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BANK OF ENGLAND The big story: Helpless feeling at the Bank of England Original article: https://mail.google.com/mail/u/0/?zx=mbc8j3ecg57q#inbox/FMfcgzGpFzrhSGrsgRNRhjHZgBmsHksq Original article: From The Telegraph Front Page PM Burgess COMMENTARY Why is it that the UK has ended 2022 in such an economic and political mess. I am reminded to an uncomfortable degree of why I migrated from the UK to North America in the 1960s. I was in my 20s and the opportunities in the UK seemed very bleak compared to what was possible in the United States or Canada. When I was at University I took two summer trips to Canada with the University Canada Club. The Club chartered two Boeing 707s from Air France to fly from London to New York in late May and the return in mid-September. At the time Americans could afford to holiday in Europe, but the Europeans could not afford to holiday in the United States, so these planes were normally flying empty across the Atlantic, west in the early summer and then back east at the end of the summer. As I remember, the Canada Club members paid just 75 pounds for the round trip ... not much more than 5% of the regular fare. We were allowed to work for the summer in Canada, but not in the United States. Most of us took Greyhound buses as soon as possible either to Montreal or Toronto. I travelled to Montreal overnight after spending about 20 hours in New York. I recall getting to the Canadian border at about 5am in the morning and the border officials being very confused by a bunch of students with very little money crossing the border. The bus was held up for almost 2 hours making the rest of the passengers quite angry. Few of us had much money and the officials had no knowledge of the arrangements that had been negotiated in Londeon to give is permission to work in Canada ... and of course at 5am it was difficult for them to verify our story! As soon as we got to Montreal we set about getting paid work. Some went West but I stayed in Montreal and quite soon was interviewing with the Foundation Company of Canada, one of the big construction companies. They were looking for surveyors to work on a survey for a new hydro power plant in Labrador. It required 'white water' canoeing experience and while I knew something about small boat sailing I did not qualify. But I did get a job as a laborer and was put in charge of a wheelbarrow helping to move dirt in a huge hole in the middle of Montral ... the site where the new Place Ville Marie would be built. I did not stay with this job very long ... the company knew of my modest experience on the water and I was given the job of 'safety boatman' on another worksite that was in the middle of the St. Lawrence River where the company had been contracted to remove a cargo ship that had sunk right in the middle and close to the entrance to the St. Lawrence Seaway that enabled big ships to navigate from the St. Lawrence River up to the Great Lakes. I started my shift at 4pm and finished at 8am, and was on the job seven days a week ... a work-week of about 112 hours and paid at Canadian union wages for construction work together with the overtime. I earned more money in this quite short summer job than I would ever make working in the UK for a full year!!!!!!!! Most everyone on the site was French Canadian and everyone spoke French. None of the other workers would give me the time of the day as a young student from England ... but this all changed wqhen one of the workboats got into trouble and needed the assistance of the 'safety boatman' at which point everyone suddenly became fluent in English in order to coordinate with me and get their problem resolved. The St. Lawrence flows at something over 5 knots at this point and a boat with no power can very quickly travel a long way downstream unless something is done quite quickly. One of the takeaways from this work in Montreal was that the Canadian workers were incredibly productive and though they were well paid by UK standards, the actual 'cost' of the work was lower than the cost of similar work done in the UK where worker productivity was low and rife with union 'feather-bedding'. Around this time Exxon ... that is Esso at the time ... built a new refinery at Fawley near Southampton in England, without a labor stoppage. This was extremely unusual and when the head of one of the most aggressive unions was interviewed on BBC, he said that there was no need to strike 'because the American managers solved problems by getting out in the mud, getting shoulder under, and working to solve the problem rather than sitting in a comfortable office and simply blaming the union workers for the problem!' The idea that the recent ... that is the more than decade long Conservative government of the UK has got itself into such a huge mess at this time in history reminds me of the 1960s and worries me intensely. I thought Margaret Thatcher had it right when she made it clear that the British worker was not 'owed anything' by the world at large, and it was only good hard and efficient work that was going to solve problems ... but that went away more recently after the aggressive financialization of the British economy that made it appear that Britain was doing well when in reality if was only a very few who were doing well and most were not ... a similar situation to the one that has emerged in the USA over a period of around four decades since Ronald Reagan. Things can be better ... but it will be difficult in both the UK and the USA. Fortunately President Biden is rather quietly doing a lot of what is needed without much fanfare and with little or no support from the Republicans and little meaningful recognitions from the media and the political pundits. The fact that there has been so much pretty good legislation in Washington during the past two years is remarkable given the razor thin majority in Congress that he has had to work with. 2023 and 2024 are not going to be easy, but maybe I will be surprised. I see many of the fundamentals of the modern world as being very strong ... but these fundamentals are not at all what the media wants to talk about and certainly not many at the 'top' of US decision making. I certainly hope that my little bit of optimism will bre realized!!!!!!!! Peter Burgess | ||
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The big story: Helpless feeling at the Bank of England
When the Governor of the Bank of England says he is going to sound 'apocalyptic' about the threat to food supplies, something is very wrong. Andrew Bailey admitted he and fellow monetary policymakers have felt helpless over the inflation shock sweeping Britain, 80% of which he suggested was down to external factors out of his remit of control. Mr Bailey described the outlook for food prices as a 'major worry' as he was grilled by MPs on the Treasury Select Committee over the Bank of England's response to surging inflation. Its chairman Mel Stride has accused the Bank of being 'slow off the mark' to raise interest rates, while Cabinet ministers have also pointed the finger at Threadneedle Street. Here is a summary of what Mr Bailey told MPs, while economist Gerard Lyons warns that groupthink plagues the Bank of England. One of those external factors Mr Bailey was talking about was the war in Ukraine, which has contributed to surging energy prices. The EU has warned that Vladimir Putin's war will slam the brakes on Europe's recovery as surging energy prices risk causing the economy to grind to a halt. In a bid to combat the crisis, the UK's energy regulator is considering plans to reset household gas and electricity bills more frequently. Ofgem says setting the energy price cap every three months rather than twice a year will help suppliers to manage their costs and help households benefit more quickly from any falling prices. Yet experts have warned that households face 'significant rises' in their bills if the plans go ahead. Read what the price cap changes mean for you. Get another job Motorists are also under growing pressure today as diesel prices hit a new record high. The Chancellor’s 5p cut to fuel duty has failed to stop carnage in global markets from hitting drivers in the pocket. What can you do in the battle against rising prices? A government minister has suggested that people who are struggling with the cost of living should work more hours or move to a better-paid job. Watch Rachel Maclean, the safeguarding minister, admitting the idea would not work for all households, as she said those with extra capacity could visit job centres to apply for either more hours or better rewarded employment. Where to invest While sky-high inflation will affect everyone this year, those who hold much of their wealth in cash are most at risk. Indeed, just eight small banks and building societies have put up savings rates since this month's rise in interest rates, despite high street lenders pushing up the cost of borrowing. Douglas Graham, 61, from Aberdeenshire, hopes to retire in the next two years after his children graduate from university and private school. However, he holds £345,000 in cash and has just £20,000 invested, which is solely in shares in Halfords, the car and bike parts retailer. Read advice from financial planners on what to do with the money. If you are interested in investing in the buy-to-let market, our tracker shows the areas of the UK with the best rental yields.
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