Simon English: Lloyds boss says we are not all doomed, and he should know

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The Independent Online

Outlook Predicting is difficult, especially for the future. Ask any City economist. They'll tell you. Lloyds Banking Group boss Antonio Horta-Osorio isn't an economist. Which does at least give him a chance of getting it right. One day after ghastly GDP figures suggest we are all in the mire, he popped up with half-year results and the following message: be calm. The end of the world is not nigh.

Lloyds' size — it is the biggest bank in the UK since its forced takeover of HBOS — means Mr Horta-Osorio is in possession of as much economic data as nearly anyone in Britain. If folk out there were really, really in trouble, he'd be among the first to know.

You hope Sir Mervyn King at the Bank of England rings him at least once a fortnight for a casual how-are-things-going chat.

On the basis of the rate at which Lloyds' customers are repaying their loans and otherwise managing their financial affairs, he thinks things are going ok, relatively.

The bank is still in a considerable mess, he would admit, but that doesn't mean customers are.

The Lloyds numbers, some of them anyway, are shocking. The extra £700m to cover PPI mis-selling claims is eye-watering. And while many of these claims are doubtless spurious, it is hard to have much sympathy for an industry whose business model is very largely based on selling people total rubbish then offering compensation later when they get found out.

Anyway, that didn't happen on Mr Horta-Osorio's watch and we can hope he means it when he pledges a complete change in culture.

Issues from the past will continue to haunt the company, he concedes, but it will deal with them in a way that eventually restores trust.

In the meantime, well, life may not be so bad. His economic predictions are that this year will be tough, flat at best. And that next year the economy will improve. That's roughly what he has been saying for a while. The only difference is that back then people thought he was being pessimistic and now they think he is being optimistic.

Those GDP figures may be a blip he says, and he is not alone here. If unemployment is falling, how can we really be in recession? Because of the seemingly never-ending crisis, the mood in financial markets and dealing rooms is glum. But just because the City is depressed, it doesn't mean the rest of us have to be.

After some time off last year for tiredness following a period of overwork, Mr Horta-Osorio sounds chipper. And in the long run, taking a three-year view, and assuming the eurozone crisis does eventually pass, his shares must be cheap at 29p.