Unemployment and inflation rising, as British capitalism crumbles!

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THE number of people unemployed in the UK rose by 43,000 to 2.5 million during the three months to February, the highest figure since 1994.

The rate of unemployment now stands at 8 per cent – the highest since 1996.

However, the total number of people claiming unemployment benefit fell in March by 32,900 to 1.54 million – a much sharper fall than expected. This is due to the big efforts by the government to remove unemployed workers from the JobSeeker’s Allowance, in order to cut government expenditure. This offensive has seen the claimant count fall for four out of the last five months – nevertheless unemployment is remorselessly rising.

The Office for National Statistics (ONS) government figures showed youth unemployment had reached 929,000 16 to 24-year-olds out of work in the December to February period – a rise of 4,000 on the previous three months. At the other end of the scale, unemployment among the over-50s rose by 7,000 to 396,000.

There was also a rise in the number of people classed as economically inactive. It rose by 110,000 to a record total of 8.16 million, equivalent to 21.5 per cent of the population. The majority of that rise was due to an increase in the number of students, as young people decided to enter education after failing to get a job.

The number of people in employment fell by 89,000 in the first quarter to reach 28.82 million.

Ahead, after the May 6th election, there are savage cuts, with the bourgeoisie stressing that up to 500,000 public sector jobs must go, condemning many more workers to unemployment.

At the same time as the slump is set to deepen, when there is already over 21 per cent of the population of working age not working, a massive price inflation is rapidly developing.

On Tuesday the ONS issued statistics to show that the UK Consumer Prices Index inflation rate rose sharply to 3.4 per cent in March from 3 per cent in the month before.

The Retail Prices Index (RPI) inflation rate, which includes housing costs, also rose sharply to 4.4 per cent in March from 3.7 per cent. The RPIX inflation rate which excludes mortgage interest rates was at 4.8 per cent.

The government’s target inflation figure is two per cent. Already the inflation rate is over twice that figure. Already millions of workers, and also sections of the middle class are being pushed further and further down the road of poverty and hopelessness.

Capitalism is now managing to combine record inflation, with deflation, rising unemployment and collapses of the productive forces.

The key to this situation is the escalating price of oil. It is being driven up as the imperialist powers make it clear that they are getting nearer and nearer to a great war in the Gulf.

The tensions associated with such a development are forcing oil prices ever higher, and with that the prices of most other commodities.

The prospect for the UK is that this crisis is going to come to a head.

This may well take the form of the shock of a hung parliament after May 6th combining with a further rise in the inflation rate to bring about a run on sterling that will require a major hike in interest rates to try to halt it.

Such a rates hike will bring with it a massive increase in unemployment and also see large numbers of people losing their homes, as the economy and the currency crashes.

This the kind of crisis that bankrupt British capitalism is rapidly approaching.

The bourgeoisie will seek to resolve it by forcing the working class and the middle class to accept huge increases in taxation and cuts in jobs and wages.

The only way that the working class can resolve such a crisis is through organising a general strike to bring the government down, rapidly creating the conditions for a socialist revolution to expropriate the bosses and bankers to bring in socialism.

In this situation the question of revolutionary leadership will be decisive.

Only the WRP is building the revolutionary leadership that will be able to lead the working class to the taking of power. Join it today.