It’s been said that one of Gordon Brown’s favourite jokes goes like this: What’s the difference between a good chancellor and a bad chancellor? Answer, it’s down to when they resign!
Okay, we grant you not the best joke ever told, but telling nevertheless. It’s been a golden run for the UK, and under Gordon has experienced its longest run of growth ever. And in fairness, no on is yet saying this run is over. Thereâ€™s no talk of recession. Even so the two latest reports into UK plc make grim reading.
First, the quite bad news. According to the latest figures revealed by the Office of National Statistics yesterday, the UK grew by just 1.5% in the 12 months to the end of the second quarter. That’s the worst performance for 12 years. In the last quarter, the economy expanded by just 0.5%.
The Treasury protested loudly. A spokesman said: “We are facing the highest sustained oil price for a quarter of a century, growth in our main export market – the eurozone – has slowed and house prices have slowed to a more sustainable level . In previous years, any one of these shocks would have tipped the UK into recession. Instead employment is at a record high and the economy continues to grow every quarter – delivering a record 52 quarters of uninterrupted growth.”
But, the point is, many forecasters have been predicting such a fall for some time, and Gordon has been insisting they were wrong. And as we have said here before, there’s a feeling out there that oil is a scapegoat.
But then that brings us onto the really bad news. According to the CBI, which published its distributive trades survey yesterday, conditions on the High street are the worst for 22 years. Of the retailers questioned in its survey, 26% said sales were up, but 50% said they were down.
John Longworth, Executive Director of Asda and Chairman of the CBI’s DTS Panel, said: “There was no let up for retailers during September. Despite extended Summer sales, this is the fourth month in a row when volumes have fallen well short of last year’s levels. Margins are being squeezed further as prices are cut and fuel prices rise.
“The reluctance of consumers to spend money is probably due to a variety of factors including higher fuel bills, a reluctance to incur debt and the slowdown in the housing market. With only three months to go until Christmas retailers will be pulling out all the stops to get shoppers back into the High street and spending money.”
© Investment & Business News 2013