doesn't it? But wait.

1. Whose money is it that he is giving away? Some of it is small business's money, I think, and a lot of the rest comes from the average tax payer. So the Chancellor is taking taxes from the businesses that are doing well and giving it to those that are doing badly, so that in many cases, they can waste the money all over again.

Our pensions time-bomb

Antonia Senior in the Times today reports that every U.K.household owes £47,000 to public sector workers:

'If everyone (else) carries on as if nothing is wrong, and as if there is not a giant pension shaped bomb tick-tocking away at the heart of our financial system, we can delude ourselves its all going to be OK. The Emperor is wearing Prada, and all our demographic nightmares will be solved by wishing hard enough'.

If you look in the pub, the restaurant, the train, everyone is carrying on just the same. They don't believe that there is really a massive financial crisis around the corner. 60% of people believe that we can get out of the government's borrowing hole without making any cuts to front-line services.

A rock and a hard place

From the CBI monthly trends survey:

'Output prices are expected to rise among manufacturers over the next 3 months, despite signs that domestic orders remain muted and that output growth remains modest'.

Either manufacturers are kidding themselves about recovering price increases from their customers, in which case their profits will be worse than expected or have we got Stagflation coming? My company is not obtaining any price increases.

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