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Richard Murphy

@RichardJMurphy

Nov 20

I had a long discussion with a radio producer yesterday on what I thought was wrong with the Autumn Statement. We discussed the numbers but what I said is most important is not what was said, but what was not. That’s where the frightening bits are. A thread…..

[This is a long thread: if it appears to stop mid flow click the last post you can see and the rest should appear.]

It was a very long time ago that I realised that when looking at financial data - whether accounts or economics information - the key thing to look for is what is not made available.

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Richard Murphy

@RichardJMurphy

Nov 18

The government is going to pay our commercial banks £136 billion of excess interest over the next five years on money the government gifted to them using the QE process. That’s £27bn a year that could be used in the NHS and education. This is outrageous. A thread….

The key issue to understand here is that when the government made almost £900 billion of new money using the QE process that got spent into the economy via our commercial banks, like Lloyds, Barclays and Santander.

What happened as a result was that these banks ended up with over £900 billion supposedly on deposit account with the Bank of England. They are being paid Bank of England base interest rate on these deposits.

Read 14 tweets

Richard Murphy

@RichardJMurphy

Nov 17

Holding tax and national insurance allowances as they are is going to increase tax by over £400 for the average household next year. Add in £600 or more extra on fuel bills and everyone paying tax might be £1,000 worse off before we hear anything else from Hunt today.

Then there are the mortgage and rent rises that for many will be much bigger than these sums and could come to many thousands a year because of unnecessary interest rate rises, which Hunt is permitting. The outlook for 2023 that Hunt will be delivering is grim, by his choice.

On top of that, the Bank of England thinks recession will push up unemployment by at least a million people, and I suspect it could be more. Many small businesses (and larger ones too) might fail, alongside lots of public services because they will not be able to pay their bills.

Read 6 tweets

Richard Murphy

@RichardJMurphy

Nov 16

@RevRichardColes

Inflation is simple to explain @RevRichardColes. It’s a measure of the increase in prices in a month compared to the previous year. It is high now as the impact of Putin’s war works through the economy. That war has lasted less than a year so far. A quick thread…..

https://twitter.com/RevRichardColes/status/1592793257054187520

What this means is that right now we are comparing prices after Putin’s war began with those before it began. And since the war has pushed up energy and food prices, especially, the inflation rate is high right now.

IWhen Putin’s war has lasted more than a year we will compare prices after the war began with earlier high prices from months also after the war began. That means the rate of inflation is mathematically bound to fall unless we get another massive shock like that again.

Read 7 tweets

Richard Murphy

@RichardJMurphy

Nov 14

The UK’s national debt is a strange figure. For example, to most people's surprise it includes all our notes and coins, as well as premium bonds. But much more worrying is the fact that a significant part of it is created by what I think to be dubious accounting. A thread…

[This is a long thread. If it appears to stop mid-flow click the last tweet you can see and the rest should appear or click ‘see more replies’]

The way the national debt is calculated makes a massive difference when it comes to calculating so-called ‘fiscal black holes’, which are the supposed reason why we need to have austerity and tax rises now. But some of the accounting for this debt is dubious, to say the least.

Read 35 tweets

Richard Murphy

@RichardJMurphy

Nov 13

Jeremy Hunt is saying we cannot max out the national credit card this morning. This is total nonsense. There is no national credit card. Instead it’s the job of government to make the money we use. And since it can always make that money it can never max out on credit.

Hunt wants you to believe that we max out the national credit card. But no gov’t can do that because it’s an organisation unlike any other, with it’s own bank, which means it has no credit limits. Instead, the question is should it be creating more money for the common good now?

The answer to that is that of course the government should be creating more money right now. When households have less to spend, and when business investment is falling so banks aren’t lending and exports are knackered by Brexit, only gov’t spending can get us out of recession.

Read 8 tweets

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