A CRISIS of confidence has emerged over whether or not the UK is likely to go into recession.
The British Chamber of Commerce, having surveyed around 5,000 members, say it is.
The UK Prime Minister, Gordon Brown, says the UK economy is ‘in good shape’. The business group is talking nonsense, say his cohorts. There’s nothing to worry about. There’s plenty of money and full employment.
The BCC back their remarks with evidence of negative growth in the manufacturing and service sectors in the last three months. The service sector has been hit hardest, they say.
David Kern, the BCC’s economic adviser, is talking about ‘a menacing deterioration’ in UK prospects. He says the outlook is ‘grim’ and that the correction period is ‘likely to be longer and nastier than anticipated’.
Attempts by businesses to raise prices will fail, he says, because demand has fallen and consumers’ disposable incomes will be squeezed.
At the same time, he advises, the Monetary Policy Committee must resist calls to raise interest rates and even consider rate cuts.
The politicians will never agree totally, at least in public. Their job is to boost confidence in the economy, even when times are at rock bottom. We’ve seen it here, in Jersey, in the early 2000s and no doubt we’ll be seeing it again, quite soon.
The truth probably lies somewhere in between the two. Yes, these are the days of tightening of belts and cost cutting. But at some point, however far down the road, things will start looking up again and those investors who have bought cheap will start to make a little money.
In the meantime, as one investment specialist told me last week, the markets are ‘not a pretty sight’.
WHO can you really trust these days? The question arose again last week when the Securities and Exchange Commission in the United States concluded that three major credit rating agencies – Standard & Poor’s, Moody’s and Fitch Ratings – had ‘conflicts of interest’ when they rated sub-prime related investments in a positive light. The people who suffer most, inevitably, are those who have put their faith in over-optimistic advice.
The failure of the credit rating agencies was referred to by the former Lord Mayor of the City of London, Sir Michael Oliver, when he spoke to the Institute of Directors in Jersey earlier this month. However, Sir Michael’s view was that the failure lay with the regulators, who had fallen short of reigning in the rating agencies before it all got out of hand.
Coincidentally, not a million miles away from these offices, a number of investors are said to have suffered losses from a sub-prime-type episode of their own. It seems that Jersey firms providing investment advice of one kind or another are not immune from the failures currently emerging in the wider market place. The details are as yet unclear but rumours are rife.
What is almost certain is that this is not a good time for the Jersey Financial Services Commission to be in the public spotlight, given that the International Monetary Fund will shortly be arriving for its long-anticipated inspection. The recent flurry of changes to Jersey’s financial services legislation is more than ample evidence that this visit is not simply a courtesy call.
Add in last week’s visit by the UK Treasury Select Committee, on the theme of financial transparency, and it becomes difficult to escape the impression that the restraints around the offshore world are about to be tightened.
In the meantime, it will be a long while before triple A ratings are regarded with any degree of seriousness. Trust is not easily won and very quickly lost.
I HAD to giggle just a smidgeon when I read last week’s Sunday Mirror ‘exclusive’ on David Cameron’s alleged sleaze dilemma.
Mr Cameron’s Shadow Chancellor, George Osborne, who so graciously entertained us at the Institute of Director’s annual dinner last November, has got into a bit of a pickle about the £10,000 he was apparently paid by the Jersey branch.
His excuse is that he was not ‘speaking’, exactly, because he was part of a double act, with veteran editor and broadcaster Andrew Neil asking the questions.
It makes you wonder how much Mr Neil was paid.
Anyhow, it seems that under Conservative Party rules Tory MPs are not supposed to take money for speaking ‘on matters directly related’ to their departments.
As it happens I was fortunate enough to have at least ten minutes with Mr Osborne – or was it 15 minutes? – prior to his performance at the November dinner.
Apart from the fact that the poor chap seemed incredibly hungry – he could hardly articulate, given the quantity of nibbles he was trying to consume at the same time – he did tell me that the fundamental reason he had accepted the invite was because it was ‘an opportunity to listen to not just the politicians of Jersey, but also the school children, and to pick up thoughts and ideas and views that I can use if I’m lucky enough to be the next Chancellor’.
And he added: ‘So although I’m going to be speaking it’s also a learning opportunity.’
I do believe I still have the interview as a digital recording.
In recent years the IoD in Jersey has invited several other notable Tories to speak at their dinner, including Michael Portillo (when he was still the MP for Chelsea and Kensington) and William Hague. I wonder whether they were in breach of Party rules?
Recession? Depends on whom you talk to
A CRISIS of confidence has emerged over whether or not the UK is likely to go into recession.
The British Chamber of Commerce, having surveyed around 5,000 members, say it is.
The UK Prime Minister, Gordon Brown, says the UK economy is ‘in good shape’. The business group is talking nonsense, say his cohorts. There’s nothing to worry about. There’s plenty of money and full employment.
The BCC back their remarks with evidence of negative growth in the manufacturing and service sectors in the last three months. The service sector has been hit hardest, they say.
David Kern, the BCC’s economic adviser, is talking about ‘a menacing deterioration’ in UK prospects. He says the outlook is ‘grim’ and that the correction period is ‘likely to be longer and nastier than anticipated’.
Attempts by businesses to raise prices will fail, he says, because demand has fallen and consumers’ disposable incomes will be squeezed.
At the same time, he advises, the Monetary Policy Committee must resist calls to raise interest rates and even consider rate cuts.
The politicians will never agree totally, at least in public. Their job is to boost confidence in the economy, even when times are at rock bottom. We’ve seen it here, in Jersey, in the early 2000s and no doubt we’ll be seeing it again, quite soon.
The truth probably lies somewhere in between the two. Yes, these are the days of tightening of belts and cost cutting. But at some point, however far down the road, things will start looking up again and those investors who have bought cheap will start to make a little money.
In the meantime, as one investment specialist told me last week, the markets are ‘not a pretty sight’.
WHO can you really trust these days? The question arose again last week when the Securities and Exchange Commission in the United States concluded that three major credit rating agencies – Standard & Poor’s, Moody’s and Fitch Ratings – had ‘conflicts of interest’ when they rated sub-prime related investments in a positive light. The people who suffer most, inevitably, are those who have put their faith in over-optimistic advice.
The failure of the credit rating agencies was referred to by the former Lord Mayor of the City of London, Sir Michael Oliver, when he spoke to the Institute of Directors in Jersey earlier this month. However, Sir Michael’s view was that the failure lay with the regulators, who had fallen short of reigning in the rating agencies before it all got out of hand.
Coincidentally, not a million miles away from these offices, a number of investors are said to have suffered losses from a sub-prime-type episode of their own. It seems that Jersey firms providing investment advice of one kind or another are not immune from the failures currently emerging in the wider market place. The details are as yet unclear but rumours are rife.
What is almost certain is that this is not a good time for the Jersey Financial Services Commission to be in the public spotlight, given that the International Monetary Fund will shortly be arriving for its long-anticipated inspection. The recent flurry of changes to Jersey’s financial services legislation is more than ample evidence that this visit is not simply a courtesy call.
Add in last week’s visit by the UK Treasury Select Committee, on the theme of financial transparency, and it becomes difficult to escape the impression that the restraints around the offshore world are about to be tightened.
In the meantime, it will be a long while before triple A ratings are regarded with any degree of seriousness. Trust is not easily won and very quickly lost.
I HAD to giggle just a smidgeon when I read last week’s Sunday Mirror ‘exclusive’ on David Cameron’s alleged sleaze dilemma.
Mr Cameron’s Shadow Chancellor, George Osborne, who so graciously entertained us at the Institute of Director’s annual dinner last November, has got into a bit of a pickle about the £10,000 he was apparently paid by the Jersey branch.
His excuse is that he was not ‘speaking’, exactly, because he was part of a double act, with veteran editor and broadcaster Andrew Neil asking the questions.
It makes you wonder how much Mr Neil was paid.
Anyhow, it seems that under Conservative Party rules Tory MPs are not supposed to take money for speaking ‘on matters directly related’ to their departments.
As it happens I was fortunate enough to have at least ten minutes with Mr Osborne – or was it 15 minutes? – prior to his performance at the November dinner.
Apart from the fact that the poor chap seemed incredibly hungry – he could hardly articulate, given the quantity of nibbles he was trying to consume at the same time – he did tell me that the fundamental reason he had accepted the invite was because it was ‘an opportunity to listen to not just the politicians of Jersey, but also the school children, and to pick up thoughts and ideas and views that I can use if I’m lucky enough to be the next Chancellor’.
And he added: ‘So although I’m going to be speaking it’s also a learning opportunity.’
I do believe I still have the interview as a digital recording.
In recent years the IoD in Jersey has invited several other notable Tories to speak at their dinner, including Michael Portillo (when he was still the MP for Chelsea and Kensington) and William Hague. I wonder whether they were in breach of Party rules?
Article posted on 15th July, 2008 - 2.00pm