Blow for Hammond as borrowing widens amid consumer slowdown – Sky News

English: East entrance of HM Treasury Français...

English: East entrance of HM Treasury Français : Entrée Est de HM Treasury (Photo credit: Wikipedia)

Sky News reports that stalling VAT receipts held back UK Treasury revenues last month in the latest sign that higher inflation is holding back spending.

Blow for Hammond as borrowing widens amid consumer slowdown

At last, UK consumers have spotted the elephant in the room, Brexit will be seriously painful. On the back of higher prices, consumers have held back on expenditure. Another reason for Theresa May‘s to call a snap election, was to get in before the economy soured significantly.

This blog has consistently argued the risk of the economic downside following Brexit. The absence of detailed policies, costings and risk analysis in the Conservative Party 2017 Manifesto is deeply worrying. I am surprised that the media hasn’t yet focused on the downside risk, worst-case scenario of a hard-Brexit.

For sure the chickens will come home to roost.

I fear that Theresa May and her ministers will make a mess of Brexit negotiations but it’s not clear if the Conservatives will be ready to replace a sitting prime minister.

Am I being too pessimistic?

Thoughts?

‘One Belt, One Road’ and Hundreds of Highways – SouthFront: Analysis & Intelligence

Extent of Silk Route/Silk Road. Red is land ro...

Extent of Silk Route/Silk Road. Red is land route and the blue is the sea/water route. (Photo credit: Wikipedia)

A map indicating trading routes used around th...

A map indicating trading routes used around the 1st century CE centred on the Silk Road. (Photo credit: Wikipedia)

English: People of the Silk Road, Dunhuang, 9t...

English: People of the Silk Road, Dunhuang, 9th century. (Photo credit: Wikipedia)

Here’s a fascinating and comprehensive look at China‘s new Silk Road from SouthFront. The article highlights that China is building roads with speed unprecedented in human history.

Source: ‘One Belt, One Road’ and Hundreds of Highways

Since the financial crash of 2008, major Western governments, including the US, the UK, Germany, France etc. have all been very slow to invest heavily in public infrastructure. Well scoped public infrastructure projects have a multiplier effect on the economy. Sadly, in Europe, especially Southern Europe, German financial orthodoxy has prevailed, with the Fiscal Constraint throttling growth, in an attempt to justify the structural weakness of the Euro. By comparison, China is not constrained, with a powerful central government, ready to invest in infrastructure on an unprecedented scale.

By comparison, the IMF and Western central bankers play a cautious game – they are not yet ready to face up to the strategic challenge from China.

Thoughts?