THE CBI bosses organisation yesterday foresaw a ‘recovery’ from the capitalist crisis, but was forced by circumstances beyond its control to admit that, at the most, it was of a completely technical character, a 0.2% rise in production, after a mammoth fall in the preceding year.
It therefore labelled its ‘recovery’ in 2010 a very ‘tough’ one in which unemployment and petrol prices will continue to rise, while of course living standards decline, or are crashed with wage freezes, wage cuts, benefit cuts and pension cuts – all leading to a deepening of the slump and a deepening of the economic and political crisis.
Growth in 2010 will therefore be ‘fragile’ according to the ‘shell-shocked’ CBI.
Revealing its latest economic forecast, the CBI said that near-term economic prospects are ‘brightening’. A recovery is said to be underway in the global economy, which has been ‘boosted by substantial fiscal and monetary stimuli’, and ‘the inventory cycle is starting to turn’, both at home and abroad, which is helping to lift production. However, it has to concede that the pace of recovery in 2010 is expected to be slow.
The CBI’s best possible variant for the crisis is one in which UK GDP will post quarter-on-quarter growth of 0.3% in 2009 Q3, edging up to 0.4% in Q4.
It is however forced to admit that the VAT increase in January 2010, when it returns to 17.5%, will have the effect of ‘dampening’ any consumer spending that is taking place.
After the general election, whenever it may be, will come the ‘savage cuts’, deflationary, through and through, which will bring an end to any slight revival in production, which will be seen as akin to the shuddering of a near death experience approaching its conclusion.
The CBI therefore foresees very weak growth in the first quarter of 2010, 0.1%, and leaves its attempt at forecasting at that.
It will go only as far as the second quarter of 2010, forecasting a 0.3% rise. After that comes the deluge.
Richard Lambert, CBI Director-General, said: ‘The outlook is improving as the UK draws strength from quantitative easing, a weak pound and a recovering global economy. Although growth this quarter should mark the end of the recession, conditions in the UK will remain tough for some time yet, and it is difficult to see where demand growth will come from.’
As Lambert says it is difficult, some would say impossible, to see where demand for commodities will come from, after huge, ‘savage’ cuts are imposed on the working class and the middle class.
The CBI says: ‘there is no clear driver of robust economic growth into 2010.’
It adds… ‘Growth next year will remain very weak, while job losses will continue and household consumption will stay tightly squeezed. The sharp fall in business investment this year is a real concern, as are the public finances, and both will affect UK economic prospects in the years to come.’
Thus, after five consecutive quarters of contraction, in which UK GDP has fallen by a cumulative 5.5%, the GDP will shudder forward a fraction of a per cent, before it gives up the ghost and the slump deepens.
The scale that spending power will be cut back can be estimated by the debts that have to be repaid. Net borrowing in 2009/10 will reach £176.2bn and £181.8bn in 2010/11, 12.6% of GDP.
There is only one way out of the developing and deepening capitalist crisis.
This is through a socialist revolution that will free the productive forces from the anarchy created by the private ownership of the means of production and the banks. It will establish a socialist planned economy, which will produce to satisfy people’s needs, and not to satisfy the bankers and bosses’ hunger for super profits.
