You read it here first
Even economic news seems to have a pre-election flavour.
Today’s government borrowing: horrendous, but less bad than expected, due to tax revenues above predictions. Well, yes. I made a couple of biggish purchases(1,2) back in December to get the lower rate of VAT. A small effect, but we saw a mini-boom in spending at the end of last year deflate this year when the tax break ended. Right now there’s a much bigger tax change looming: the huge rises in income taxes, particularly for higher earners. I expect that means that among others, anyone rich enough to use a tax advisor has brought their tax liabilities forward, so as to pay at this year’s rates – hence the improved tax take.
Corollary: March will be better than expected too, ahead of a collapse in the new tax year.
Yesterday’s news: unemployment down (that’s the headline). Also, employment down, but a rising number of people classed as economically inactive. They’re moving unemployment off the balance sheet. Should we call it Enron Unemployment, or now even Repo 105 Unemployment?
Actually that’s not entirely new. We’ve long had a system that prevents you signing on as unemployed if you’re doing or attempting anything worthwhile, even unpaid/charitable work. So if you have neither a living wage nor sufficient private resources, you’re stuck with a choice of enforced laziness on benefits or real poverty on nothing. Or – perhaps the least bad option – benefits fraud.