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The Writing on the Wall: Stagflation to Hit the UK Once More?
Posted on January 25, 2011 by pilkingtonphil

The UK economy has seen better days...

GDP figures are in for the UK in the final quarter of last year – and they’re bad… very bad. GDP shrank by 0.5%.

While the actual contraction seems to have been caused by the terrible weather, there is a general consensus that even if weather conditions had been normal, the economy probably wouldn’t have shown any growth.

So far, so bad – but now consider the fact that inflation has continued to climb; with the CPI (Consumer Price Index) moving up from 3.3% in November to 3.7% in December. That’s a pretty significant increase – especially for an economy showing negative GDP growth.

After the release of this data, many commentators are voicing their concerns that the UK might once again be facing ‘stagflation’.

Britain first fell into stagflation in the 1970s. That era was characterised by low-rates of economic growth and high-rates of unemployment, coupled with persistent inflation.

Some say that this circumstance cannot be accounted for in economic theory – this is nonsense; there are plenty of reasons why this might happen. In the 1970s the predominant causes were wage-gains by workers and the oil shocks – most notably the shock that occurred in 1973 when the US moved to supply the Israelis in the Yom-Kippur War. In response many Arab states waged economic war against Whitey, by raising the prices of oil dramatically.

The latter – the oils shocks – are generally referred to by economists as ‘exogenous’ or ‘external’ shocks – as in, much like the weather affecting the UK’s current economic growth, they come from ‘outside’ the economy at large. The former – the wage-gains by workers – however, were ‘endogenous’ or ‘internal’ to the economy at large.

Thus, the oil shocks passed – and high wages were tackled by the Thatcher government using the money supply to create large-scale unemployment; ending the inflationary crisis, while simultaneously destroying British industry. Tough medicine – to say the least.

Today, however, we’re in an altogether different situation. Rising prices simply shouldn’t be happening. Why? Well, we’re not seeing high-wages as a root cause. Add to this the fact that, with unemployment rising, spending by households has been taking persistent knocks.

So, what the hell is causing the inflation? Well, I’ve said it before: its a combination of bad weather adding to the cost of food and energy – coupled with that ever important factor of speculators making bets on these increases and thus pushing prices ever higher.

But the British government continue to look to the old solution of ‘slash and burn’ – indeed, the government expects that inflation will come down when they make their vicious cuts to public spending over the next two years.

Will this work? I’d guess not. We’ll probably see inflation come down a little as the weather eases up. But the speculators – flush with cash from the US government’s QE2 project – will continue to bet on the essentials of life, pushing up their prices and causing inflation.

All the Cameron governments’ cuts will achieve is more misery. As unemployment persists in the UK, the cuts will drag down incomes – but with Wall Street and The City continuing to push up prices, people will find it more and more difficult to afford the costs of living.

Dark days are on the horizon.

結果 (中文) 1:

← 经济学家和冲突的 InterestObama 和达沃斯: 哪里我是开始;因为我会再次回到那儿。→在墙上写: 滞胀再一次去英国吗?发表于 2011 年 1 月 25 日通过 pilkingtonphil英国经济有过好日子......GDP 数据都是在为英国在最后一个季度的最后一年 — — 和他们是坏人......非常糟糕。国内生产总值萎缩了 0.5%。虽然实际收缩似乎造成了恶劣的天气，还有一个普遍的共识，即使天气条件正常，经济可能不会看到有任何增长。到目前为止，所以不好 — — 但现在考虑这一事实，通胀继续攀登;与向上移动从 3.3%在 11 月至 3.7%去年 12 月 CPI (消费者价格指数)。这是相当显著的增加 — — 尤其是对经济出现负增长。后此数据的发布，许多评论家都表达自己的关切英国可能再次面临滞胀。英国第一次在 20 世纪 70 年代陷入滞胀。那个时代的特点是由低利率的经济增长和高利率的失业，加上通胀率持续。有人说，这种情况下不能占在经济理论 — — 这完全是无稽之谈;有很多原因为什么可能发生此错误。在 1970 年代的主要原因是工资收益由工人和石油冲击 — — 最明显的是发生在 1973 年当美国移动供应在赎罪日战争中的以色列人的冲击。在响应中许多阿拉伯国家白种人发动经济战争，通过大幅提高石油的价格。后者 — — 油冲击 — — 提及，通常由经济学家作为 '外源性' 或 '外部' 冲击 — — 一样，像天气影响，英国目前的经济增长，他们来自 '外部' 整个经济。前者 — — 工资增幅由工人 — — 不过，如果内源性或 '内部' 到整个经济。因此，石油冲击传递 — — 和高工资，解决由撒切尔政府动用货币供应量打造大规模的失业;同时摧毁英国工业，同时结束通胀危机。猛药 — — 至少可以说。今天，然而，我们在一个完全不同的情况。价格上涨只不应该发生。为什么呢?好吧，我们没有看到高工资的根本原因。添加到这事实，随着失业率上升，家庭支出业已持续的敲门声。So, what the hell is causing the inflation? Well, I’ve said it before: its a combination of bad weather adding to the cost of food and energy – coupled with that ever important factor of speculators making bets on these increases and thus pushing prices ever higher.But the British government continue to look to the old solution of ‘slash and burn’ – indeed, the government expects that inflation will come down when they make their vicious cuts to public spending over the next two years.Will this work? I’d guess not. We’ll probably see inflation come down a little as the weather eases up. But the speculators – flush with cash from the US government’s QE2 project – will continue to bet on the essentials of life, pushing up their prices and causing inflation.All the Cameron governments’ cuts will achieve is more misery. As unemployment persists in the UK, the cuts will drag down incomes – but with Wall Street and The City continuing to push up prices, people will find it more and more difficult to afford the costs of living.Dark days are on the horizon.

結果 (中文) 2:

←经济学家和InterestObama和达沃斯的冲突：我在哪里开始; 因为我将再次回到那里。→？在墙壁上书写：滞胀打英斗 发表于2011年1月25日通过pilkingtonphil 英国经济已经看到更好的日子...... GDP数据都在为英国在去年最后一个季度-他们“再坏的......很不好。国内生产总值下跌0.5％，而实际的收缩似乎已经造成恶劣的天气，有一个普遍的共识是，即使天气情况一直正常，经济可能不会表现出任何增长。到目前为止，如此糟糕-但现在考虑的是，通胀持续攀升; 随着CPI（居民消费价格指数）连升3.3％，11月为3.7％，12月。这是一个相当显著增加-尤其是对于经济出现GDP负增长。这一数据发布后，许多评论家都表达他们的担心，英国可能再次面临“滞胀”。英国第一个陷入滞胀20世纪70年代。。那个时代的特点是低利率的经济增长和高的失业率，加上持续的通货膨胀有人说，这种情况下不能占经济理论-这是无稽之谈; 有很多原因，这可能会发生。在20世纪70年代主要的原因是工资涨幅由工人和石油危机-最明显的是发生在1973年时，美国移动供应以色列人赎罪-日战争的冲击。在回答许多阿拉伯国家发动了对惠特尼经济战争，通过提高石油价格的急剧下降。后者-油的冲击-通常被称为经济学家的“外源”或“外部”冲击-如，很像影响天气英国当前的经济增长，他们来自“外部”整个经济的发展。前者-工资利得工人-不过，是'内生'或'内部'到整个经济的发展。因此，石油危机过去了-和高工资是由撒切尔政府采用货币供应量创造large-解决大规模失业; 结束通货膨胀危机，同时摧毁英国工业。猛药-至少可以说然而，今天，我们在一个完全不同的局面。不断上涨的价格根本不应该发生。为什么？好了，我们没有看到高工资的根源。添加到这样一个事实，即，随着失业率的上升，支出户一直采取持续的来临。那么，到底是怎么造成的通货膨胀？好了，我之前已经说过：恶劣的天气增加了食品和能源成本的组合-再加上以往任何时候都重要的投机者做这些增加投注因素，从而推动价格不断走高，但英国政府继续期待的“刀耕火种”的老办法-事实上，政府预计通胀将回落时，他们使他们的恶毒削减公共开支，在未来两年将这项工作？我想不会。我们可能会看到通胀回落一点点随着天气趋缓。但投机者-来自美国政府的第二轮量化宽松项目现金充裕-将继续赌上生命的必需品，推高其价格，造成通货膨胀。所有的卡梅伦政府的削减将实现更痛苦。由于失业率持续在英国，削减将拖累收入-但与华尔街和伦敦金融城继续推高价格，人们会发现它越来越难以负担生活费用。黑暗的日子已经在地平线上。

結果 (中文) 3:

←经济学家和interestobama和达沃斯的冲突：我从哪里开始；因为我将回到那里去。→
不祥之兆：滞胀打击英国一次吗？
发表于2011年1月25日的pilkingtonphil

英国经济已经看到更好的日子…

GDP数字在英国在去年四季度–他们糟糕…很糟糕。国内生产总值下降了0.5%。虽然实际的收缩似乎已经造成了可怕的天气，有一个普遍的共识，即使天气条件正常，经济可能不会显示任何增长。迄今为止，如此糟糕的，但现在考虑的事实，通货膨胀继续攀升；与消费物价指数（消费者物价指数）从十一月的3.7%上升到十二月的3.3%。特别是对于经济呈现负增长非常显著的增加–。

该数据公布后，许多评论人士都表示担心，英国可能再次面临“滞胀”。

英国首次陷入滞胀年代。这个时代的特点是低经济增长和高失业率，再加上持续的通货膨胀，有些人说，这种情况不能在经济理论中解释，这是无稽之谈，有很多理由可能发生这种情况。在上世纪70年代，主要原因是由工人的工资和收益的石油冲击–最明显的是在1973时，我们搬到了供应以色列在赎罪日战争中发生的冲击。