‘Economy: Back in the Black’
September 14, 2009 at 2:41 pm
Optimism is a tricky business. Ever since the UK recession began, some eight months ago, business gurus have kept their rifles loaded, determined to shoot down mad idealists before the media gets hold of the news.
The now-notorious ‘green shoots’ comment – coined by one Norman Lamont during the Great Recession of 1991 – has crossed the lips of countless professionals over the past year. Only in August, as the credit beast stomps over the horizon, is the public allowed to take it seriously.
On the 17th August, the Bank of England (BoE) declared an end to the recession by December 2009. Inflation rates remain frozen at 1.8%, but many British executives are witnessing profits rise for the first time in two years.
In June, the BoE was adamant that the economy was still foundering in the dark. Dr. Andrew Sentance, policy maker for the bank, believes that a low interest rate and an improved global economy contributed to the bank’s change of heart.
Investors are permitted their pessimism, however. Some experts believe that Britain is at the mercy of international banks, and will remain in the red until the economy settles in the US and in Europe.
With around twenty European countries still struggling to claw their way out of recession, the BoE’s newfound optimism may be short lived.
History has a few lessons to teach: compared to the Great Recession of 1991, the UK economy is ‘recovering’ some twenty-two months – almost two years – sooner than expected.
Whether the recovery is sustainable is another question altogether, but consumers can be forgiven for hoping for a white knight to steer all these black clouds away.
