INFLATION was at 8.7% in the year to May, the same rate as it was in April, creating hundreds of thousands of hungry families in the UK.
The response of the Bank of England to the developing crisis of capitalism has been to raise interest rates since the end of 2021 frantically cutting wages and jobs.
This has led to a mortgage crisis, with homeowners – a third of adults in the UK – facing large increases in repayments when fixed-term deals come to an end. First-time buyers are also at risk of being priced out of the market and going bust, ending up on the streets.
Yesterday, Chancellor Jeremy Hunt backed further interest rate rises saying he would not ‘hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy.’
Karen Ward, a member of Hunt’s economic advisory council and chief market strategist at JP Morgan Asset Management, said the Bank needs to ‘create a recession’ to curb soaring prices, arguing that it had ‘been too hesitant’ in its interest rate rises so far.
Ward said there were signs that wage rises were helping to force prices up. What the bosses require is wage cuts and a working class mired in poverty.
She said the bank must ‘create uncertainty and frailty’ in the economy to stop prices rising as fast. The lady added: ‘It’s only when companies feel nervous about the future that they will think “Well, maybe I won’t put through that price rise”, or workers, when they’re a little bit less confident about their job, think “Oh, I won’t push my boss for that higher pay”,’ she told the BBC’s Today programme.
Ward wants to return to the ‘climate of fear of the 1930’s when people were frightened to even question the boss under the beat, beat and beat again regime.
The bosses want to smash the working class and its trade unions. Figures released on Wednesday revealed the depth of their crisis and that the national debt was greater than the UK’s economic output for the first time since 1961.
Sunak and Co do have a programme for the developing capitalist catastrophe. That is to make war on the working class at home and make war on Russia in the Ukraine and in other areas to restore the power that imperialism once had, but was destroyed by the Russian revolution and the developing world socialist revolution. They now want to grab the wheat growing area of the Ukraine and are willing to support the Ukrainian fascists to seek to achieve it.
The Ukraine, the World Bank and other multilateral development bodies are all playing a key role in the Ukraine Recovery Conference which started yesterday.
The conference was co-hosted by British PM Sunak and the Ukrainian president who estimated that the total reconstruction bill for the Ukraine was estimated at $411bn in March, but that the continued fighting with Russia means that it will now be higher.
Sunak, a bankrupt at home, announced $3bn in World Bank loan guarantees, and told the delegates: ‘As we’ve seen in Bakhmut and Mariupol, what Russia cannot take it will seek to destroy. They want to do the same to Ukraine’s economy.’
He added: ‘President Zelensky’s government is determined to drive reforms to become more open, more transparent and ready for investment.’
When asked about the conference in a BBC interview, Zelensky said: ‘On the larger scale we are speaking about the transformation of Ukraine. This is Ukraine not only with its energy and agriculture and industrial complexes, but with its reforms we can see. This is the digitalisation of our country.’
The World Bank’s Anna Bjerde says Ukraine will need economic support for many years to come.
The billions of dollars poured in so far have ‘helped arrest what otherwise would have been even more devastating humanitarian impacts on the country’, she said, adding that Ukraine will also need to help itself.
Sunak’s plan is to turn the Ukraine into an imperialist dependency to weaken Russia and prepare the way for a revival of rule by the traditional imperialist powers. If that means starving the working class in the UK into submission and into a slave labour economy, it will be a price worth paying for the revival of UK and US imperialism.
The UK working class have clearly enough indicated with their strike wave that they have no intention of starving for the benefit of British imperialism. They must now use their great power to make the TUC call a general strike to bring down the Tories and bring in a workers government and socialism.
A British revolution will spread through Europe and Asia, to put and end to capitalism and imperialism, and bring in the World Socialist Republic. This is the way forward!
