Sunak, Truss and the Bank of England are lying to you – the UK economy is weak and rigged | latest news from nigerian newspapers today

Sunak, Truss and the Bank of England are lying to you – the UK economy is weak and rigged

Business & Economy

Perhaps you have been hoping that the age of lies is over. After all, Boris Johnson will soon be swept out of No 10 and whoever replaces him cannot be half as mendacious – can they? Liz Truss may love her pork markets but she can’t be as keen on telling pork pies. Well, I bring bad news. If lying is making a statement one knows to be false, then Britain is wading waist-deep into an era of systemic deceit.

I don’t just mean the permanently malfunctioning Truss, who this week complained she was “wilfully misrepresented” by, um, her very own press release. No, the fabrications come from across the political establishment and they concern the future of our economy. And the ultimate fruit of these lies may well be another Johnson or Nigel Farage.

Let’s start at the Bank of England which, this lunchtime, will almost certainly jack up borrowing costs, with possibly the biggest rate hike in more than 25 years. The signs are that the UK is sliding into recession, but no matter: for the Bank’s governor, Andrew Bailey, this is about bringing inflation to heel – “no ifs, no buts”, as he says, with all the pretend command of a flailing supply teacher. Yet the same Andrew Bailey admitted to MPs just this May that he was “helpless” to stop inflation. As his colleagues testified, what is driving up prices in the UK is the global shortage of key commodities, from oil to food to semiconductor chips. What’s not to blame is wage rises, not when – according to economists at UBS wealth management – 99% of British workers are getting poorer.

When inflation falls back, it will not be Threadneedle Street’s doing. Much more likely is a scenario akin to 2008, when the price of basics shot up so high economies tanked. By raising rates, Bailey wants to show he means business. What he is more likely to do is put firms out of business and sink households into a debt crisis.

Then there is growth, something all the contenders to be prime minister pretend they can summon up. Rishi Sunak vows to make the UK “the most prosperous place in the world”, while Truss issues promises about “unleashing”, “unshackling” and “unchaining” Brexit Britain, as if it were mouldering in some continental jail. Meanwhile, Keir Starmer swears only he can “reboot our economy”. Is your entire unitary state on the blink? Then the leader of the opposition will be right round to turn it off and on again!

The politicians are perpetrating the same scam as the rate-setters, bluffing they can get the old economic machinery working like before just by pulling this or that lever. Yet whether in Westminster or the City, both sides are flogging false optimism – and they know it.Over the past 50 years, almost every government has overseen lower economic growth than its predecessor – even as it has promised the opposite. That’s according to figures produced for this column by Kevin Albertson, a professor of economics at Manchester Metropolitan University. He analysed national income per person, adjusted for inflation, and then calculated a yearly rate of GDP growth for each prime minister. The end results are the sort of ugly truth Britain badly needs.

Even in this Tory leadership contest, Margaret Thatcher has been ordained as the prime minister who saved Britain’s economy. The reality is that economic growth during her reign was lower than under Harold Wilson and Jim Callaghan. Then came Tony Blair, who by 2005 was still promising “New Labour, New Prosperity”, even while his government underperformed Thatcher’s. Blair also claimed “our economy is stronger and more stable than for generations”, which sounded laughably hollow two years later when Northern Rock fell over and the credit crisis began. Still, David Cameron did little better and Theresa May’s administration was truly abysmal.

This is half a century of an economy becoming ever more stagnant, even as its leaders point excitedly to any passing ripple. And those ripples have normally meant more debt: Albertson’s analysis shows that every extra £1 of real GDP growth between Thatcher and the great banking crash came with nearly £2 of borrowing by households and government.

This is the country described by political economists such as Brett Christophers, Colin Crouch and the Centre for Research on Socio-cultural Change: an economy in which those at the top don’t go in for investment in research or technology but speculation and asset-stripping, and where governments dare not enquire too closely where private money is coming from and on what terms. This is an economic model that prizes its past – elderly people and asset owners – more than its future. Westminster’s usual fantasy fixes about big data or building on the green belt look risibly small against this backdrop. As Woody Allen nearly said, if you want to make God laugh, tell him your plans – but to give Him a really good giggle, say your plans were drawn up by the Taxpayers’ Alliance.

We hear lies all the time, of course, about Brexit or pandemic preparedness. But the thing about economic lies is that we can easily rumble them – by checking our own pockets to see if we’re better off. Government after government has promised that if we work hard, we’ll get on – and they’ve not held their end of the bargain. The Resolution Foundation’s latest report, Stagnation Nation (a telling title, that one), makes the remarkable observation that every worker aged 31 and under “has never worked in an economy with sustained average wage rises”. That is eight million people, or about a quarter of the labour force, who have never seen work provide a rising standard of living.

Posing in front of posters with babies, Cameron pretended his spending cuts were to relieve the young of the worry of debt. What he actually did, as some of us warned at the time, was plunge an entire generation into permanent precarity.

The answer to this isn’t declinism, but realism. The UK is a very rich country. We can afford for kids not to go hungry during school holidays and for our grandparents not to freeze in winter. But rather than the usual delusions about Britain winning “the global race” or the economic pie getting exponentially bigger, it is time to focus on making the slices fairer, taking more away from those at the very top and sharing it out. If politicians keep peddling falsehoods about their strong and stable governments delivering a boom, then they can’t blame voters if they call them liars – and opt to listen to rather more entertaining fibbers with more spectacular stories to tell. The kind of yarn-spinners with whom they wouldn’t mind having a pint. That, you may recall, is partly how we ended up with Farage and Johnson in the first place. And it is a sure way of bringing on their successors.

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