Economic indicators changed sharply for the worse during September, and business Britain must now batten down the hatches Good morning, Austerity Britain. Suddenly all those newspaper articles about household economies, making the most of root vegetables and trading down to a Lidl lifestyle no longer look whimsical. A bleak grimness is setting in. Business Britain is battening down. Just a few weeks ago there was still some cheerfulness in the ‘real’ economy, a spirited hope that the worst would not befall; that recession, if not avoidable, would be light and selective in its touch. Bad, but not calamitous: that was the mood. Not any more. Beyond the Britain of Canary Wharf and the City, out in that wider economy where Bank of England governor Mervyn King would often point for signs of greater confidence and resilience, a numbed shock has set in. Truly we have moved from an old world to a new one – or back to an older world for those who can remember the grim, grey parsimony of the late Forties. Where the mood in heartland business is not one of fretfulness it has given way to fear. ‘I dread what’s going to happen,’ said the head of a prominent UK hi-fi manufacturer who rang me at the weekend, after news of the US government plan to buy in hundreds of billions of dollars worth of toxic paper. ‘It was quiet before. But I can’t imagine now there will be many orders worth bothering about. The two big questions facing our business now are: Which bank should we be with? And which currency?’ There is barely a business or household that is not factoring in a sharp reduction at best in credit availability and all that this implies for business investment plans, working capital and staffing levels. Companies that have held on to a full workforce count for months have little option but to begin the process of reining in and reducing headcount to survive. Whatever assurances traumatised banks can give about ‘maintaining customer relationships’, money is tighter than it has been for years. And confidence has suffered a huge blow.A Grim New World
Tuesday, 14 October 2008
THURSDAY, 2ND OCTOBER 2008
Posted by Britannia Radio at 12:58