Friday, January 04, 2008

Darkening Skies

With energy prices going through the roof, BOM readers will enjoy watching this cutting edge Labour Party Political from February 1974. It's housewife superstar Shirley Williams on the Shopping Baskets, accompanied by pipsqueak maestro Denis Healey on the Big Desk, claiming economic competence by black kettling the Tories' inflation record.

We thought it would be fun to see how the same shopping basket is doing in Bottler's "low inflation" Britain:

  • Bread- forget Shirl's three shilling loaf: the £1 loaf has now arrived: price up 8.9% over the last 12 months, a virtual doubling since 2000;

  • Eggs- up an eye-watering 26.2% in the last 12 months; 45.5% since 1997;
  • Cheese- up "only" 5.4% in 12 months, but accelerating sharply in response to a 16% hike in milk prices- buy now
  • Beef- down by 2.6% in 12 months, and only up 5.7% since 1997- the value buy in Labour's basket... unless you're a beef farmer, of course

Overall, the ONS reckons food is up 5.1% in the last 12 months. That's way higher than Bottler's 2.1% headline CPI, and higher even than the more relevant 4.3% RPI increase. And just for comparison, average earnings are up 4.0%. The pinch has arrived.

Meanwhile, the sky is darkening by the minute. Energy prices, credit crunch, stagflation... it's all brewing up into that dreaded perfect storm (if you'd like a good reason to slit your wrists, read this outlook from Larry Elliott, the Guardian's Economics Editor, and co-author of the excellent Fantasy Island).

The one surprise is that mainstream economic forecasters are not actually calling a storm. The Economist's latest poll of forecasters shows they still expect UK GDP to grow by 2% this year, the US also by 2%, and the Euro area by... well, waddyaknow, 2% (OK, 1.9%).

But as the splendid Mr Stelzer always reminds us, economic forecasters were invented to make weather forecasters look good. So we'll see.

PS What on earth should we make of that James Alexander dude who posted the vid? I only stumbled across him while rootling through YouTube's party politicals, but he turns out to be Labour PPC for the new constituency of York Outer (which I thought was the paper wrapper on an old-style Yorkie Bar- check it out here). He's keen. He's posted no fewer than 381 vids, each top and tailed by a nauseating and toe-curling puff for himself. Indeed, he's so pushy and self-promoting, I at first thought he must be a B'Stard style YouTube parody. But no. He really is the PPC for York Outer, and has posted a personal testimonial from Millipede to prove it. No wonder we're all so revolted by politicos. Yukky yukky yuk yuk.