00:00Chancellor Wooden looking for some better news this morning, but didn't quite come.
00:04And certainly, in terms of grocery prices, people are really, really feeling it.
00:09Yeah, I mean, it's getting really bad.
00:10And in fact, those figures are a little bit worse than you presented,
00:13because what has just happened is the figure for April has been revised down to 3.4%.
00:19So it's stayed at the same level. It hasn't come off a little bit.
00:22It's staying at the same level for April, May, as it were.
00:27But yes, it's increasing costs for people up and down the country.
00:31And it's all down to this government.
00:32They put taxes up, the national insurance costs up.
00:35Some of that got passed on by way of higher prices,
00:38because that's what employers typically do in that situation.
00:40And they've taxed and borrowed and spent a huge amount of money that has also increased inflation.
00:47And that's made higher interest rates for longer as well, hitting people with their mortgages too.
00:52The concern is, well, there's no wiggle room left.
00:54There's not that fiscal headroom left.
00:56We currently have the sound, potentially, of war bells across the Middle East with Iran.
01:02And if it were to be impacted by another crisis of that nature,
01:06it could be grim news for British consumers,
01:08because the government hasn't got the money left to absorb any kind of shock.
01:12That's absolutely right.
01:13So this idea of fiscal headroom, as economists call it,
01:16is basically the buffer that you deal with for if things get worse than you expected.
01:20That buffer that she had from the budget back in the autumn of last year,
01:24she blew entirely and more.
01:26She rebuilt it in the spring.
01:28But most economists are expecting that to have evaporated come the budget in the autumn.
01:33So what we're probably looking at in the autumn, I'm afraid, is tax rises,
01:36which gets you into this kind of doom loop.
01:38You know, as taxes are going up, the economy is slowing.
01:40Your headroom is disappearing.
01:43You go for more taxes, it slows the economy even more.
01:45And that's the vicious cycle.
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