Despite reasons to be cheerful about the economy, the nation remains mired in gloom, writes Bill Jamieson.
Of all the images to conjure up about the state we’re in, “menopausal moment” was not the best choice. But that was how the Deputy Governor of the Bank of England this week decided to describe the present condition of the UK economy.
We have, he opined, entered a “menopausal” phase after passing peak productivity, similar (apparently) to a lull at the end of the 19th century when the height of the Steam Age was over but the age of electricity was yet to begin.
Menopausal? Really? Ben Broadbent was forced to apologise after women took to Twitter to protest, some pointing out that menopausal women have not lost their potency, but are, in fact, just reaching it.
As for the end of the 19th century, this, he explained, was when British productivity “slowed pretty much to a halt” as it entered what he labelled a “climacteric period ... you’ve passed your productive peak ... it applies to both genders”.
Any the wiser? Thought not. It seldom is when economists wander into disputatious areas of biology. But it reflects a truth of sorts: there is widespread dispute as to the accuracy of recent measurements of productivity with numbers on Gross Domestic Product being questioned.
But we are also at a collision point of opposing currents. Take the news flow of recent days. We have learnt that unemployment in Scotland is down 6,000 to 118,000, and that the numbers in work here have risen again, to 64.7 per cent.
Scotland’s private sector has also recorded its strongest rate of expansion since last October. The latest IHS Markit Scotland PMI, which measures monthly changes in manufacturing and services output, reports that April’s improvement was supported by a “solid inflow” of new business and stronger employment gains.
READ MORE: Unemployment down by 6,000 in Scotland
Across the UK, household incomes are now rising in real terms. Wages are up 2.9 per cent, outpacing inflation. UK numbers in work are now at 75.6 per cent with a rise of 197,000 in the first three months of the year, when the economy, measured by GDP, was said to have slowed to a miserable rate of just 0.1 per cent. Unemployment is now at its lowest since 1975.
In any other period of the past 30 years, such news would have been greeted with unalloyed cheer. But today little of this is impacting on the national mood.
A sour mood of pessimism abounds over our prospects. The good news is good only up to a point. While the return to pay growth is welcome, it remains anaemic and wages are still over £700 a year lower than they were a decade ago.
Forecasters predict little by way of improvement over the rest of the year. The government, far from riding high on a tide of support, is gridlocked. Brexit politics has degenerated into a nightmare Somme of trench warfare, mud and misery, with the Cabinet in constant war over membership of the customs union or variants thereof. Holyrood is now at constitutional loggerheads with Westminster with accusations of a “power grab”, while on the business pages, Commons reports lambast the directors of collapsed infrastructure giant Carillion for a culture of corporate greed while the government is accused of inaction.
On the nightly news there is a constant parade of Home Office and healthcare failings. It seems that, far from enjoying a “feel-good factor”, we are trapped in a snaking queue of grievance to report complaints, ill-treatment and neglect.
Seldom has the country seemed more miserable and disaffected. When the news is little more than a continuous, unrelieved moan, and we reach to switch channels to escape, what grounds are there for hope, let alone optimism?
It is not hard to see how Jeremy Corbyn’s fuming millennials have a point: when they are told that they can never expect to own their own home or enjoy the same level of affluence as their parents, why retain loyalty to a politics so uninspiring and that has clearly failed them?
Now much of this can be blamed on a failure of leadership. It is evident in the business sector where the behaviour of many corporate leaders has failed to rise beyond venality and greed. The rhetoric of ‘business speak’ – with cliched talk of “maximising bottom-line returns”, “value-added earnings per share”, grandiose mission statements and protestations of enterprise “passion” – has long failed to engage, let alone impress.
Capitalism has seldom been more of a dirty word. And for that the way in which the business community talks to the outside world, as much as its frequent performance failings, has much to answer for.
But it is political leadership, or the lack of it, that is the cause of greatest disappointment. Seldom has a Prime Minister seemed so faltering and uncertain as to what they think or even believe. The turned-down mouth, the faltering speech, the robotic repetition of slogans and marking-time clichés – a fearful apprehension typifies her mood. Little wonder this long period of dithering, going-nowhere behaviour over Brexit has left much of the country with no reason to “feel good” at all.
Where are we heading? The state of the country now resembles that ghostly galleon in the film Pirates of the Caribbean – the aimless drift, the abandoned deck, the rotting boards, the screeching albatross that is Anna Soubry, the spectral rigging and the sails torn to pathetic shreds. There is no evident sign of life – but below decks is a feuding crew of mutinous, barely living grotesques. Only the skeletons look reassuring.
When this is where miserable leadership has taken us, little wonder the better news on the economy passes by as little more than driftwood in a boiling sea. Yes, the economy is improving, and yes, living standards are starting to improve. But this paradox deserves a better explanation than “menopausal phase”. In this night and fog of a government, who is able to hope? Who can even discern it? Worse still, who dares to hope?