Official figures show that the UK economy has contracted for the first time in over six years - a harbinger of the oncoming crisis. Already, British industry is being decimated. It is time for the labour movement to go on the offensive.

Official figures show that the UK economy has contracted for the first time in over six years - a harbinger of the oncoming crisis. Already, British industry is being decimated. It is time for the labour movement to go on the offensive.

According to top bankers and economists, the outlook for the British economy is bleak. Their so-called ‘recovery’ is nearing its end.

But for millions of workers, the recovery never even began. Average real wages are still below pre-crisis levels; there has been an explosion of insecure, low paid jobs. And these are meant to be the good times.

Alarm bells

All the signs are pointing to a slump in the coming period. Official growth figures show that the UK economy contracted by 0.2% between April and June - the first fall in GDP since 2012. The Bank of England is predicting a one-in-three chance of recession by the end of the year.

Already, this July was the worst month for car sales for seven years, and the worst for British retailers since records began in 1995.

London’s property bubble has begun to burst, with house prices dropping for the eighth quarter in a row. At the same time, British household unsecured debt has reached a new peak, far surpassing the pre-crash levels from 2008. As a result, individual insolvencies are at their highest level since 2010. No wonder economists are sounding the alarm.

Brexit

Stock market collapseThe uncertainty over Brexit is certainly a factor adding to big business’ economic woes. Manufacturing output saw its sharpest drop in April for 17 years, as carmakers implemented shutdowns to coincide with the original Brexit deadline in March. Investment has all but dried up, given the fears of a chaotic no-deal departure from the EU.

But Brexit is by no means the only drag on the economy. Capitalism operates as a world system. The world market is saturated by a global crisis of overproduction, and the effects are being felt everywhere.

The developing trade war between the US and China is just the largest of many threats to the global economy. Global stock exchanges are seeing their biggest daily decline for a year and a half. This follows the breakdown of trade talks between Beijing and Washington, prompting Trump to announce a further $300bn of tariffs on Chinese goods.

As a result, yields on US Treasury bonds – considered the surest predictor of a recession – are at their most alarming since just before the 2008 crisis broke out.

Slump

Steel nationalisationOf course it will be the working class which will be made to pay for the next crisis, with job losses, pay cuts, and ever-worsening conditions. Already the effects are being felt.

Tesco recently announced it is to cut a further 4,500 jobs, on top of the 9,000 it said are at risk at the start of the year. This will add to the 72,000 jobs already lost in the retail sector over the last year, as part of the ongoing high street crisis.

Manufacturing jobs are being shed by the thousands, with Honda, Ford, British Steel, and now Harland and Wolff all closing sites, plants, and factories. All the while, the rich get richer and richer.

It’s time we said enough is enough! The capitalists and bankers can only offer unemployment and misery. It is time we took power out of their hands once and for all.

Only a socialist planned economy - where production is for need and not profit - can avert the crisis facing billions of workers worldwide.