Cost of living

The movement of thousands of fast food workers in a series of strikes, spanning 150 cities across the US, has captured the eye of the international media. It’s easy to see why. The movement symbolises something incredible — non-unionised workers, those on the lowest pay, many of them black, many of them parents living in poverty, who work in the most difficult conditions with no job security — have now lost their fear.

The strikes raise questions about the power of the working class today and the challenges facing the trade union movement.

Conflicting figures and competing forecasts for Britain make confusing reading for anyone trying to make sense of what is going on in the economy.

In early autumn 2013 chancellor George Osborne was trumpeting economic recovery, but between October and November 2013 there was a sudden slump of output in construction, and manufacturing flatlined.

By January the International Monetary Fund (IMF) was making optimistic predictions about the British economy, and the coalition is crowing over the rise in employment.

The end of November saw the release of the government's statistics on winter deaths. Cold weather is a killer in the UK. An estimated 31,100 "excess winter" deaths occurred over the winter of 2012-13, up from 24,000 the previous winter.

Most of these deaths occurred among those aged 75 or older. Excess winter deaths are strongly correlated with the coldest weather months; and the coldest winters have the highest number of winter deaths.

Something surprising happened in September. Ed Miliband managed to dominate the party conference season and even make mainstream politics spark to life for once.

Miliband's decision to respond to the Tories' boast the economic "recovery" vindicates their austerity measures by focusing on what he rightly called the "cost of living crisis" gave some expression to the mood among millions of workers across Britain.

The official classification of fuel poverty is a household that has to spend at least 10 percent of its income on energy bills. Over 5.5 million households are already in fuel poverty, over half of them either having to make special provisions for winter quarter bill payments or living in fear of disconnection.

Yet in May, when the current Energy Bill was launched, the government cynically calculated that the effect of its new legislation would immediately push a further 400,000 households into fuel poverty through its effect on fuel prices.

The government has entered a new and much nastier phase. Two events stand out. Firstly, George Osborne's autumn statement to parliament on 29 November promising further austerity - the day before the mass public sector strike - and 9 December, when David Cameron wielded the British veto to block proposals at a European Union summit for a new EU-wide treaty, much to the delight of his Eurosceptic backbenchers.

For the first time in over 30 years the real disposable income of British households is falling, and the degree to which this is happening is increasing as inflation continues to climb. The Office for National Statistics reports that real incomes fell by 0.8 percent in 2010, which is the highest fall in real disposable incomes since 1977. In the first quarter of 2011 it reports incomes fell by 2.7 percent, over three times this amount, confirming that money pressures are growing.

But that's precisely what Mervyn King did in a speech to business leaders in Newcastle on 25 January. The Dodd quote (about happiness, predictably enough) was rather less important, though, than the rest of what he had to say, which was centred on an examination of why the cost of living has risen and how this has affected people's incomes.

Biofuels crop

Prices now surpass the levels seen at the height of the 2007-8 food crisis. Back then it led to over 30 countries being hit by unrest linked to the soaring cost of food, from Haiti to Bangladesh.

Sugar and meat prices are at record levels, while cereal prices are back at the levels of 2008. Last year saw European wheat prices double, US corn prices increase by more than 50 percent and US soybean prices rise by over 30 percent.

Rising energy bills, higher rail fares, increases in rents (if many councils get their way) and the hike in VAT to 20 percent this month are all likely to combine and force the various measures of inflation upwards this year.