Flat GDP and Falling Unemployment

I have put together a précis below of the unemployment figures for Worcestershire for December 2012 from the monthly County Economic Summary.  This also contains helpful graphs and tables to illustrate the text.  As well as the national unemployment figures showing a continuing fall, which were also published last week, we had the GDP figures on Friday.

Flat GDP and Falling Unemployment

There have been a number of explanations of the disparity between flat GDP and falling unemployment.  A more interesting one can be found here, which suggests that whilst in manufacturing and particularly mining and quarrying, which are important to the UK economic output, production has fallen steeply, the numbers they employ are relatively low.  This is in contrast to the services sector, which has been holding up fairly well and creating jobs, though the trends in retail don’t look promising.  This site is linked to the TUC, so is critical of government policy even if it got this idea from the non-left-wing Economist.  Similarly, another TUC sponsored site shows that since the start of the recession the number of self-employed workers has increased by 333,000, the number of employees has fallen by 201,000.   It may also be the case that many of the self-employed roles may not be full-time even if they are counted as such in the figures.

Debt Still the Problem

Whatever the ups and downs of the GDP figures, we seem to be bumping along the bottom.  Some seem to think that 2013 will begin to see some improvement – certainly the stockmarkets seem to be acting as if they believe it and some in Davos also were talking up the outlook.  On the other hand, a deep analysis of the financial crash and its continuing consequences is provided by Robert Peston in his ‘How Do We Fix This Mess?  The Economic Price of Having It All and theRoute to Lasting Prosperity’.  It’s not a book for the faint-hearted.  If you think too much about what he says about the risks that were run by our bankers and the extent to which much remains to be fixed you won’t sleep well at night.

But his essential thesis is that we have run up huge amounts of debt in an enormous bubble that has yet to be deflated and until they are paid down the economy is going nowhere.  This isn’t just public-sector debt, indeed it is more about personal and private-sector debt.  Our banks have had to rebuild their capital ratios, which means they can lend much less and have become risk averse.  Individuals are paying down debt and borrowing less, so spending less.  But most of all the debt burden is still huge because ironically in our desire to reduce hardship many banks are exercising ‘forbearance’ on individuals with mortgages and loans they can’t repay and on much commercial property and other debt where crystallising losses would be very painful.  We have ‘zombie companies’ and ‘zombie banks’, many of which are kept alive by government and Bank of England support of the financial system.  By contrast in the US where you can walk away from an un-repayable mortgage  or go bankrupt and start again more easily, the economy is already back to pre-crash levels of GDP (we are still 4% below 2008 output in a recession longer than the 1930s) and will see higher growth this year.  We could argue about the pros and cons of Obama’s deficit budgets too but perhaps something of Schumpeter’s ‘creative destruction’ is necessary?

Peston's prescription is that we need to reduce our debt (in all sectors), and live within our means, which before the crash we patently were not doing - as individuals, corporately and as a nation, including our balance of payments, which has been out of kilter for decades.  We need to reduce the size of the City, which is too big for the overall size of our economy and diverts too much money into unproductive rent-seeking (i.e making money from money for its own sake) and instead using banks for what they are supposed to be for, which is to invest in productive industries that produce real goods and services that people need.  This would also have the effect of moving talented people into more useful jobs at more sensible salaries, also for the benefit of the wider economy and might contribute to reducing the growing north-south divide.  However, this may require us to be prepared to take some pretty strong medicine, given that the declared policy of most of our political parties, including those in government, is to rebalance the economy and pay down (at least some parts of) the debt, and there has been precious little progress so far.

It seems to me that this is a profoundly moral issue, but how does one say it without sounding moralising?  If I can take that risk and be slightly 'theological', as that is what this blog is supposed to be impicitly or sometimes explicitly, those of us who have been reading Amos and Hosea at morning prayer over these past couple of weeks can hardly fail to have noticed the similarities between what the prophets were/are saying to Israel and Judah and the state of our nation after the almighty bender of the pre-crash years that some still refuse to believe or act as if it is over for them.

And now to the reality of all this.        

Unemployment

The claimant count in Worcestershire in December 2012 decreased by 260 to 9,854, and was 875 lower than December 2011.  This is 2.8% of the 16-64 population, which remains below the regional and national levels.  The number of claimants is now at its lowest level since December 2008; however this number is expected to rise slightly next month when the January figures are released due to the decrease in seasonal work.  The greatest decrease in absolute terms (between December 2011 and December 2012) took place in Redditch and Worcester with a fall of 257 and 295 claimants respectively.

The district with the highest proportion of claimants aged 16-64 was Wyre Forest (3.6%).  The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.2% and the lowest is Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.2%, which is 0.4% higher than the county as a whole.

Long Term Unemployment

The proportion of claimants who have been in receipt of JSA benefit between 6 and 12 months has
decreased by 6.0 % to 15.1% since December 2011 whilst those claiming for more than 12 months have increased by 6.9 percentage points over the same period to 22.4% of all claimants. The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

Unemployment by Gender

During the recession the male claimant count rate increased at a faster pace than the female rate.  Post-recession the male rate began to fall again, although not back to pre-recession levels, whilst the female rate has remained at the higher level.

Unemployment by Occupation

The claimant count is not broken down by industry, but using data by occupation does give us an
indirect indication of the industries involved.  In terms of overall numbers the greatest decrease in claimants compared to December 2011 has been in Elementary occupations (180) and Administrative and Secretarial Occupations (175).  In percentage terms, the largest decrease was in Professional occupations (28.4%).

Claimants Leaving the Unemployment Count

2,605 people left the claimant count in December 2012, of those people 49.1% have found employment and a further 38.4% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In December 2012 the number of claimants aged 18-24 was 2,690 which is a decrease of 185 compared to November 2012 and 555 fewer claimants compared to December 2011. The proportion of claimants aged 18-24 is 6.5%, 0.1% lower than the England average.  The district with the highest proportion of claimants aged 18-24 was Wyre Forest (8.1%) and the greatest decrease in absolute terms (between December 2011 and December 2012) took place in Redditch with a fall of 185 claimants.

After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009.  It has since fallen with some seasonal effects related to Christmas and summer employment; however

it is yet to reach pre-recession levels.   It is important to reduce the number of 18-24 year olds in unemployment, as it affects people at the very start of their working lives. A period of unemployment at this stage increases the likelihood of an individual becoming disengaged from the labour market and impacting their lifetime earnings potential.

Worcestershire Unemployment, and Earnings, November 2012

The figures and analysis about Worcestershire below are taken from the County Council’s December 2012 County Economic Summary.  This has been revised in format and to some extent content and I have taken what I think are the salient points, having in some places précised them slightly.

Headline Figures

The claimant count in Worcestershire in November 2012 decreased by 203 to 10,114, 552 lower than the number of claimants in November 2011.  This is 2.9% of the 16-64 population, which remains below the regional and national levels. The greatest decrease in absolute terms (between November 2011 and November 2012) took place in Redditch and Worcester with a fall of 205 and 206 claimants respectively.

The urban centre with the highest proportion of claimants aged 16-64 is Kidderminster with 4.2% and the lowest proportion is in Wythall at 1.6%. In Worcestershire's urban areas the proportion of claimants aged 16-64 is 3.3%, which is 0.4% higher than the county as a whole.

After a significant rise (from around 1.5%), the Worcestershire claimant rate reached a peak in April 2009. Since the middle of 2010 the proportion of claimants has stabilised around 3.1%, with some seasonal effects related to Christmas and summer employment.

Long Term Unemployment

The proportion of claimants who have been receiving of Job Seekers Allowance between 6 and 12 months has decreased by 7.7 percentage points to 14.7% since November 2011. It is now the lowest that it has been since December 2010 but the proportion receiving JSA for more than 12 months has increased by 7.9 percentage points over the same period to 22.3% of all claimants.  The number of people claiming for 6-12 months has declined due to them either finding employment or falling into the category of claiming for more than 12 months.

If a person is unemployed for an extended period of time there is an increasing likelihood of them becoming disengaged from the labour market.

Claimants Leaving the Unemployment Count

2,435 people left the claimant count in November 2012, of those people 46.2% have found employment and a further 40.9% are either 'not known' or have 'failed to sign'; it is possible that some of these people have also found employment.

Youth Unemployment – Claimants Aged 18-24

In October 2012 the number of claimants aged 18-24 was 2,875 which is a decrease of 135 compared to October 2012 and 340 fewer compared to November 2011. The proportion of claimants aged 18-24 is 6.9%, the same as the England average but below the West Midlands average (8.7).

The districts with the highest proportion of claimants aged 18-24 were Redditch (7.9%) and Wyre Forest (8.5%), the greatest decrease in absolute terms (between November 2011 and November 2012) took place in Redditch with a fall of 160 claimants.  The figures for individual wards are no longer so easily available but I am happy to find them should anyone want them.

After a significant rise, the Worcestershire 18-24 claimant rate reached a peak in August 2009 though it has since fallen with some seasonal effects related to Christmas and summer employment; however it is yet to reach pre-recession levels.  It is important to reduce the number of 18-24 year olds in unemployment, as it affects people at the very start of their working lives. A period of unemployment at this stage increases the likelihood of an individual becoming disengaged from the labour market and impacting their lifetime earnings potential.

National Picture

For information about the national picture see the BBCreport here.  This shows that Worcestershire broadly follows the national picture, though we are generally in a better position. However, one should never overlook those places that are more significantly impacted and the effect on individuals wherever they are.

The BBC’s Economics Editor, Stephanie Flanders, has an interesting analysis of the national figures here.  One would hope that there has been some pre-Christmas hiring (which may well be temporary) and this may be contributing to improved figures and sentiment.  On the other hand, as Flanders points out, comparing the July to September quarterly unemployment figures with the June to August figures rather than the April to June figures shows the fall in unemployment is much lower and may be reflected in the claimant count figures which tend to be more sensitive.  Not wishing to throw too much cold water on the headline good news, one also notes that the OBR are predicting unemployment to rise to 8.2% before falling at some point in the cycle (as compared with 7.8% now) so a reverse of the trend is on the cards at some point.

Earnings

Flanders also makes the point about lower real earnings and I saw elsewhere attention drawn to a speech on 12 December given by Spencer Dale, Chief Economist at the Bank of England, who notes the “extraordinary flexibility” shown in the labour market. Real wages, measured in terms of consumer prices, have fallen by over 15% compared with the pre-crisis trend. So “no wonder that people are finding life tough”.  Many of us have had below inflation pay-rises, but for those who are underemployed in the current terminology (i.e. are working less or in poorer paid jobs than they would like) are the ones most affected by this trend.  Declining productivity in the economy (i.e. taking more people to produce goods that used to be the case) may be a worry for economists and perhaps for the economy of the country in the long-term if the trend is not reversed, but it has a very direct impact on the individuals affected in the present.  Dale also says:  “The harsh but inescapable reality of these developments – and the real adjustments they necessitate – is that households and families in our economy are worse off. Much worse off.” “The less we produce” and the less “we can purchase using the proceeds from our domestically produced output”, “the less we can ultimately consume”.  It is a matter of judgement whether the trade-off of some or maybe many people taking a cut in earnings is better than the higher unemployment that has been seen in previous recessions.  And the longer the debts, both private and public takes to unwind so that the longer the recession lasts the harder these effects become for the people affected.

Unemployment and the Economic Outlook for Worcestershire for October 2012

The Local Position

Unemployment in Worcestershire dropped slightly last month on the claimant count – by 121 to 10,317.  This was not sufficient to change the percentage unemployed since last month, which still stands at 3.0% on the ONS method of calculation, though it is a 0.2% fall on 12 months ago.  Most of the detail figures are similar to previous months so I don’t propose to repeat them, except to say that, in line with recent national trends, youth unemployment has been falling for a few months and now stands at 14% in the worst affected wards compared with approaching 20% some time back.  This is also having the effect of bringing some areas not previously in the top ten list into the picture.   For more detail on this (see p.22) and other figures go to the County Economic Summary.

Long-term unemployment last month decreased by 1.2 % to 37.6% for those claiming benefits for more than six months and by 0.3% to 22.5% for those claiming over 12 months.  This is against a national trend where the headline rates in this area have increased.  More detail on the national figures can be found here.

National Picture

What I felt to be a helpful analysis of the current national position was offered by Gerwyn Davies, the Chartered Institute of Personnel and Development labour market adviser, who said:

“Employers have continued to focus on keeping labour costs down and a combination of pay restraint and a higher proportion of part-time and temporary work has enabled them to take on more staff.

“Of particular note this month is the disproportionately large increase in part-time employment. Almost half of the employment increase is due to part-time employment, and almost all of this increase is accounted for by women.

“Despite the positive headline figures, the high proportions of part-time and temporary work suggest that many employers remain cautious about adding to their long-term cost base. Business confidence has improved in recent months but is still fragile.

"So while we may see further short-term increases in employment - as indicated in CIPD’s Labour Market Outlook – it may be some time before this translates into the permanent positions that most job-seekers prefer.”

Economic Outlook

I want to use the rest of this piece to focus on the economic outlook.  Mervyn King’s widely reported views about the long and winding road with regard to the national outlook can be found here.  However, I now receive the Hereford and Worcester Chamber of Commerce quarterly economic briefing and so I will try to summarise what that says about business prospects more locally.  You can read the full document here.

Whilst the National trend shows that the economy is 'stagnant' and growth is 'weak', the third quarter of 2012 results locally show 'stability' and more positive results for the manufacturing sector.

Nationally, orders fell but locally there has been a small increase in orders, especially in manufacturing, though service sector orders decreased.  The local domestic sales 'balance' (i.e. those firms reporting an increase in sales compared with those reporting a decrease) is the same as the last quarter, although the increase in domestic sales is slightly lower than last quarter and both manufacturing and service sectors show a drop in sales.

Whilst exports have weakened nationally, the figures are more promising locally, with an increase in export sales for manufacturing although a decrease within the service sector. The overall local ‘balance’ for exports has increased.

Nationally firms are less confident in taking on staff but locally there has been more confidence. There has been an increase in workforce and attempts to recruit with an increase in full-time and permanent positions which is encouraging.

Investment in plant and machinery remains very low in both the service and manufacturing sectors with investment remaining unchanged, however, investment in training has increased, which is encouraging.

Business confidence continues to show 'uncertainty' and is lower than the last quarter with both turnover and profitability lower.  However, there is a slight improvement in businesses operating at full capacity but there is uncertainty within manufacturing with a high percentage operating below full capacity.

Pressure to raise prices has dropped with both manufacturing and service sectors expecting prices to remain unchanged.  Businesses locally are concerned about competition, inflation and corporation tax. Nationally, inflation remains a concern for businesses in both sectors.

Conclusion

Whilst this is very much a summary of what are quite complex figures (essentially firms are asked about a range of figures and their views and expectations and whether they are more confident less confident or feel the same) it would appear that locally across Hereford and Worcestershire that the picture is slightly more encouraging than the national situation.  This would correlate with our better than both national and regional figures for unemployment.  It would also be consistent with our having less ‘old’ manufacturing than other parts of the West Midlands, which is suffering more both long-term and in this recession.  However, whilst Worcestershire is holding its own on figures such as Gross Value Added with Herefordshire and Staffordshire, it is some way behind other shire neighbours such as Gloucestershire and Warwickshire and there are concerns about our ability to keep up.

I have been doing some supporting work for a project called ‘Next Generation Worcestershire’, which raises some serious questions about the need for continuing to increase prosperity and for what purpose.  It will hopefully be published shortly for debate amongst ‘leaders’ in the County.  If it is possible, it would be important for church people/’leaders’ to be able to respond to the questions it raises.

Unemployment in September 2012

Overall Picture

Unemployment fell slightly in Worcestershire last month from 10,637 to 10,468, a drop of 169 claimants, though the change is small enough for the percentage to remain unchanged on the ONS system of calculation at 3.0%.  (On the County Council’s basis, which I have previously used in these briefings the rate has fallen from 3.8 to 3.7%).  Using the ONS figure should hopefully aid more accurate comparison with regional and national figures with the health warning that the more widely quoted regional and national figures are the people available for work, not the claimant count which is used here.

Regional and National Position

This small decrease is consistent with a further modest fall nationally, though according to news broadcasts, the West Midlands region again showed a slight increase in the headline figure but a very small fall in the claimant count (down 1,274 to 163,392 and 6.6%).  There is more information about the national picture here and a further discussion of why unemployment appears to be fallingand the total number of people employed is rising even though we have been in a double dip recession.  It seems to revolve around a number of people working part-time who would rather work full-time, some who are self-employed or contractors who may be classed as full-time but are not actually working that many hours, though the notion of labour-hoarding by employers is now dismissed as they couldn’t afford to keep this up for so long.  Stephanie Flanders, the BBC’s economics editor, also writes about why unemployment hasn’t been ashigh in this recession as in previous ones – because many of us have taken wage cuts and the afore-mentioned reduced hours so the pain has been spread more widely rather than on a smaller number who have lost their jobs.

Local Figures

The total number claiming Job Seeker’s Allowance has fallen by 792 since the same month last year with the largest falls in Redditch (274), Worcester (184) and Malvern Hills (118).  As with last month, the district with the highest claimant count Worcester at 3.7% on the ONS basis and the lowest is Malvern Hills at 2.2%.  As far as urban centres are concerned the highest is again Kidderminster at 5.2% on the County’s slightly different basis that seems to be about 25% higher than the ONS figures, and the lowest is still Wythall at 1.8%.

Young People

The number of young people aged 18-24 claiming JSA fell to 3,090 from 3,130 in August and 3,465 in September last year.  Of the 3,090, 2,640 have been claiming up to one year, which means that 450 (14.7% of the total) have been claiming for more than a year.  Whilst it remains that the ten wards in the County that have the highest 18-24 unemployment are fairly predictably those which appear high up the various deprivation indices it is also the case that some others have recently appeared.  This may be because the level of youth unemployment has been slowly falling so that some of these other places are starting to have percentages similar to those that appear regularly.  It is also true that we are dealing with quite small numbers so any variation can have more marked effect than if the numbers were bigger.  Further information can be found on page 21 of the September County Economic Summary.

Long-term Unemployment

The male rate of unemployment increased rapidly at the beginning of the recession (from just over 2% in 2008 to 5.5% in 2010).  It has since dropped to 4%.  However, the female rate increased more slowly from around 1% in 2008 to 2% in 2010 but has remained more or less constant since then, and is currently just above 2%.  Long-term (overall) unemployment has fallen for those claiming benefit for more than six months by 2% to 38.8% but the figure for those claiming for more than 12 months has increased by 0.2% to 22.8%.

Vacancies

The number of vacancies in the County has gone up to 6,459 in September   from 5,143 in August and 3,737 in the same month last year.  Whether this is yet a trend may be a little early to say, but it may reflect the more positive picture nationally of increasing employment.

This Blog

It is some time since I posted anything on this blog and I’ve written a separate piece to explain why and to invite comments about its usefulness.  I’d be interested to know what you think.

This Blog

I haven’t posted anything on this blog for a while, partly because I have recently taken up a course of further study and that has been taking my energy in getting to grips with what it involves, but largely because after a year of writing and some questioning with colleagues about how best to communicate through social media, etc. I feel it is time for some re-evaluation.

There is the question of whether a blog is the best way to communicate or if some other social media would be better.  I have been encouraged, more than I might have expected from some quarters, that this is worth-while; but whilst some posts get a lot of hits – some predictably because they mention something/somebody well known, some for reasons I can’t quite fathom – others get no more than a handful.  The latter, I think, say something worthwhile, otherwise I wouldn’t bother writing them but it does make one question the use of the time needed.

So, is a blog the best way to communicate?  If it is, there is the question of style and content.  If it continues, I will do my best to make the style more accessible.  One or two people have said they find it difficult to understand.  If that isn’t just about style then what about the content?  I have tried to pitch it as a thoughtful and sometimes challenging comment on current economic and related subjects from a Christian perspective.  It doesn’t aim to be academic because that’s not where I’m coming from and not where I think the audience is but maybe it still assumes a level of understanding of economics or other subjects that not everyone is comfortable with.

I’d be interested in comments, both constructive criticism and well as any encouragement.  The aim is to inform and stimulate thought and perhaps debate across the area of a Christian approach to economic matters, which is what I’m most interested in, but also the wider issues connected with my work with Faith at Work in Worcestershire and now the Committee for Agriculture and Rural Life.  I look forward with interest to any feedback, either through the comment button on the blog site or by email, etc.

UK and Worcestershire Unemployment in August 2012

Unemployment fell in the UK last month on both the broader headline figure and the claimant count.  The West Midlands region bucked the national trend with an increase in unemployment and so did Worcestershire.  The increases are not large but they point to the suspicion in the articles above that some of the national increase is attributable to London and the South East and to an Olympic Games effect.  It remains to be seen what will happen in coming months and how much temporary employment there is in the run-up to Christmas.

There still seems to be a discrepancy between recessionary GDP figures (even if slightly better in the recent revision to - 0.5% instead of - 0.7%) and employment growth.  The numbers of people in employment do seem to include quite high numbers of people working in temporary positions, part-time when they would rather work full-time and people who are self employed but who may not be getting a lot of work.  Nationally, there has been a slight increase in the number of women employed compared with a slight drop for men, but in Worcestershire there has been a slight increase in women’s unemployment (by 0.1%), though there is not enough detail in the figures to be able to say more.

Nationally, there has been an increase in the numbers employed in the private sector and a drop in the public sector, though this is masked to some extent by a recent change of classification of those working in FE from public to private and the speed of drop in numbers in the public sector has been slowing.  However, talking to those working in the public sector, the future depends very much on what the spending settlement for 2013 onwards looks like.

From Worcestershire County Council’s County EconomicSummary, the unadjusted Job Seeker’s Allowance unemployment total for Worcestershire was 10,607 in August 2012, an increase of 62 claimants from the previous month but down 680 (Redditch down 223, Worcester down 202) compared with a year ago. The county rate of 3.8% is unchanged from last month and compares with the West Midlands region (6.6%) and England and Wales (5.4%).  Across the county, the district with the highest unemployment rate is Worcester (4.8%) and the lowest is Malvern Hills, (2.9%).  In terms of urban centres, Kidderminster had the highest unemployment rate at 5.3% and the lowest was in Wythall (1.8%).

The male unemployment rate in Worcestershire is 4.6% (unchanged from last month), compared to the female rate of 2.9% (up by 0.1%).  There has been a small fall in the proportion of claimants claiming benefit for more than six months – 0.1% to 40.8% but those claiming over 12 months have increased by 0.6% to 22.6% between July 2012 and August 2012.  Last month 3,130 people aged 18-24 were claiming JSA benefit compared to 3,085 in July and 3,450 in August last year.  Of the August number 2,685 that had been claiming for up to one year. This is 6.5% of the 18-24 population, and is still higher than the England average.  There is considerable variation across the county, though the ten wards with the highest rates shown in the Economic Summary tend to be in the list most if not every month, but none the less, there does seem to have been a drop in numbers just recently.  Whether this will continue into the new academic year remains to be seen.

The number of notified vacancies in Worcestershire was 5,143 in July 2012. This is 28.4% higher than in July 2012.  This is significantly greater than the change month on month last year, but the figures do change quite significantly month on month so it is difficult to be sure of trends.

Some Thoughts About Harvest

I have just written this (below) that should appear shortly as the 'Thought for the Week' on the Diocese of Worcester website:

We’ve all complained about the weather this summer.  Days out spoilt by rain, holidays perhaps not what we’d hoped, the garden – well!  It’s usually been mow the grass on the one bright day between the rain.

All this has an effect on our farmers too.  In modern farming most crops are normally safely gathered in by now (traditional harvest festivals in October are rather late in the year).  But much of the harvest is about a fortnight late this year because of the wet weather and the lack of warmth and sun.  The weather is still more important than just the effect it has on our holidays.

Hay has grown well where it’s been dry enough to cut (important for animal feed in the winter) but many cereals (wheat, barley, maize) and other crops are badly affected not just by the difficulty of harvesting.  If they are wet they will add to the cost of production by having to be dried and in many cases the quality is not as good as hoped.  Either the grain has not grown as well because of the wet and cooler weather or it may be diseased because of the damp.

This matters to the farmer, because even if the price goes up because of shortage (also affected by the droughts in the US and elsewhere) he may get less for his overall crop if less is harvested and if the quality is poorer he may not be able to sell it at a prime price.  All this means that not just bread, but many other food-stuffs, will be more expensive in the shops.  Whilst this may be an extra expense for us it will be more serious for many poorer people here in the UK but especially around the world.  Higher food prices may mean some people will not have enough to eat and even famine.

These higher prices also affect the cost of animal feed that is necessary to supplement the grass in the fields.  Higher ‘input prices’ might mean farmers costs go up and margins go down.  We have all become aware of this with the direct action taken by farmers over milk prices.  The processors and supermarkets wanted to cut prices they pay for milk from the farmer but at the same time the farmer’s costs (feed, fertiliser, diesel, fuel, etc.) have been going up.  Livestock (and therefore meat) prices have generally risen because as more people in places like China become better off they want to eat meat , raising demand and prices (much New Zealand lamb now goes to China and not the UK), so livestock farmers have been doing better after many difficult years.  However, as costs rise there is less profit and in markets like milk where prices are poor farmers face going out of business or selling herds and scrapping expensive dairy equipment to grow a different crop or animal.

Many of us take the food in the supermarket or on our plate for granted.  The size of supermarkets and the long ‘distance’ between farm and shopping trolley makes the issues to do with food remote.  We are also extremely fortunate because for the most part our harvests and the production of other food are sufficiently reliable for us to barely notice changes from year to year.  Our harvest festivals have become a regular celebration of a bounty that is taken for granted, enabling us to be concerned for the poor and starving in remote places.  Of course, we should remain concerned for the hungry of the world, not least because poor harvest will affect them more than us, but our concern needs to be nearer at home too.  We are all inter-connected with each other, and however urban we may be, with the natural world.  It seems likely that at least some of the weather this year that has affected harvests is due to climate change so all of us who cause greenhouse gasses have a responsibility.

We reflect on our responsibility to care for the creation entrusted to us by God, on issues of justice and of economic power, care for our neighbour and the poor, and our inter-connectedness one with each other and with the creation.

Phillip Jones, Mission Development Officer - Economy