Economy Doing Well

Am I too cynical or would it be correct to say that Darling and Co are trying to "bottom out" the economy early by keeping interest rates high and talking prospects down so that by October and the conference season or more likely next spring we can start to talk about a recovery more quickly than may otherwise be apparent (the slide having at least been arrested).

By escalating the slide now they think that improvements can be brought forward and the corner turned more quickly. This does however mean that the slide may be deeper than is actually necessary and those being sacrificed to unemployment early for the sake of political savings in the spring time may not be grateful to the Government or the Bank of England for adopting this most savage and callous approach to economic management.

The negative approach of the Chancellor (following the example of the press) in exaggerating the down turn flies in the face of my own property companies experience of modest growth in profits and those of many other business operators I meet. A more measured response by Government reflecting what is actually happening rather than what is reported to be happening in the Evening Standard would be a more moderate approach.

Poor Darling's statement seems to suggest that he is resigned to presiding over the deepest post war recession and may be an indication of panic. Browns reassurance that they are the right people to weather this particular storm would be laughable if it were not so hollow. They claim to be implementing a planned strategy and a package of measures to ride out the recession but none of their ideas has been published, discussed or documented and it appears to be only rhetoric designed to camouflage their lurching from one fiscal disaster to the next.

Ed Balls thinks (quite rightly as it happens) that it may be better to stay in the Education Department rather than take over at the treasury. However he has failed to realise that his own political capital has already been spent in the exams and SATs debacle. Even Brown would resist the temptation to promote him to the treasury on the basis of such a poor performance.

I am resigned to this fiasco continuing for another few months yet as no one within the Labour Party has the balls (come on Milliband pull your finger out) to set the compass and choose a policy direction. The continuation of the current drift will take our economy to the brink but I trust the business leaders rather than the politicians will keep us from going over the edge until the cavalry arrive in the form of greater liquidity and lower interest rates.