Alastair Hatchett

In an astonishingly frank speech yesterday, Mervyn King explained that high inflation had squeezed real take-home pay by 12% over the last few years. And this was on the day we learned that the economy had shrunk by 0.5% in the final quarter of 2010. Mervyn King also said that he expects CPI inflation to head to between 4% and 5% in the coming year so there will be no respite from this reduction in disposable income.

It seems without precedent for the Governor of the Bank of England to carefully calculate how much worse off we all are as a consequence of wage increases consistently falling below inflation and then to broadcast this to the whole nation. This might normally be calculated in-house and kept under wraps. Although IDS analysis of pay rises and inflation has been pointing to the differences over the past year or so.

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Brendan Barber

Yesterday’s dismal growth figures and the Governor’s revelation that ordinary people are paying a heavy price for the government’s economic policies, on top of huge cuts in vital services, make a plan B even more necessary.

In his budget the Chancellor must change course.

Above all the government needs a growth strategy that can get people back to work and the tax receipts flowing again to close the deficit.

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Richard Exell

Well, the Express certainly knows what to make of today’s statistics on the Work Capability Assessment (the test for Employment and Support Allowance).

75% on Sick are Skiving – benefit cheats are taking us to the cleaners

Its a rather strange front page for a newspaper, in that the statistics don’t show anything particularly new: the first table in the DWP report shows that the latest figures, for May 2010, are pretty similar to those for previous months, back to 2008, when the new Employment and Support Allowance was introduced.

Leaving that aside, the DWP figures don’t show that 75 per cent are skiving.  

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Philip Pearson

Ahead of a Coalition statement tomorrow on the future of our forests, the National Trust has issued a set of principles to “guide any proposed disposals”  that seem to suggest employment rights “may act as a barrier to outsourcing and thus accelerate job losses.” Have we got this right?

The NT’s principles have been sent to Government today, and are perhaps mean to help smooth the path for privatisation, given the public outcry that forest sales is provoking.  The principles follow consultations with other nature, wildlife and conservation groups.  But not trade unions. Nor the Committee on Climate Change. 

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Richard Exell

Prospect, the union organising scientists at the Forensic Science Service warns that closure threatens the ability to solve hundreds of “cold cases“. The Service’s archives, its specialist scientists and technology have all helped at least 38 police forces to review historic offences, producing convictions in 220 cases.

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Richard Exell

The Youth Action Network – a coalition that supports youth-led volunteering – is set to close, possibly as soon as September this year. YAN helps  100 organisations to support almost 400,000 young people to volunteer. Despite this, they will lose their grant from the Office for Civil Society  (responsible for the Big Society) in March.

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• That GDP number – some quick thoughts « Duncan’s Economic Blog
  Some useful points on today’s GDP figures from Duncan Weldon. He concludes that “going into 2011 we have rising unemployment, record youth unemployment, high inflation and a contracting economy. This isn’t looking great.”

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Anjum Klair

A survey by Children and Young People Now shows that that Children’s Services budgets are being slashed by an average of 13 per cent in the coming financial year.

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Nicola Smith

As Richard has said, the release of today’s GDP figures was accompanied by ONS’s Index of Services, which gives an indication of how the service sector has been faring in recent months. It shows that after strong growth earlier in the year the index was flat during November and between September to October it fell by -0.6 points.

This headline index also masks changes between different sectors, which show that while there was monthly output growth (between October and November) in distribution and transport, storage and communication there were also real monthly falls in output from hotels and restaurants, business services and finance and Government and other services. 

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Richard Exell

As Nicola has pointed out, today’s GDP figures are bad, very bad. The figures are the preliminary estimate for the last quarter of 2010 and it is important to remember that there will be a much more accurate figure next month. Even so, the 0.5 per cent fall from the previous quarter means that the economy grew by just 1.7 per cent last year. This shifts the overall picture from one of continued recovery (but with worrying weakness) to one that looks as if recovery has stalled:

The picture is much the same across most of the sectors of the economy:

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