Notwithstanding my remark to regular commenter, 'Antisthenes', down below somewhere, that "I do the misery round here!", I can also do 'cheerful'. I am helped in this by a piece at The Coffee House by John O'Neill in which he quotes "Citi’s Michael Saunders, Coffee House’s favorite economist". Happily, me not being an economics swot, the whole thing is illustrated by a diagram:
There is a current worry, shared by me until now, that Osborne's success in growing the economy has been based on credit laxity. Not so, according to Mr. Saunders, a high-powered analyst with Citi who shows real GDP in the pink broken line compared to real credit growth in the blue line. You can see the effects of 'Brown & Balls, the Brokers Men', just before the crash of 2008 when easy credit had gone out of control.
Since then, according to Citi's research, private companies, along with individuals, have been busy paying down debt:
The ratio of household debt to income is back to 2003 levels, and the ratio of
companies’ bank deposits to debts is the highest for 50 years. Even first-time
buyers, when they get on the ladder, are only spending 11 per cent of their
income on mortgage repayments.
If companies begin to spend, particularly those that have been hoarding cash for the past few years, and if part of that spending goes on higher wages then maybe, just maybe, the Tories will reap some electoral benefit in 2015. Of course, they could help themselves by raising the income level from £41k before people have to start paying the highest level of tax - now that would go right into the pockets of their natural supporters!
