Jim Armitage: Kingfisher boss keeps his Krug in the fridge over British recovery

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The Independent Online

Outlook Ian Cheshire is one of our more cerebral chief executives. The Cambridge economics and law graduate who runs the B&Q owner Kingfisher is given to penning the occasional well-reasoned treatise on subjects such as "sustainable capitalism". His entry in Debrett's mentions his numerous advisory board positions in academia and Westminster. He is, in short, a man worth heeding – especially in matters economic.

Running a company with major operations in the UK, France and elsewhere on the Continent, he has a better coalface view of the macro economy than most, plus a sizeable business in China to boot. And he is far less excited about the pace of recovery than the Chancellor of the Exchequer.

Yes, he says, we may be seeing a shift in sentiment towards an improvement in conditions here in Britain, but let's keep the Krug in the fridge for now. For, as he puts it: "we might be getting ahead of ourselves".

While the forward indicators in the economic data are clearly improving, just how soon that will show up in the tills at B&Q's DIY sheds – and other consumer-facing businesses across the country – remains to be seen.

As for France, Kingfisher's till rolls tell an unremittingly grim story. The DIY market there is still falling, hitting comparable sales in its Castorama and Brico Depot sheds. These are big businesses, with annual takings of £2.3bn.

And if Kingfisher is suffering, you can bet all the other British businesses selling into France are also still suffering. France is our third-biggest export market, worth more than £20bn a year.

Yesterday, President François Hollande had to cut growth forecasts for next year to a measly 0.9 per cent, while his budget deficit remains as wide as a Haussmann boulevard.

UK exporters fear more painful tax rises and spending cuts are his only options to help close the gap for the next few years: not what anyone wants their French customers to be enduring.

B&Q's other foreign businesses are smaller, so we should treat its experiences there with a bit more caution, but same-store sales were down in Poland and Spain, only partly shored up by better figures from Russia and China.

In other words, Europe is far from being fixed: which means Britain isn't either.

George Osborne was understandably jubilant, even partially justified, in this week's attack on Ed Balls, and by dint, those commentators wrongfooted by the apparent pace of the economic recovery. But without a sustained improvement among our key trading partners abroad, his jubilation could still end up looking somewhat premature.