Do they think we are stupid?

 Britain is far from Great anymore. The economy seems incapable of growing. Productivity is stagnant and Britain isnt keeping pace with our competitors eg the USA.  We are getting relatively poorer. Our leaders are weak and feeble.  Rishi comes across as an accountant auditor. Starmer the lawyer that does know how to run a business. At least our leaders are under retirement age and not about to drop dead from old age. So what can we do to change the fortunes of the country? Historically the City of London was the power house of the economy.  That's far from true anymore.  The Stock Market is a shadow of it's former self. There are very few new listings.  Increasingly companies are moving into private ownership.  When there is an opportunity for new listings, companies elect to be listed elsewhere eg Nasdaq because the UK stock market is seen as boring and low growth. For example the UK based tech company ARM listed on Nasdaq rather than the LSE in orde...

Well it's the 6th March 2024 and in a few hours we will find out what the Chancellor has in store for us.  It seems that much of the budget has already been leaked. 2p off National Insurance is the headline. This follows a 2p reduction in employee National Insurance last year which took effect in February this year. So what is National Insurance?  Well the question should be "what is it supposed to be?". Originally it was intended to be funding for State Pension. In other words our National Insurance contributions would be paid back to us in old age.  Apparently we are all living longer and with an ageing population the burden of more non economically productive Old Age Pensioners surely should mean we should be saving more for old age - not less? Well not according to the Chancellor.   The problem really is that successive Governments have treated National Insurance as general taxation.  In other words the basic rate of tax is not 20% but currently 30%. an...

From the 1st April 2024, the UK minimum wage will increase from £10.42 to £11.44 - a massive 9.8% increase - far in excess of current inflation circa 4%. I accept it is hard to live on the minimum wage however this increase is inflationary. It also means the Government doesnt have to stump the cash - employers do. So lets look at the numbers and why the government wants to increase the minimum wage by so much - the answer is tax revenues of course.... How many people are on minimum wage in the UK? The Low Pay Commission estimates there are about 1.6 million people on minimum wage. Although they have not provided any data, they suggest workers typically work 24 -30 hours per week. Workers are entitled to 5.6 weeks statutory paid holiday per year (28 days).  This is pro rata for part-time work. So let's work out an example.  Let's assume someone works 24 hours (3 days) per week and they work for 1 year. In one year they will have 156 paid days and actually work 139.2 days. ...

 In the UK, the Junior Doctor's strike shows no sign of ending.  They claim they are poorly paid - placards claiming it's £15 per hour. Well what is the reality? The pay scale is public information so let's do some analysis. First let's gather the facts: Foundation Doctor Year 1 (FY1) has a salary of £32,398 Foundation Doctor Year 2 (FY2) has a salary of £37,303   You can still be considered a Junior Doctor when your salary is £63,152 Their contracted hours are 40 hours per week + 8 hours overtime.  There are additional weekend allowances, night work enhancement, on-call availability allowance etc. 6 weeks holiday per year  (30 days) + 8 public holidays.  If you have to work on a public holidays you get 2 days in lieu. Where does the £15/hour claim come from? If we take a year 1 Junior doctor - someone straight from University with little experience - then their salary is £32,988.  Someone has assumed they work 52 weeks per year for 5 days pe...

 This year has not been a good year for water companies and the disgusting scale of how much sewage is pumped into our rivers has become mainstream news.  There is real anger at the water companies. Outflows are meant to be the exception but it seems for those that are monitored, they are pumping sewage into the rivers about 30% of the time.  Who knows what the ones that aren't monitored are doing.  Apparently 8mm of rain per hours  is considered a storm by water companies and is enough to trigger raw sewage overflowing.  Insurers consider 25mm to be a storm so 8mm is more like a modest soaking than a storm. Since privatisation, water bills have increased by 40% compared to inflation, investment has declined 17% and £72 billion has been paid in dividends. The water companies are now saying they will have to spend billions (that they have given to shareholders) to catch-up with the service they should be delivering.  Where are they expecting to get thes...

 As we are in an era of supply side inflation, I thought it would be interesting to ask Chat GPT what it would do? " how do you tackle supply side inflation?" Here's it's response with my commentary in italics: Supply-side inflation occurs when the costs of production for goods and services increase, leading to an upward pressure on prices. To tackle supply-side inflation, governments and central banks can consider various strategies: Structural Reforms: Implement long-term structural reforms to improve the efficiency and productivity of the economy. These reforms can include labor market reforms, deregulation, reducing trade barriers, and improving infrastructure. OK the government is trying to reduce trade barriers as a result of Brexit. It is not being done to tackle inflation. Not being done. Investment in Human Capital: Enhance education and training programs to improve the skills of the workforce. A more skilled workforce can lead to higher productivity and...

 Today the Office for National Statistics released the UK inflation data for the year to July 23. On the surface the headline news is positive - inflation is being tamed and it fell from 7.3% for the year to June 23 to 6.4% to July 23.  That's a 0.9% drop. Although it's never a good idea to do percentages of percentages but I will anyway!  It's an impressive 12.3% drop ! Sadly the Bank of England will almost definitely increase interest rates again.  6.4% is still higher than their target of 2% and the unemployment increase from yesterdays data wasn't big enough. They want to punish us naughty people that are causing inflation. They will prescribe more bad medicine. Rate hikes - here they come. The reality remains this inflation is supply side inflation not demand side inflation. The reality remains that food inflation is high and the UK imports >50% of food so we are importing inflation. The reality is the bond yield curve has inverted - a clear signal we are ent...