Comment: Ignore unreliable forecasts and enjoy Jubilee jamboree

Published on 27/05/2012 00:00

PREPARE for a week of pre-Jubilee celebrations. Unless, of course, you happen to be one of those likely to be affected by the anticipated slump in output. I say “likely”, because the official forecasts are about as reliable as a Greek tax return.

The Bank of England claims next weekend’s events will wipe 0.5 per cent from growth as factories and offices shut and employees take advantage of the extended bank holiday.

Past experience, not least the 2002 Golden Jubilee, support the case for a fall in output. But constant revisions to “official” figures are reason enough to be sceptical about forecasts from the Bank of England, the Treasury and other sources.

A report compiled by the Westminster government’s Department for Culture, Media and Sport (DCMS) reckons output could fall by about £1.2 billion, but it notes the difficulty in assessing the impact of events such as Royal celebrations. The language is laced with uncertainties.

On the prospect of businesses shutting down, the DCMS states: “In the absence of detailed evidence, one approach to estimating the potential impact of the bank holiday on output would be to make various assumptions on a sector-by-sector basis to provide illustrative estimates.”

It goes on, with little confidence, that the extra bank holiday is “deemed to have a potential impact on small businesses”. Deemed? Potential? How many civil servants are employed to calculate such things? Have they been more focused on ordering the bunting than crunching the numbers?

The document admits that “no consultation around the impact on small businesses was carried out”.

It adds: “The government has not received any responses or correspondence about the potential adverse effect of the bank holiday for small businesses.” So, the estimates appear to be a mix of crude assumptions based on past experience, rule of thumb and guesswork.

Leisure and tourism are expected to be among the winners, as will the struggling retail sector. Despite the alleged fall in overall output from last year’s royal wedding, UK retail is said to have benefited by between £515 million and £620m.

The Scottish Retail Consortium says shoppers spend an extra 80 per cent on a bank holiday Monday. So the added Tuesday holiday should see a bumper weekend for Scottish stores.

But there’s something else we need to factor in: the weather. The wet April was bad news for the high street and tourism. To that extent stores and leisure outlets should enjoy the sunshine while it lasts. Forecasters at the Met reckon the Jubilee weekend is set for rain, an outcome that the DCMS report seems to overlook.

New name nothing to Yell about

THE latest company name change has prompted head-scratching and howls of derision. Yellow Pages publisher Yell (a seemingly logical name) will become Hibu (pronounced high-bo), a name that even its chief executive Mike Pocock admits means nothing, but has cost thousands of pounds.

It’s supposed to appeal to the young, though why is lost on many of us.

Pocock clearly sees Hibu taking its place among other meaningless company names such as Apple and Google (originally Backrub) which have been able to build a reputation beyond the name.

But a name change is not guaranteed to change a company’s fortunes and the process has a chequered history: Consignia (Royal Mail) and Monday (PwC’s demerged consulting arm), were among those that were quickly abandoned.