Recession Update - It's Our Fault Now.

23 December 2009

Never one to pass up the opportunity to spread a bit of festive cheer, I thought we could raise a glass of hot wine to our economy, as we are finally standing out from the rest of the civilised world in these difficult times.

At the end of the year in which our prime minister led from the front in his most honourable purpose to save the world, it looks like the rest of the world is now clawing away from the precipice. In fact, this magical act of philanthropy on the part of our leader has ensured that only one G20 country remains in recession. Us.

Even the Irish have shown us a snowy pair of heals. Twelve months after we all raced to Ladbrokes to plant the remainder of our savings on the embattled Irish economy following the fate of Iceland, the likeable vagabonds grew their output by 0.3 per cent in the third quarter of 2009. Meanwhile, ours shrank by 0.2 per cent.

And economists have recently hit on the problem. We’re not spending enough. People are repaying debts, instead of spending in the shops and amassing more debts. That doesn’t sound too stupid when you think about what might happen next year. VAT is going up, after the election other taxes will follow, energy bills are unlikely to fall and public spending is seizing up.

So, as anyone with the merest hint of fiscal nous would do, families are being more frugal. Last year we all tucked into our partridge inside a duck inside a chicken inside a goose inside an ostrich. In some ways, it’s quite nice to get back to the Turkey and stuffing this year.

At the end of 2008, UK households owed more than 180 per cent of total net disposable income, according to the Organisation for Economic Co-operation and Development. German households owed 98 per cent, French consumers owed 100 per cent and only our special partners across the pond could get anywhere near us.
Anyhow, the share of income saved in banks is at its highest level in more than a decade, despite the rewards being at their lowest, and our unwillingness to spend will almost certainly prolong the City’s gloom.

But surely prudence is the right plan. Let’s find our feet again and not be too downhearted about trailing the Irish. After all they’re better than us at Gaelic Football, Eurovision and Hoolying (whatever that is). Let’s spend, but spend well on quality products. Let’s support each other and buy from each other within the business sector. I’ll stop short of suggesting we consider an alternative to supermarket shopping for fear I may disappear.

And whatever anyone tells you – it isn’t actually your fault.

So have a wonderful Christmas. Try not to swear when you trip over the Go Go Hamster as you stagger towards the settee clutching a glass of port. And remember, no matter how bad things appear, there is a God. And let’s take a moment now to thank him now for Rage Against The Machine.

Stuart Wilkin writes for Insider

Posted  23 December 2009


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