Boris bounce must be given the right boost
The weather may be turning for the worse, but it appears that the economy has some sunlit uplands in its sights.
Day after day seems to bring a new survey which suggests that business leaders, households and analysts are feeling a little chirpier about 2020.
Today the CBI and Atheneum join a growing chorus of voices predicting a welcome uptick in confidence.
Unsurprisingly, Tory strategists would be extremely pleased if this was known as the “Boris bounce,” with a sudden burst of certainty kicking the economy into gear after a period of paralysis thanks to the House of Commons’ prevarication on the method of our departure from the European Union.
There is certainly something to that argument, though it is not the only factor; the resilience of the Labour market, signs of a thawing global trade war and a host of other elements are in the mix, too.
But, as Blackrock man Rupert Harrison says, the government must “nurture” this potential bounce-back — not take it for granted.
He should know, having been at the right hand of the chancellor during the stuttering recovery and then burst of growth between 2010 and 2015.
And there are plenty of clouds that remain on the horizon. For one thing, even before we get into trade negotiations, the various regulatory bodies in the UK will need to take on significant additional responsibilities — and they can’t mess it up, as the catchily named International Regulatory Strategy Group makes clear today for financial services.
Those efforts will be technical, detail-driven and it’s highly likely that the successes will be rarely feted and any failures much-discussed. But though it will not win any great plaudits, the government must give the regulatory bodies what they need to keep capital moving.
And as for human capital, another challenge presents itself. Despite welcome noises around ditching the £30,000 salary cap it remains entirely possible that either a deliberate decision to reduce inflows or a poorly implemented system could leave businesses looking to grow without the people they need to do so.
There are signs that the government is listening to business, and the conversation is certainly more constructive than it was under Theresa May, but there is still a distinct lack of clarity.
Boris’ government remains very much in the honeymoon period and businesses are clearly enjoying a nice drink at the bar after a fraught few years.
But honeymoons are only the start. The hard work may be yet to come.
Main image: Getty