THERE’S no doubt about it, things are looking up.
The Office for National Statistics revealed this week that inflation has fallen to 1.8 per cent, its lowest in more than two years.
With wages growing at 3.3 per cent, it means real wages — adjusted for inflation — are growing at 1.5 per cent. So British workers, who earn an average of £27,000 a year, are each getting richer by £8 a week, every week.
Not that you may have heard the good news on inflation and real wages.
As ever, it was drowned out by the relentless drone of bad news stories, all trying to convince us that Britain is in an economic crash, caused by Brexit.
In this fictional version of Britain’s economic health we are all getting poorer. Factories are closing like never before and jobs are drifting away to the rest of the EU.
Carney stunned many with a speech saying Brexit could usher in a golden era of ‘international co-operation and crossborder commerce’[/caption]
Yesterday, for example, the Guardian gave prominence to a claim by a member of the Bank of England’s Monetary Policy Committee, Gertjan Vlieghe, that Brexit is already costing us £800million a week.
It was fantasy, based on Mr Vlieghe’s guess that the economy would have been two per cent larger had we not voted to leave the EU.
Why should anyone believe him when the Bank of England’s economic forecasters have such a terrible record?
We might not be booming, in other words, but we have gone a remarkably long period without a bust
A month before the 2016 referendum, the bank’s governor, Mark Carney, predicted Britain could fall into a “technical recession” if we voted to leave.
It didn’t happen — or even come close to happening.
Then on Wednesday, Carney stunned many with a speech saying Brexit could usher in a golden era of “international co-operation and crossborder commerce” and even that it could be a springboard to a “new global order” of free trade.
It is true that economic growth in Britain is sluggish by historical standards, but then it has been ever since the economic crash of 2008/09.
Last week, we never heard the end of it when Nissan announced that it would not, after all, build its new X-Trail model in Sunderland[/caption]
But at 0.2 per cent growth in the past three months, it is outpacing Germany, where the economy was static over the same period. Italy is in recession.
It is more than six years since Britain saw the economy shrink over the course of three months, and more than nine years since the economy shrank by more than two quarters in a row — the official definition of a recession.
We might not be booming, in other words, but we have gone a remarkably long period without a bust.
As for jobs, the unemployment rate has fallen to four per cent — the lowest since the first three months of 1975.
Employment, however, is far higher than it was then.
We are in the middle of a jobs miracle, yet you would never guess this from listening to many news bulletins.
Economists were right to predict the Pound would fall against the euro – but if you work for a company which exports goods or services, it is a pretty good thing[/caption]
Last week, we never heard the end of it when Nissan announced that it would not, after all, be building its new X-Trail model in Sunderland. You had to read a little more deeply to realise that not a single job is being lost at Britain’s Nissan plants and that the X-Trail is only being dropped because European consumers have turned against diesel.
In France, by the way, the unemployment rate is 8.8 per cent and in Italy it is 10.3 per cent. So much for the notion that the Eurozone economy is powering ahead while Brexit Britain lags behind.
Ever since the referendum, the economy has defied the doom-mongers. The past month has been no exception.
The High Street was predicted to be a bloodbath. Yet several large chains, including Next, Dunelm and Pets At Home, reported strongly rising sales in the weeks up to Christmas.
We have continued shopping after Christmas, too. Consumer spending in January was 2.9 per cent higher than a year earlier, according to Barclaycard.
House prices, according to the Government’s index, are up 2.5 per cent over the past 12 months – no rampant boom, but certainly nowhere near a crash[/caption]
The stock market and housing market have both failed to crash, as many predicted they would. In fact, the FTSE 100 is up seven per cent this year.
House prices, according to the Government’s index, are up 2.5 per cent over the past 12 months. That’s no rampant boom, but it is certainly nowhere near a crash.
The one thing on which economists were right was that the Pound would fall after a Brexit vote.
It is 20 per cent lower than in early 2016.
That is bad news if you are going on a foreign holiday. But if you have a job in a company which exports goods or services, it is a pretty good thing.
By increasing exports and decreasing imports, the lower Pound is helping to reduce Britain’s trade deficit.
In 2015 we imported £93billion more in goods and services than we exported. In 2016 the deficit grew to £103billion. But by 2017, once the lower Pound had taken effect, it was £68billion. However former Brexit Secretary David Davis was wrong when he pinned hopes this week of a sizeable, long-term export boost on a devaluation of the Pound.
If we’d listened to what the Eeyores were trying to tell us about economic collapse and stopped spending, recession would have become a self-fulfilling prophecy[/caption]
MOST READ IN COMMENT
Brexit success depends on cutting taxes, trade barriers and regulatory burdens, just as Singapore has done.
No matter how positive the economic data, however, there are many Remainers who simply will not accept that the economy is not crashing.
They want that to happen because they want to be proved right. It is surprising the relentless tales of doom have not caused a recession by destroying consumers’ confidence.
If we had taken notice of what the Eeyores were trying to tell us about economic collapse and stopped spending, recession would have become a self-fulfilling prophecy.
Evidently, British consumers have the good sense to see the forecasts of doom as the anti-Brexit propaganda that they are.
The economy is not roaring ahead, but strip away the gloomy headlines and there is more good news than bad.