Tuesday 1 February 2011

When growth is actually bad for you.

Hidden in the depths of the BBC is an article pointing out that the UK manufacturing sector has grown! Thankfully there are less biased organisations out there, who make this good news easier to find. The BBC is still blaming the UK & USA for the problems in Egypt. Bloody BBC! - but I'll save that for another time!

Back to the good news - after last week's disappointing negative growth, or flat growth, depending on if you take out the factor of snow (which yes, is actually crucial), today the Chartered Institute of Purchasing and Supply (CIPS) has announced that the UK manufacturing sector has expanded at its fastest pace since records began.

Good news for manufacturers

The boost has come from surprisingly high levels of demand from within the UK and abroad. But in the messed up economy we have inherited from Labour, high growth is actually bad. Bad I say.

How can growth in manufacturing be bad I hear you ask? Didn't evil Thatcher crush it 30 years ago? Surely a revival is good? Nope, nada. The growth is leading to inflationary pressure and as I've explained before, inflation in the UK economy right now, is very bad. The problem here is that the manufacturing sector uses a lot of raw materials and the cost of these materials is also rising at a high rate, leading to cost-push inflation (simply costs pushing up prices). More inflation will lead to the MPC voting for an increase in interest rates and then things really get tough.  

3 comments:

  1. I hate to ruin a good conspiracy theory but I've been trawling through the pages about Egypt and have found nothing about anyone blaming the UK and US.

    The site you keep linking to is mental, they seem to confuse individual opinion and debate with the beliefs of a whole corporation.

    Of course there are times when everyone feels there story isn't getting enough coverage, UKUncut protests were given barely any airtime, does that mean the BBC is pushing a right-wing agenda.

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  2. It was on Radio 4. BBC is 100% biased, not to the extreme of the folk at that blog put it across to be fair, but they definitely have a pro-Labour agenda.

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  3. Pretty sure a senior BBC editor just became Cameron's Director of Communications

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