2019 will be the least happy of New Years

The ONS has issued some worrying sectoral balance statistics (first chart below – click to enlarge), which show that for the last eight quarters running, domestic household expenditure has been propped up by borrowing. In other words households spent more than their incomes.

As is suggested by the increasing numbers of visitors to food banks, not just in general but among those actually working, I doubt very much this is discretionary borrowing. I suggest it is because family income is inadequate for day to day expenditure.

Certainly the second chart shows business investment to have taken a significant hit. If business was confident that the economy was booming, or even flourishing and that their potential customers had money to spend, then they would feel happy to invest. That they are not and that they have been gradually investing less throughout 2018 is distinctly disturbing.

Brexit or not, 2019 is looking like a very bumpy ride. And all the less comfortable for being entirely self-inflicted…


  1. Charles Adams -

    Thanks for the update Peter. As I keep saying, see e.g.


    sectoral balances are the most important indicator of what is going on in terms of the distributional flows of funds.

    We are in uncharted territory now with the longest period of household deficit since records began. The overseas deficit will likely fall but still unless the government decides to turn on the taps, it does not look promising.

    1. Peter May -

      Just what I think – it gives the lie to austerity is over. And continuimg austerity, together with Brexit will amount to a significantly self-harming New Year. That’s my miserable thought for Christmas day!

  2. Jennifer (aka Jeni, Havantaclu) Parsons -

    Perhaps not a Happy New Year, then.

    But to all friends of Progressive Pulse, I wish a very Merry Christmas, and raise a glass of Prosecco to say ‘Iechyd da’ for the coming year.

    1. Peter May -

      Thank you very much Jennifer, and from us to you, too. For me it’s Champagne – but it’s one of those that has been in the cellar for a good five years, probably more. For Champagne I always find age much more important than price or provenance – older is also is usually less gassy. It’s almost as if it takes time to become more like Prosecco! No wonder Champagne is losing sales to Prosecco…

  3. Ivan Horrocks -

    As Charles notes, Peter, we really are in uncharted territory here. Add to that the carnage across the various stock markets created by Trump and his appalingly unqualified acolytes – where his behaviour and their lack of expertise and skills will only worsen in 2019 – and we really are in for a rough ride, and not just here in the UK from the disasterous Brexit saga.

    Anyway, aside from that here’s wishing you, Sean and Charles a Happy Xmas and Merry New Year, from someone who was once a contributor to this blog (and maybe will again in 2019). And ditto to all readers of Progressive Pulse.

  4. Peter May -

    Thanks Ivan – hope you and yours had a happy Christmas and that you will be able to see your way to writing again in 2019! I fear there will be a lot to write about….

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