All seems to be getting rather cloudy and contradictory out there. Retail sales down in April, certainly consumers not buying certain goods to the same extent eg Flooring etc. Yet we are told the economy is growing and inflation still not tamed.

Well surely all these price rises have impoverished the ordinary consumer ? Rents and housing costs hugely up. Energy costs much higher than prepandemic. Copper prices shooting up. Council taxes up and allowances frozen. Everyone sucking on the consumers pocket yet apparently the worry is that ‘too much money is chasing too few goods’ and this must be borne down on with high rates.

It seems to me that inflation has nothing to do with the consumer. It is the direct consequence of government political choices to interfere in the economy in gross and dysfunctional ways based on nothing but the virtue narrative of Covid and now anthropogenic climate emergency and war. This is deliberately forcing energy prices ever upwards, and deliberately raising demand for copper based goods. So we are potentially wreaking the costs of the great con. You cannot solve input cost driven inflation caused by deliberate gov policy by holding/raising interest rates - or rather you can but the impact has to be recession because consumer demand IS NOT THE CAUSE. The people must shrink their lives back to pay for government folly.

We need a return to the proper duties of government including facilitating cheap and copious amounts of energy and allowing market economics to drive this not subsidies and central dictat about banning gas boilers and ICE cars and the such like.

Where are we going now ? Into recession not recovery ? Misguided economic self sabotage ?

The main inflationary pressures seem to be from services rather than goods and energy, from what I have read. Could it be that companies are charging more for services to meet increased salaries and higher taxes? Also wages generally have definitely risen significantly over the last year or so, meaning that governments fear greater purchasing power as prices for goods fall, so are perhaps keeping rates higher for longer as a preemptive measure.

As to how the economy can be growing when consumers and taxpayers are feeling under pressure, perhaps it is down to population growth. We're always hearing that GDP per capita is stagnant or falling, while overall GDP may be heading upwards.

Great post by NMKC. Agree with every word. Add in government over spending and excessively harsh taxation and you have a recipe for a very unpleasant economic outcome indeed. Hence the early election. Labour are really going to struggle with a very poisoned chalice. It's part of the Conservativeparty plan of course, to try to limit Labour to a one term government. By the end of the first term of a Labour administration things are likely to be (even more) dreadful.

Yes, according to ONS data...
https://www.ons.gov.uk/e...gdp/timeseries/ihxw/qna

And of course if I sell you a coffee, that adds to GDP. If you sell me a sausage roll back then we are all rich beyond our dreams!

GDP needs to be split between different products. If we all start drinking a bottle of whiskey a day this will increase GDP unless we are forgoing something else. Either way GDP does not necessarily relate to quality of life. Selfishly I am only concerned with my own (and family / friends / community) GDP / inflation rate which I can control quite easily. If anything my expenses / spending are going down so I would not be good for the economy ?