Simon English: Boom time it's not, but Wolfson may be right with recession denial
Thursday 02 August 2012
Outlook Recession? What recession? That's a tabloid paraphrase of what Simon Wolfson said yesterday, and as chief executive of Next he is perhaps in a reasonable position to know. Figures from the Office for National Statistics last week showed a 0.7 per cent decline in gross domestic product, even though the number of people in employment is rising.
That contradiction in terms had many observers scratching their heads, and some moaning that the ONS doesn't know what it is doing or understand what it is measuring. Lord Wolfson is not one of the crowd that thinks the ONS sucks. Even if he did, he'd be far too polite to say.
He prefers to observe just that it is very difficult to measure exactly how the economy is doing, and that sometimes the official numbers must be wrong.
As a supporter of austerity measures, Lord Wolfson is perhaps more likely to argue that the Chancellor's handling of the economy isn't as bad as all that. But he is also a highly skilled retailer and his own data supports the case that the end of the world may not be nigh.
He isn't saying that we are in a boom – far from it. The UK is flatlining, he reckons. But maybe just for now we could agree that flat is the new up, and that we shouldn't talk ourselves into doom.
People who say they are depressed are more likely to feel that they are.
It is possible to snap out of it. One reason for the gloom – in City terms, there's a bull market in bearish commentary – is that the people writing the comments exist in a negative bubble.
Folk in the City are miserable. The people they talk to in the media also are (it goes with the job). So negative impressions get reinforced. Away from London, life may not be so bad, or at least, it may be no worse than usual.
Lord Wolfson's sales figures show that people are still shopping; that they still need a new shirt for the office. No one shops at Next in order to dress for unemployment.
Increasingly, there's a space between what top businesspeople are saying – hold steady, we may be ok – and what is coming from the banking sector.
The predictive record of banks and economists is not what you would call impressive.
It is reasonable to hope that Lord Wolfson is right.
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