I’ve always found reading company results releases and their outlook statements far more useful than listening to the predictions of economists. This is due to the fact that companies operate in the real world and tend to have their fingers on the pulse of what is going on. Based on what I’ve read this week, it’s difficult to come away with any other view that life is very tough out there for businesses.
The easing of the lockdown in the UK is seeing the economy pick up, but it’s going to take a long time before things get back to where they were before coronavirus hit. The announcement of job losses from companies such as John Lewis and Boots along with Chancellor Rishi Sunak’s attempts to prop up the jobs market should leave no one in any doubt how fragile the UK economy is. I don’t mind admitting that I find the lack of well-paid jobs and productive capacity deeply worrying for our future prospects. We have relied too long on stoking the property market and credit-fuelled consumption to create an illusion of prosperity.
Mr Sunak this week was very open about the fact that the UK is a consumption economy. The trouble is that you can only consume what has been produced and the country does not produce enough valued-added stuff to create the necessary wealth to pay for the kind of society that people have become accustomed to.Download PDF