Ok, we are coming out of a precedented global recession, however, this week there have been signs that things are starting to improve. However, in a desperate way to help the economy to continue to recover, The Independent run with a headline that suggests that there is a ‘new recession’, just because their poll shows how we have seen business leaders support for the idea of ‘Green Shoots’ drop from 37% to 33%.
A little exaggerated if I do say so myself…
Ok, I am not an expert on the economy, there may well be a ‘W’ shaped recession instead of the government’s predicted ‘V’ shape, but to say that there is a ‘new recession’ mainly on the basis of this poll is evidence of the media exaggerations around the economy.
If we look at the evidence for the economy starting to show sings of recovery, we only need to look at the stories this week showing how retail sales have rose far beyond expert expectation, for example.
However, whilst at the time I did not agree with the VAT cut, the fact that Darling is going to go contrary to expert opinion and restore VAT to its normal price on the 1st of January, may actually ironically fund the talks around a ‘new recession’. It is possibly the worst day of the year to bring it back in, and only the Labour government would not continue with a scheme they introduced when people actually want them to. Whether we will see a u-turn in this area of governmental policy as cabinet divisions strengthen over it, remains to be seen.
I am not being naive and saying that there is no chance that we are not out of the worst of the recession, but to start headlines like ‘new recession’ in leading newspapers will prove unhelpful for confidence in the economy. We will have to watch the developments of the economy, however, unfortunately whilst I do not agree with leading headlines such as ‘new recession’, there could well be a ‘W’ shaped recovery, if Darling cannot secure better loans to small businesses today, if the VAT cut is reversed on the 1st of January, for example. But we need to focus more on the positive signs that are occurring and work from there.
