The Great Bank Heist
A simple blog for you today. But an important one. The OBR forecast nobody wants you to see.
Cameron, Clegg, Osborne and lackeys thereof, keep making the household debt analogy. What would you do if you owed more money than was coming in? You would have to cut spending, right? Manage your debt.
Ironic then, that the government’s current fiscal policy has a very simple and direct effect on YOUR household debt. This is, in my opinion, one of the most vital (and at the same time the most under-publicised) statistics to come out of the Office for Budget Responsibility:
Ahead of Osborne’s emergency budget, the forecast of the OBR for household debt (i.e. the money an average UK household owes, incl. secured loans like mortgages) had been:
This showed a predicted decrease of household debt as a percentage of household income, from 150% in 2010 to 143% in 2014. This had to be revised for Osborne’s emergency budget:
The decrease is now less sharp between 2010 (151%) and 2014 (146%) and actually flat-lines in the last three years of the forecast. Ahead of Osborne’s recent budget, however, as the cuts bite and growth stutters, the OBR had to issue a correction, dramatically revising their forecasts to:
Not only are they no longer looking at a decrease in household debt. They are looking at a STONKING 20% increase over the next five years, from the original prediction of 143% pre-Osborne. In money terms, almost £500 billion is being added to MINE and YOUR personal debt. And this doesn’t even take into account the inevitable, approaching interest rate hike.
And so if you are wondering how the Conservatives can cut the national debt so much quicker than anyone else had forecast or advised, that any country abroad is having to do, this is how it is done: A simple transfer of state debt, bank-bail-out money debt, let’s-fight-a-war-in-Iraq debt from UK PLC to UK MUGS LTD.
And I don’t say that. The OBR, the independent government watchdog over money matters, says that.
UPDATE: Somebody commenting on this post in a forum said: As for the government “leaving the figures out of the book” or having a set of figures that “nobody wants you to see” – thereby implying they have something to hide – I think you’re being a tad harsh. If I was obliged to issue these figures and hoped to God that they’d somehow be glossed over, the very last thing I’d do is issue a special press release where this was the only thing being presented. I did a little research and this was my reply:
On this point, I think you are being a tad naive. I have worked in the civil service for many years. It is entirely bizarre, with a budget coming up in a months time for the revision to not be simply included in that, but be issued as a correction. There was no special press release, instead the OBR issued a release saying they would be updating some figures – very bland and giving absolutely no detail – and the correction just popped up on the Publications bit of their website.
And now put it in its “historical” context of that day. What else was happening? The Libya crisis was at its absolute peak – on that day started the botched evacuation, BP declared its workers not safe, Gaddafi made famous telecast saying he will get all dissidents from their lairs. 24hr coverage. That same day was the health worker’s union announcement that 50,000 NHS jobs were being cut. Rooney’s blackmail plot suspects were arrested.
Oh yes. And the Christchurch earthquake had happened in the early hours of the morning. What was that famous phrase that got Jo Moore in trouble? “A good day to bury bad news”?