Credit crunch, surging food prices, rising unemployment, house prices tumbling, maybe even a recession …. isn’t it all enough to make you feel miserable? And I’m not even mentioning the dismal British summer weather.

And all that desolation can be measured - the Misery Index is a financial pain barometer measured by adding the rate of inflation to the unemployment level.

Financial Web site Money Morning points out in a note that it now stands at a 12-year-high of 9.8 percent in Britain (consumer price inflation of 4.4 percent plus unemployment rate of 5.4 percent).

Not the most scientific approach but the index’s founder, American economist Arthur Okun, based it on the assumption that a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. Some analysts also argue that the rate of crime and the misery index correlate strongly.

During the Presidential campaign of 1976, Democratic candidate Jimmy Carter made frequent references to the Misery Index, which by the summer of 1976 was at 13.57 percent. Carter stated that no man responsible for giving a country a misery index that high, had a right to even ask to be President. The remark may have haunted him somewhat as four years later it had soared to 22 percent and Ronald Reagan won the election.

While 22 percent sounds high, spare a thought for the British consumer. Money Morning points out that in the summer of 1974, the UK Misery Index climbed well into the 30s, as annual inflation topped 26 percent and the country was hit by the three-day week. Then after a hitting a low of 13 percent by mid-1978, the index took off again after the “Winter of Discontent”, reaching 26 in the early months of Margaret Thatcher’s reign as Prime Minister.

More gloom and doom to come - is it all getting too much? You could try and listen to Baltimore-based death metal band “Misery Index” with its anti-consumerist lyrics or buy one of their T-shirts stating that “Ignorance is Bliss”.

When the government established the British Airports Authority in 1965, its aim was to make airports more flexible and profitable. Profitable they may have been but flexibility is not something that Britain’s larger airports are renowned for.

The list of complaints about BAA is a long one, both from airlines and passengers. Airlines says the charges levied are excessive. Travellers say airport terminals are overcrowded, delays are all too frequent and increased bureaucracy has prevailed since the tightening of baggage restrictions in August 2006.

Some commentators say competition will do wonders for airports which might get run for the benefit of airlines and passengers rather than the operating company, which sometimes has been criticised as being more interested in making money from its airport shops than in giving travellers a speedy journey through its terminals.

“BAA is one of Britain’s most arrogant, complacent and customer-unfriendly businesses. It’s a showcase for the disbenefits of immunity from competition,” Jeff Randall writes in the Daily Telegraph. “BAA handles more than 90 percent of all airport traffic in the South East, yet treats those who pay its wages - airline passengers - as a nuisance. As long as it enjoys such monopoly power, we can look forward only to more of the same.”

But others argue that with BAA’s more than 40 years of experience and the company’s investment in the UK’s airports, a break-up could cause even more problems, and crucially, might not help sort out one of the key issues for transport policy - airport capacity. Heathrow, for example, is so close to bursting point that even small disruptions can lead to big delays.

Even British Airways, which has experienced its fair share of problems at BAA-owned airports, pointed out after the release of the Competition Comission’s report that the “ownership structure is secondary and that the focus should be on tougher regulation to help create more capacity.

Five years ago, the government published a 30-year air transport policy document. It was born following an exhaustive consultation process, which was open to every person in the country. An impressive 500,000 people from all over Britain participated, a reflection on what a crucial part airports play in people’s journeys.

The policy document recognised that new capacity remains the key issue facing Britain’s airports. It recommended that two new runways should be built in the south-east - one at Stansted and one at Heathrow, provided robust environmental conditions could be met.

Do you think the breakup of BAA’s airport empire will help improve things for passengers? Or is a complete rethink needed on how airports are run?

The resignation of another key aide to Mayor Boris Johnson has sparked renewed questions over the Mayor of London’s leadership, with opposition leaders at City Hall charging that the “wheels are coming off” his new administration.

Tim Parker , the First Deputy Mayor and Chairman of Transport for London (TfL), has stepped down from both jobs, saying it was inappropriate for him to hold them as an unelected official. His resignation is the third of a key aide in the four months of Johnson’s mayorship.

Despite having a rather big job to do already in running the capital, Johnson will now chair TfL himself. In his usual combative style he announced: “Over the last few weeks, it has become increasingly apparent to both of us that the nature of the decisions that need to be taken are highly political and there is no substitute for me, as the directly elected Mayor, being in charge.There are limits, therefore, to what can be delegated.”

It begs the question why Parker was installed in both roles in the first place - the running of London’s transport system has always been a politically charged issue.

More important for the future though is whether Johnson is biting off more than he can chew by chairing TfL. Even in times of crisis, delegation to top aides will be crucial for the mayor’s success. One of the key arguments against voting for Johnson as mayor was his perceived lack of managing a large organisation, and judging by the rate at which senior aides are disappearing, he looks set for a rough ride, not least as yet another strike is looming on the London Underground.

Sterling has extended its losses against the dollar to its lowest level in more than two years , trading just above $1.85. As recently as mid-July one pound would buy two dollars and there were plenty of tales of holidaymakers rushing to the United States to make the most of it.

It’s not hard to see why sterling is under pressure, even though inflation is currently well above target and the highest in years: rising unemployment, falling house prices, large trade and budget deficits, and slowing economic growth.

In a gloomy assessment of the economy this week Bank of England Governor Mervyn King said economic growth would be flat for the next year or so and that inflation would rise to 5 percent or above before falling. Economists had thought accelerating inflation would prevent the Bank from cutting rates, but its suggestion that inflation will begin to ease raised expectations of interest rate cuts. Lower interest rates mean investors get lower returns on sterling deposits, which makes the pound less attractive.

Meanwhile, the dollar has been strengthening amid evidence that the slowing economy is a global trend, rather than one limited to the U.S., meaning investors are bailing out of the pound and the euro. The dollar has also gained on the back of falling commodity prices and concern over the eurozone economy.

Just how far the pound will go is anyone’s guess. Citi’s Michael Saunders even predicts there could be a return to the $1.55 level that sterling averaged between 1993 and 2002. “It would not be a surprise to see a return to those levels in the next 12-18 months,” he says in a note to investors.

There are two sides to the falling sterling coin though.

The pound’s fall will hurt holidaymakers who have benefitted from a strong pound when traveling overseas- and make it more expensive for people to buy second homes abroad.

“The U.S. is still cheap, it’s still a good holiday, but it’s a lot more expensive,” says HSBC analyst David Bloom.

But it provides much needed relief for British businesses, including exporters and the tourism industry, whose products and services will become more affordable to customers around the world. With domestic demand weak, a revival of exports could help the economy and limit job losses.

How will a weaker pound affect you? Are you likely to holiday elsewhere now that sterling doesn’t buy as much as it used to in countries that use the dollar?

Exactly one year since the credit crunch started retail sales have shown their biggest fall on record in Britain, news that is likely to spur recession talk among consumers, who are already feeling the pinch from rising fuel and food costs.

For sure, the 3.9 percent drop in June was much worse than expected - economists had forecast a 2.5 percent decline - but shop prices are still higher than a year ago and the retail sales data series is notoriously volatile.

That might be enough to maintain interest rates on hold for now. The hawks among the Bank of England policymakers will find reason to remain cautious, no matter whether commentators are fretting that a combination of rising commodity prices, slowing house prices and falling consumer spending may push Britain into recession later this year or in 2009.

Recent minutes from the monthly meeting showed policymakers remain divided over the future path of interest rates as their opinions were split over whether the main threat to the economy comes from the slowdown in spending or from the spectre of rising inflation.

“Overall it underlines the picture of slowing growth and rising price pressures,” HBOS economist Mark Miller said. Vicky Redwood, from Capital Economics, predicted: “We think that spending growth will weaken considerably further, as house prices keep falling and inflation and unemployment rise further.”

More insight will be gleaned from Friday’s second-quarter estimate of economic growth, followed by the Bank of England’s survey of consumer credit and mortgage approvals for June on Tuesday.

Nine years after the near collapse of Equitable Life, pensioners and savers are still unsure if they see any compensation despite the long-awaited report by the parliamentary ombudsman, described by commentators as a “damning indictment of UK financial regulation.”

The victims may still be in for a long wait to get their estimated 4 billion pounds in compensation. Prime Minister Gordon Brown earlier this week indicated that he would not allow billions to be paid out automatically and maintained that Equitable Life’s “culpability” in the case had been proved.

Paul Braithwaite, general secretary of the Equitable Members Action Group , declared the publication of the report was “a red letter day for policyholders”.

But will the government cough up? Four billion pounds is a lot of money, which the government may be reluctant to spend when the slowdown in the economy is likely to hit tax revenues.

Equitable chairman Vanni Treves said: “I do not believe any argument that the Government has not got the money to do it. It is the job of the Government to fund it and pay out speedily.” He compared the situation to the government’s response to the crisis at Northern Rock: “It found 20 billion pounds for Northern Rock I think it should find a much smaller sum to compensate for its failings here,” he told Radio 4.

There are precedents for compensation payouts - in 1980 and 1990s, for example, over the Barlow Clowes and Maxwell scandals. More recently, when the ombudsman found maladministration in the regulation of the occupational pensions market, the Government paid out, albeit reluctantly and only after having been taken to court.

The Government keeps telling us that we should save more for retirement. But trust in the system is low and survey after survey finds that people do not save enough for their retirement.

Is the latest installment in the Equitable Life saga yet another nail in the coffin for retirement savings? Do you think regulation ensures that such failings won’t happen again in the future or does the regulator need to do more?

(updated with new photo)

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Hundreds of thousands of council workers are striking over pay in the biggest bout of industrial unrest in years.

Members of Unite and Unison are protesting over deals to increase their pay by 2.45 per cent, which is below the rate of inflation and which they say means an effective pay cut.

How are you affected by the strike? Is the council workers’ action justified?

(updated on July 15 with news that Gillespie won’t join as chairman)

Alliance & Leicester had increasingly been looking like a takeover target and Spain’s Santander has taken advantage of 75 percent collapse in the mortgage banks’ share price over the past year.

The Spanish bank had made little secret of its ambition to expand in the UK banking sector following its acquisition of Abbey in 2004, having already sniffed round A&L last year.

The move shows Santander’s faith in the UK banking sector, the Daily Telegraph says, and that prudently written mortgages are still valuable. “Halifax-owner HBOS will take some comfort from that. As will the Government and the Financial Services Authority, who are fed up with rescuing or orchestrating the rescue of Britain’s troubled banks,” the newspaper’s banking editor Philip Aldrick writes.

But what about the shareholders?

To those who stuck with A&L throughout its share price downturn the deal is worth 317p per share - they will be getting one Santander share for every three A&L share that they own, plus a cash dividend of 18p per share - still significantly lower than the 12-month high of 1,170p.

They might be well advised to hold on to their shares. According to thisismoney.com, one of Alliance & Leicester’s major shareholders, Standard Life, has given clear advice to shareholders big and small: Don’t sell yet. “Santander wants to buy this bank on giveaway terms,” Standard Life warns. It predicts a higher counter-offer soon.

Significantly, as part of its 1.3 billion pound takeover bid Santander says it’s willing to fund A&L’s 42 billion pounds of mortgage obligations. With economists predicting a fall of as much as 35 percent in house prices from peak to trough, A&L’s reliance on mortgage business was a key factor behind its share price dropping 75 percent last year as the credit crunch started to bite in Britain.

Simon Maughan, analyst at MF Global, has told Reuters that Santander could use the deal to drive through economies of scale to boost profitability at Abbey, which is low relative to its other operations.

The FT’s Alphaville blog points out that apart from obvious cost synergies, Santander’s Emilio Botin wants to accelerate expansion at Abbey. Adding A&L would increase Santander’s share of the UK mortgage market close to 13 percent.

Bank analysts at Lehman Brothers say that Santander is likely to have been attracted by A&L’s 31 billion pounds in deposits, plus the prospect of extracting close to 180 million in cost synergies, the Times said.

On the executive front, one factor that might “oil the wheels” is A&L’s recent appointment of Alan Gillespie, a well-respected industry veteran to succeed the late Sir Derek Higgs as chairman, Management Today points out. “The choice of Gillespie (who A&L pinched from Ulster Bank) was widely seen as an attempt to steady the ship ahead of further write-downs,” the magazine says on its Web site.

It was announced late on Monday that Alan Gillespie would not join it as chairman next month as previously announced.

For the first time since he became mayor of London on May 2, Boris Johnson has overtaken Conservative leader David Cameron in “favourability”, according to an opinion tracker published on www.politicshome.com.

Johnson scored a rating of 3, up from -7 at the end of April, while Cameron got rated 1, up from -5.

The PHI5000 tracker is based on replies from a politically balanced group of 5000 voters across the UK, who answer a survey every day for the site, which was launched in April and is powered by opinion pollsters YouGov.

The panel are asked daily questions on a rotation system, covering their attitudes to the whole political landscape. As part of this, politicshome tracks a wide range of political personalities, including Cameron’s and Johnson’s favourability ratings.

Because of the consistency of the sample and questionnaire of the tracker, the site is able to track subtle changes in public opinion, it says.

The ever increasing tax burden and Gordon Brown’s woes dominate the front pages today.

The Daily Telegraph reports research has shown that the average motorist is paying more than £600 a year extra in tax under Labour. Story here

The tax burden also makes front page news in the Daily Express which says Prime Minister Gordon Brown has been warned that he must stop tax rises or face defeat in the next election. Story here

The Daily Mail says price rises mean families have less to spend than for 17 years. Story here

Brown’s style of leadership and signs that support for him in his own party is waning also feature heavily on the front pages. The Times says more than half of Labour supporters believe that Brown should stand down to make way for a more electable politician. Story here

Brown also faces new threats to his authority over Scottish independence, 42-days detention and the 10p tax climbdown, The Guardian says. Story here

The Independent leads with the cyclone in Myanmar, saying the country’s military government is obstructing global aid efforts. Story here

The Sun also focuses on the Myanmar cyclone, the “Tide of Death” as it says. Story here