There’s an excellent column by Neil O’Brien of the Policy Exchange in today’s Daily Telegraph. His main point is that the next few years will be ones of paying more for everything – producing what he dubs ‘the politics of bills’.

He outlines three/four obvious reasons why we will all wind up paying for the mess being created mainly by others. The first is simple inflation caused by QE:

‘Inflation is up again. The measure the Bank of England is supposed to target (called CPI inflation) is over 3 percent.But a different measure of inflation (called RPIX) shows inflation running at over 5%…’

The second is the rising interest rates The Slog has argued must come sooner or later:

‘The average outstanding mortgage in the UK is about £110,000. The average rate on outstanding loans was 3.67% in March 2010. Assuming the average period left on a mortgage is 12 years, a 1% rise in interest rates will cost £57 per month, or £684 per year. A 2% rise in mortgage rates would be £116 per month, or £1,392 per year.’

Third and fourth, he talks of the need to repair infrastructure and cut the UK’s deficit:

‘The fiscal crisis means that central funding from the government will have to be replaced by rising payments from service users. That means paying more for everything: from a university education to a train ticket.The second problem is the need for huge investment in our infrastructure. At Policy Exchange we recently totted up how much we need to spend, based on essential repairs and politicians promises.It comes to a shocking £500 billion over the next decade…’

He’s right of course – but I’d add four things:

1. As I’ve said for months now, the property correction is going to be beyond our imagining – in almost all sectors.
2. The level of investment held by large UK institutions in commercial property is frightening.
3. The costs of EU membership must spiral in the light of bailouts to come.
4. How on earth can an economic recovery occur when nobody has any money to spend?

We need to brace ourselves for two certainties: a medium-term pauperisation of large parts of the UK population; and the most almighty ding-dong with the EU.

Until we do so, we’ve no chance.