Labour leader Ed Miliband has warned of an impending "crisis" as the cost of living outstrips wage rises for people on low and middle incomes.
In a speech he said people were working "harder for less" because of long-term changes to the British economy.
In an interview with the Sunday Times, the shadow chancellor warns of Britain's "cost of living crisis," and demands that George Osborne reverse the VAT increase. Much of his pleading is made on behalf ofof days ago – face punishment at the petrol pumps. motorists, who – as I pointed out a couple
"It is becoming impossible to find people to work," said Han Zhongliang, a 46-year-old factory boss from Hubei. "I have been here ten years and I used to have 30 to 40 employees. But this year I will be lucky to find 20 who can do the job are willing to work for the wage we offer: 5,000 yuan (£490) a month. If things keep on like this, there won't be any labour at all in South China in five years time. Since the Olympics, it has just been worse and worse for our business."
The Treasury has approved the MPC to buy up to a total of 150B pound of bonds through the creation of central bank's money. This represents 10% of GDP, 7.5% of broad money supply (M4), 12.3% of M4 by households and non-financial corporate and around 3% of the total assets of UK banks. The Chancellor also requested that among the 150B pounds, 50B pounds of which should be used to purchase private sector assets.
In the coming 3 months, the BOE will deploy the initial 75B pound in medium- to long- term gilts (outstanding maturities of 5- 25 years). The purpose of such policy is to boost broad money supply and credit and thus raise 'the rate of growth in nominal spending to a level consistent with meeting the inflation target in the medium term'.
The Bank of England claims to target (and hit) inflation two years hence. And as you can see, back at the start of 2009, the Bank of England's "central forecast" ...saw UK consumer price inflation slipping towards zero by the end of 2010...
Perhaps that's where the FT's economics editor got the idea that the Bank of England is about to raise rates. Because, if symmetrical targeting were really the aim, as stated, then an aggressive series of rate rises would surely be warranted by inflation running above the upper-tolerance of 3.0% for 13 months in a row.
In its latest quarterly report published today, the Bank upped the probability of inflation overshooting its 2% target over the next three years.
While it reiterated its central forecast that inflation will fall back to 2% in two years' time..., the Bank bases this on 'market expectations of rate rises' - the implication of which is that rates will go up this spring, with May as the best bet.
Mr Miliband said a single-earner couple on £44,000 a year with two children "sounds well off" but would be hard hit by the loss of their child benefit.He said the rise in VAT combined with the scrapping of child benefit, cutting the childcare element of working tax credit and public service cuts would hit families with children: "Taken together I believe these changes will mean a cost-of-living crisis for ordinary families in Britain which will have a deep impact for years to come".
And he suggested companies could be rewarded with tax incentives to pay staff a "living wage" - higher than the minimum wage - and encouraging companies to invest in training their employees to help them get on.
In short, any strategy for tackling the squeeze on living standards has to see unions and collective bargaining as part of the solution. The right get this, but from a wholly different political perspective - witness the assault on unions and collective bargaining in Wisconsin, or the Economist’s recent call to arms against public sector unions.