Britannia Radio

News on the economic battle!
It’s not surprising that the employment figures have held up well -
so far! Equally the delayed effect isn’t surprising either. For an
employer not to hire someone is a simple decision. But to take
someone on is dangerous in difficult times for this means taking on
obligations too, for it is difficult to fire an employee. Therefore
laws intended to protect employees have the effect of stopping some
of them getting jobs in the first place.

The government won’t mind because someone NOT having a job is nothing
like as politically damaging than someone losing their job.

Then I give the official figures for both the Consumer Price Index
(CPI) which the government uses for rerating pensions, the Retail
Price Index (RPI) which the unions use for wage bargaining and the
Food price index which is the biggest single component of pensioners’
expenditure. So pensioners , who cannot go on strike. get their
pensions increased by around 4.4% to pay 13.7% (or 12,3% according
to who is right!) more for their food.

xxxxxxxxxxxxxx cs
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GUARDIAN 11.8.08
UK loses £600bn in credit crunch
• Angela Balakrishnan

The credit crunch, which has dragged the UK economy to the brink of
recession, has wiped £600bn from the wealth of the UK - more than £1m
a minute - since the crisis began a year ago, accountants said today.

A study by PricewaterhouseCoopers showed that housing wealth has
plummeted by £400bn while sharp falls in the share prices ofbanks and
financial institutions have wiped out another £200bn.

With house prices suffering a record double-digit fall last month,
households are tightening their purse-strings and cutting back on
shopping.

PWC's research focused on the housing and financial sectors, as they
are particularly affected by the global tightening in lending. It
warned that consumer spending could fall by another £12-16bn as the
effects of the negative stockmarket and destruction in housing wealth
filter through. This will knock off up to 1% from the country's
entire GDP over the next year-and-a-half with additional impact on
employment and growth.

"The fall in wealth will mean that UK household spending growth is
likely to slow to just 0.5% in 2009," said John Hawksworth, head of
macroeconomics at PWC. "However, that will not be enough in itself to
push the UK into recession. We are sailing pretty close to recession
but it will take something else to push us over the edge."

But the accountants said that its perspective is "conservative", and
that this is its best case scenario, excluding the impact and likely
spill-over of other important related sectors.

Separately, a survey by the Chartered Institute of Personnel and
Development and financial services group KPMG found that more than a
quarter of all employers now plan to shed jobs over the next three
months.

The survey also revealed that the number of employers looking to take
on staff this September - traditionally the most buoyant time for
recruitment - dropped to only 29%, nearly 10 percentage points lower
than for the same period last year.

John Philpott, chief economist at the CIPD, said: "The jobs market
has been one of the few bright spots in the UK economy. But cracks
are appearing in the face of an increasingly uncertain economic
outlook."
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BBC ONLINE 12.8.08
UK inflation up to 4.4% in July

Rising food prices are pushing inflation higher

The UK's annual rate of inflation rose to 4.4% in July, up from 3.8%
in June and more than twice the government's 2% target, official
figures have shown.

The rise in the Consumer Prices Index (CPI) was higher than expected
and driven mainly rising food prices.

High petrol prices also helped to push up inflation as the data was
collected before the recent drop in oil prices.

Inflation as measured by the Retail Prices Index (RPI) - often used
in pay negotiations - rose to 5% from 4.6%.

Food prices jumped by a record 13.7% [The Guardian agrees at 13% but
The Times and the FT give this as +12.3% - ?? - see Times extracts
below - cs] over the year mainly as a result of surging meat prices -
particularly bacon, pork and poultry
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THE TIMES 12.8.08 EXTRACTS Only
Inflation surges to record 4.4% in July

( - - - - - - - - - - - - -)

The cost of living has risen for some households after another round
of punishing price increases by two major energy groups, despite a
slide in the wholesale price of gas and oil.

However, inflation has also been driven higher by record rises in the
cost of food, with food inflation spiralling to 12.3 per cent, [But
see BBC’s gigure above - cs] the biggest leap since 1997.

The cost of air travel also rose sharply, due to rocketing oil, with
prices increasing at an annual rate of 8.9 per cent, up from 5.4 per
cent in June.

Energy prices rose at 16.1 per cent in July, up from 13.8 per cent in
June, and economists say these could rise more as further price
increases kick in.

Households are grappling with rising energy costs after a number of
suppliers increases bills in recent weeks.

EDF was the first leading provider to raise bills for its five
million UK customers, increasing gas by 22 per cent and electricity
by 17 per cent.

However, British Gas went further and increased its gas bills by 35
per cent, and electricity by 9 per cent.

Scottish Power is among those expected to announce double-digit price
rises for its 5.2 million gas and electricity customers soon, while
E.ON, npower and Scottish & Southern Energy are also thought to be
preparing further rises to household bills.

The pressure on households' income was highlighted yesterday as the
price of goods leaving factories rose at the fastest pace since 1986.
====================
THE TIMES IN BRIEF 12.8.08

Water bills are next in line for a big rise
The increases, designed to pay for £27 billion of new water and
sewerage projects, would mean more misery for households

Dollar hits a high despite oil surge
Oil prices rose on the war between Russia and Georgia but the dollar
maintained its strength sending the pound to $1.91