THE latest Office of National Statistics (ONS) GDP figures show two quarters – six months – of zero growth in the British capitalist economy.
Official figures also revealed that last month’s borrowing figures were the highest ever recorded for the month of April at £10bn.
The figures revealed that household spending declined by 0.6 per cent, its biggest drop since the second quarter of 2009 after consumers saw and felt their wages being cut by rampant price inflation.
CPI inflation in the UK reached 4.5% in the 12 months to April, more than double the central bank’s target.
Bank of England Governor Mervyn King warned earlier this month it was likely to climb to 5% later this year, as gas and electricity bills rose by 15% or more.
Business investment also declined by 7.1% quarter-on-quarter – the biggest fall for two years.
The figures also confirmed that the construction sector declined 4% in the quarter, compared with a fall of 2.3% in the previous quarter.
The response of the OECD to the nose-diving UK economy is that interest rates in the UK must rise.
The OECD said that the UK should raise its key interest rate to 1% by the end of 2011, and to 2.25% by the end of 2012. This is, despite the fact that the price would be paid by many thousands of homeowners losing their homes while tens of thousands more workers will lose their jobs.
Dave Prentis, the Unison General Secretary, stated yesterday: ‘The government must think again to avoid our economy flatlining. A resuscitation plan must include action to protect jobs and the vital local services that provide a safety net for the most vulnerable, to safeguard growth and recovery.’
The Unite leader Len McCluskey warned: ‘The government’s economic credibility is in tatters but sadly it’s working people who are paying the price.
‘George Osborne has staked his reputation on cutting the deficit, but Tory-led economic policies are in such disarray he has actually managed to deliver a record increase in borrowing.’
He added: ‘Amazingly, the OECD is predicting a sluggish UK economy but is recommending more of the same measures from the government which is failing Britain and the rest of Europe. It is time to think differently and act differently. Just because it hurts does not mean it will work.’
The trade unions leaders do not utter a single word about bringing down this Tory-led coalition and bringing in a workers government that will carry out socialist policies!
Instead they urge the Tories to abandon savage cuts and deflation, and to embrace the Labour policy of less savage cuts and more inflation.
British capitalism is in a desperate crisis. The ONS has revealed that Public Sector net debt (excluding financial interventions to prop up banks) is at £910.1 billion (equivalent to 60.1% of GDP).
However the real debt figure, including save the bankers cash, is at £2,252 billion, equalling 148.9% of GDP. These horrific figures are going up, not coming down!
Neither savage cuts and deflation, nor less savage Labour cuts plus inflation can save British capitalism from collapse, or defend the interests of the working class.
Living standards and the Welfare State must be defended by the working class and not sacrificed to save the bosses and the bankers and their doomed system.
This means capitalism must be put an end to and socialism established.
The one-day strike action on June 30th must be transformed into a one-day general strike as preparation for an indefinite general strike to bring down the coalition and bring in a workers government and socialism.
This is the only way to defend the basic gains of the working class and to secure a future for the youth.
