Sunak, Truss and the Bank of England are lying to you – the UK economy is weak and rigged | Aditya Chakrabortty

PMaybe you were hoping that the age of lies was over. After all, Boris Johnson will soon be swept out of the number 10 and whoever replaces him can’t be half so dishonest – right? Liz Truss may love her pork markets, but she may not be so keen on telling pork pies. Well I bring bad news. When lying makes a statement that is known to be false, Britain is wading waist-deep into an era of systemic deception.

I’m not just talking about the permanently deranged Truss, who complained this week that she was “willfully misrepresented” in her own press release. No, the inventions come from across the political establishment and concern the future of our economy. And the ultimate fruit of those lies could well be another Johnson or Nigel Farage.

Let’s start with the Bank of England, which is almost certain to hike up borrowing costs later this afternoon with what may be the biggest rate hike in more than 25 years. The signs are that Great Britain is slipping into a recession, but no matter: For the governor of the bank, Andrew Bailey, it is a matter of getting inflation under control – “without ifs and buts”, as he says, with all pseudo-competence beating supply teacher. But the same Andrew Bailey only admitted in May before MPs that he was “helpless” to stop inflation. According to his colleagues, global shortages of key commodities, from oil to food to semiconductor chips, are pushing up prices in the UK. Wage increases are not to blame, not when – according to economists at UBS Wealth Management – 99% of UK workers are becoming poorer.

If inflation comes down, it won’t be Threadneedle Street’s doing. Much more likely is a scenario like 2008, when prices for basic commodities skyrocketed, causing the economy to falter. By raising interest rates, Bailey wants to show he means business. Rather, it will put companies out of business and throw households into a debt crisis.

Then there is growth, something that all prime ministerial candidates profess to be able to muster. Rishi Sunak vows to make Britain the “wealthiest place on earth” while Truss makes promises about “unleashing,” “unleashing” and “unleashing” Brexit Britain like it’s rotting in a continental prison. Meanwhile, Keir Starmer vows that only he can “reboot our economy.” Is your entire unitary state in upheaval? Then the leader of the opposition will be there to turn it off and on again!

Politicians commit the same fraud as rate-setters, bluffing that they can get the old economic machine working again simply by pulling this or that lever. But whether in Westminster or in the City, both sides are beating with false optimism – and they know it.

In the past 50 years, almost every government has experienced slower economic growth than its predecessor – despite promising to the contrary. That’s according to figures compiled for this column by Kevin Albertson, an economics professor at Manchester Metropolitan University. He analyzed the national income per person, adjusted for inflation, and then calculated it an annual GDP growth rate for each prime minister. The end result is the kind of ugly truth Britain badly needs.

Even in this Tory leadership contest, Margaret Thatcher was ordained Prime Minister who saved the British economy. The reality is that economic growth during her administration was slower than it was under Harold Wilson and Jim Callaghan. Then came Tony Blair, who was still promising “New Jobs, New Prosperity” in 2005, even though his government was lagging behind Thatcher’s. Blair also claimed “our economy is stronger and more resilient than it has been in generations,” which was laughably hollow two years later as Northern Rock fell and the credit crunch began. Despite this, David Cameron fared little better and Theresa May’s management was truly abysmal.

This is half a century of an economy that has become increasingly stagnant, even as its leaders excitedly point to each passing surge. And those waves have usually led to more debt: Albertson’s analysis shows that every extra pound of real GDP growth between Thatcher and the Great Bank Crash was accompanied by almost two pounds of household and government borrowing.

This is the country described by political economists like Brett Christophers, Colin Crouch, and the Center for Research on Socio-cultural Change: an economy where the very top invest not in research or technology, but in speculation and wealth. stripping, and where governments dare not ask too precisely where private money comes from and on what terms. This is an economic model that values ​​its past – older people and wealth owners – more than its future. Westminster’s usual fantasy fixes about big data or building the green belt seem ridiculously small against this backdrop. As Woody Allen almost said, if you want to make God laugh, tell him your plans – but to give Him a really good chuckle, say your plans were drafted by the Taxpayers’ Alliance.

Of course, we constantly hear lies about Brexit or preparing for a pandemic. But the thing about economic lies is that we can easily confuse them – by checking our own pockets to see if we’re better off. Government after government has promised that if we work hard we will get ahead – and they have not kept their end of the bargain. The Resolution Foundation’s most recent report, Stagnation Nation (a telling title, that one), makes the striking observation that every worker aged 31 and under “has never worked in an economy with sustained average wage increases.” That’s eight million people, or about a quarter of the labor force, who have never seen work provide a rising standard of living.

Posing in front of posters of babies, Cameron pretended his spending cuts would rid the youth of debt worries. What he did do, as some of us warned at the time, was plunge an entire generation into permanent precariousness.

The answer to this is not declinism, but realism. Great Britain is a very rich country. We can afford that children do not go hungry during school holidays and that our grandparents do not freeze in winter. But rather than the usual delusions of Britain winning “the global race” or the economic pie growing exponentially, it is time to focus on fairing the pieces, taking more from the top and dividing it up. If politicians continue to peddle untruths about how their strong and stable governments are delivering a boom, they don’t blame voters for calling them liars — and choose to listen to more entertaining fibbers with more spectacular stories. The kind of yarn spinners they’d love to have a pint with. As you may recall, that’s how we got to Farage and Johnson in the first place. And it’s a sure way of nurturing their followers.