Reasons to be cheerful on the UK economy? They’re there, if you’re looking for them
Nobody likes to be negative, so perhaps that explains the surprising survey results on our front page today. Perhaps confidence in the economy is coming not from sensible forecasting but from unguarded new year’s optimism. Or, to borrow a line from Blackadder’s General Melchett, “that’s the spirit: if nothing else works, then a total pig-headed unwillingness to look facts in the face will see us through.”
Well, maybe. But there is also the case for more cheer than has been the case for a while. One of the pleasures of working in journalism is the gentle aside from an interviewee, usually a CEO. Over the past twelve months, it’s been some version of “it’s not easy at the minute.” But in the past fortnight, that’s been slightly amended: as one City chief put it this week, “it’s tough, but we’re doing pretty well.” It’s a sentiment that is shared by more than you might think – for there are, as we put it, reasons to be cheerful.
For one, we are past the peak of inflation. Energy prices, at least heading into the summer, are heading down, and one is inclined to trust that with a year’s warning Europe’s governments can get themselves in shape for next winter without a dramatic further spike. In the UK at least, the unwritten wages contract between under-pressure employers and their employees last seen in the financial crisis appears to be holding: don’t let us go, and we won’t ask for a pay rise.
In the City at least, there is a degree of hope that on financial services the government may finally be getting to grips with the details – both positive and negative – of our departure from the European Union.
Rishi Sunak can build on this. The next election is far from a foregone conclusion. Publish a decent roadmap towards lower taxes and higher growth, and who knows where the polls might be in six months or so.