This morning’s GDP information from the Workplace for Nationwide Statistics suggests the UK remains to be heading for deeply troubled occasions, courtesy of the Financial institution of England.

The ONS information reveals:

• Month-to-month actual gross home product (GDP) is estimated to have grown by 0.2% in April 2023, after a fall of 0.3% in March 2023.
• Wanting on the broader image, GDP grew by 0.1% within the three months to April 2023.
• The companies sector grew by 0.3% in April 2023, following a 0.5% fall in March 2023, and was the primary contributor to the expansion in month-to-month GDP in April.
• Output in consumer-facing companies grew by 1.0% in April 2023, following a fall of 0.8% in March 2023.
• Manufacturing output fell by 0.3% in April 2023, after progress of 0.7% in March 2023.
• The development sector fell by 0.6% in April 2023, following progress of 0.2% in March 2023.

Most individuals would possibly assume progress is sweet. Definitely, Rishi Sunak does. He has promised it to the nation.

However Sunak’s opinion doesn’t matter. All that issues is that of the Financial institution of England, nonetheless mistaken they could be. And on high of ONS wages information from earlier this week that confirmed that non-public sector wages have solely fallen in actual phrases by beneath 2% within the final yr and that state sector wages have in actual phrases solely fallen by a bit over 3%, this new progress information will likely be triggering alarm bells on the Financial institution of England.

The reason being straightforward to elucidate. The Financial institution of England has just one job to do. That’s to chop inflation. And thus far, they don’t seem to be doing it in addition to different nations, just like the US, the place it’s now round 4% and the EU, the place it’s now round 6%, when it stays over 8% right here within the UK.

The Financial institution additionally solely has one device to manage inflation. That’s crashing the financial system. I do know it’s mentioned that the one device is the financial institution base charge, however that’s now not true. They’ll additionally use quantitative tightening, which implies the Financial institution sells off gilts they personal that had been purchased throughout the quantitative easing years. This reduces the cash provide by decreasing the availability of credit score to markets, and with out credit score nothing grows. So, let’s summarise their obtainable device as crashing the financial system, whichever approach they will.

As markets are conscious of the Financial institution of England’s lack of sophistication and small-minded obsession with eliminating any trace of financial well-being, most particularly on the subject of these with the audacity to borrow to place a roof over their heads, these markets expect the Financial institution of England to push up rates of interest once more, quickly.  This was the 2-year gilt yield chart very first thing this morning, as reported by Market Watch:

The market is now forcing two-year gilt charges above these seen after the Truss / Kwarteng fiasco (which was by no means their fault – a lot as I hate to say it – as a result of it was truly triggered by the Financial institution of England asserting £80 billion of quantitative tightening the day earlier than Kwarteng spoke, and that’s what spooked the markets – as we all know as a direct dose of quantitative easing thereafter calmed them once more).

I believe this 2-year gilt charge will go larger.

I additionally suspect the Financial institution of England base charge to rise, once more.

I’m certain that this can enhance mortgage charges, once more.

And I’m fairly sure this won’t have the slightest impression on inflation, which is able to proceed to come back down however extra slowly than elsewhere due to Brexit and the absence of free motion in UK labour markets.

So this morning’s rise in GDP just isn’t excellent news, in any respect. It simply heralds extra distress for debtors care of Andrew Bailey and his solid of misanthropes in Threadneedle Road, the place the Financial institution of England appointees to the Financial Coverage Committee (at the least) appear to share a dislike for humankind while having fun with its struggling in a approach that could be very exhausting to grasp.

And in the meantime, all the reasons for but extra authorities austerity will likely be practised by Jeremy Hunt and Rachel Reeves.

While you’re in an financial demise spiral just like the one the UK is in now, it’s exhausting to see a approach out until somebody seems who would possibly break the inevitable decline by chopping rates of interest, rising authorities spending and revisiting Brexit. With no such individual on the horizon, we’re in very deep hassle.