WITH a brazenness that would make even John Terry blush, George Osborne last week sought to claim the credit for the FTSE hitting a record high.
There’s a good reason for Osborne doing this – and it doesn’t reflect well on his stewardship of the economy.
The UK’s flagship index reached 6,949.63 on Tuesday, surpassing the previous high of 6,930.20 on 30 December 1999.
The Chancellor tweeted that this was “good for pensions and savers” and came on top of “record low inflation”, all being part of the government’s mythical “long-term economic plan”.
Terry, the Chelsea captain who donned his full kit to celebrate a Champions League final win he didn’t even take part in, has nothing on the Chancellor when it comes to sheer audacity.
The record low inflation was caused primarily by falling oil prices. If Osborne really wants to claim the credit for that I’d like him to do so publicly, preferably in Aberdeen.
The FTSE’s new high similarly says very little about Osborne’s record as Chancellor. It does owe much to quantitative easing, however, which has been an unmitigated disaster for the savers Osborne referred to.
The performance of the index theoretically reflects confidence (or otherwise) in the domestic economy. However, the FTSE 100 is these days weighted heavily towards overseas stocks, while the surge last week was driven by a modest uptick in oil prices and a breakthrough in talks over Greek debt arrangements. The relevance to ordinary investors and pension savers is minimal. What the FTSE does in a certain day, week, month or even year is immaterial if you’re saving for retirement or other long-term objectives.
There will be people who reason that now is the time to pile in and make a quick buck. Wrong. They’re too late, because they’ve missed most or all of the rise.
The same dismissive attitude should be taken to the so-called long-term economic plan heralded by Osborne and the recovery we keep hearing about.
Osborne has presided over the longest downturn on record, failed to meet his deficit targets, the national debt has rocketed and real pay has continued to fall.
The National Institute of Economic and Social Research recently accused Osborne of taking a “large risk with the economy” with ideological spending cuts that may have cost up to 5 per cent of GDP (£1,500 for every man, woman and child in the UK). Yet 60 per cent of planned spending cuts are yet to come, the Institute for Fiscal Studies has warned.
Last week figures from the House of Commons library showed that more than eight in ten jobs created in Scotland since 2010 are low paid, with zero hours contracts accounting for almost 30 per cent of new jobs north of the Border over that period.
Like John Terry, Osborne is desperate to claim credit where he can because he certainly hasn’t earned it.
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