Meet the economic vandals who caused the recession

The UK entered recession in the final quarter of 2023 after households cut back on spending, an entirely predictable consequence of real-terms pay cuts

The UK economy met the technical definition of recession after two consecutive quarters of economic contraction at the back end of 2023, but the economy has clearly been flatlining for significantly longer.

Overall the economy grew just a pathetic 0.1% across the whole of 2023, which is the worst performance in decades aside from the global financial sector meltdown and the coronavirus pandemic.

But even the 0.1% growth figure is deceptive because it doesn’t take account of population growth. If we factor in the actual size of the UK population, the per capita GDP stats tell us that the economy shrank every single quarter of 2023 (-0.1, -0.2, -0.4, -0.6).

The stated explanation for the economic contraction in the final quarter of 2023 is that "households cut back on spending" as if that just happened in a vacuum, rather than as a consequence of deliberate policy decisions by the government and the Bank of England.

Back in 2022 the head of the Bank of England Andrew Bailey (salary £498,000 per year) caused consternation by demanding "pay restraint" from British workers, as if they should just accept real-terms pay cuts for the good of the economy.

The Tory government has spent the last few years bitterly fighting trade unions in order to impose draconian real-terms pay cuts on millions of public sector workers, and now the economy is suffering the obvious consequences of reduced demand as hard-pressed families cut back on spending.

The stated justification for the policies of jacking up interest rates and stamping down on wages was to "get inflation down", but there are much more effective ways of achieving this without decimating family finances and driving the economy into recession.

Spain demonstrated the use of effective inflation reduction policies through targeted subsidies and direct market interventions (making public transport free for locals, price controls on staple products, fuel and energy subsidies, rent caps, excess profit taxes …) and achieved the lowest inflation rate of all the major Eurozone economies.

However direct reduction of the cost of living like this is inconceivable in Britain because the entire Westminster establishment order is addicted to the radically right-wing "free market" economic dogma that eschews direct government intervention.

They’d rather reduce the living standards of millions and tinker around with interest rates than do anything to actually help, even if that means deliberately causing a recession.

Between them the Tory government and the Bank of England have punished ordinary people to offset the greed of the rich, and driven the economy into recession for no good reason.

And just to rub it in our faces even more, the Tory chancellor Jeremy Hunt has reacted to the dire economic figures by implicitly admitting that the recession was created deliberately when he said it had been "expected", and he’s clearly intent on sticking to his obscene plans to reward the beneficiaries of the profiteer-driven inflation crisis with another round of tax cuts for corporations and the mega-rich, and to punish ordinary people with another brutal round of austerity cuts!