UK CPI consumer price inflation remained unchanged at 2.7% in November, according to official data, despite the fact that there were big rises in food prices, with bread prices jumping in a series of 10p leaps. The biggest price rises were seen in the cost of fruit, bread and cereals, as well as in energy bills, the Office for National Statistics (ONS) confirmed.
The ONS maintained that these savage rises were balanced by falls in fuel and air ticket prices, allegedly leaving the average family’s struggle to survive unchanged from October.
The retail prices index (RPI) inflation, which includes housing costs, actually fell to 3% last month, according to the ONS, from 3.2% in October, despite the huge increases in the price of rented accommodation! Another statistical miracle, no doubt.
The consumer prices index (CPI) rate, which is targeted by the Bank of England, had jumped from a three-year low of 2.2% to 2.7% in October, a much bigger rise than had been expected and which came as a nasty shock in the City.
In fact, the bourgeois media, putting the best possible face on the developing inflation disaster had to say, about November’s figure – as did Rob Wood the chief economist at Berenberg bank – that ‘UK inflation paused for breath in November before it resumes its assault on the 3% mark over the next few months.’
Ahead are a mass of energy price rises, plus a further rise in food prices driven by the droughts in the US and Russia, and the monsoons in India, pushing up worldwide prices for grain and other foodstuffs.
The situation has now been reached where Carnet, the Canadian central banker shortly to be the Governor of the Bank of England, has suggested scrapping the Bank’s inflation targeting.
This means that the Bank, which was allegedly fighting inflation, is now set to encourage it, to try to get the economy growing by depreciating the pound, aiding exports, and increasing the price of imports, helping to cut wages and reduce debt.
Economist Chris Williamson observed yesterday: ‘The Bank of England will tolerate inflation to get the economy growing’.
There is now speculation that the Bank will retreat to a nominal gross domestic product (NGDP), meaning that it will measure the economy’s total economic output, but without adjusting for rising prices.
Bourgeois economists are already stating that the resulting bias towards higher inflation would help to make debts more manageable by slashing their ‘value’, and would encourage people to spend more for fear that their savings would shortly be worth nothing.
The bourgeoisie is toying with the notion of going from savage austerity to the brink of a Weimar-type runaway inflation.
It is in this situation, of mounting crisis, that the trade unions have the task of defending the living standards of the working class.
The first thing that must be done is that the unions must fight all sackings, and insist that instead of sackings there must be cuts in the hours worked with no loss of pay.
As inflation is let loose, the unions must draw up their own working class cost of living index, based on the price rises in the necessities of daily life that every working class family must purchase.
The unions must insist that wages, pensions and bene- fits must be automatically increased to match the increases in this cost of living index on a monthly basis.
This is the only way to defend the jobs and the living standards of the working class.
These struggles however must be the means to mobilise the working class to bring down the government and to go forward to a workers government and socialism, via a socialist revolution.
The alternatives of savage austerity or dizzy inflation spell out that the capitalist system is in its death agony, and that its replacement by socialism is the only way out of the crisis.