"UK economy bounces back” trumpeted the Financial Times’ front page on Tuesday of this week.
There’s a growing trend in the media to talk up the possibility of green shoots of recovery.
Don’t believe the hype.
The British economy remains very fragile. Much of this growth comes from driving up house prices through various “help to buy” schemes.
This is a replay of the debt-fuelled “boom” that paved the way for the recession in the first place.
Higher house prices don’t help those who are struggling to find a home. And if the banks raise their interest rates then swathes of people won’t be able to pay their mortgages.
Global trends could easily wipe out the paltry recent gains in Britain.
Chinese growth is slowing. The depression in the southern Eurozone is not going away.
The fruits of any meagre growth we do see will be very narrowly concentrated.
A recent study found that the wealth of the richest 7 percent of households rose almost 30 percent in the first two years of the US recovery.
But the rest of the population saw its wealth fall 4 percent.
Workers in Britain have seen their real wages fall in 36 of the 37 months since David Cameron became prime minister.
We won’t get that back—unless the unions wage a real fight against the bosses and the Tories.