As the election campaign goes into full swing, we hear surprisingly little about the state of the UK economy — because the Tories can’t (and probably don’t need to) promise that they can make it any better in the medium term than it is now, while almost no one takes seriously what Labour has to say about it. The truth is, against the odds and for the time being, that it’s ticking along nicely enough not to be a top concern for most voters.
Are we right to be so complacent? After a slowdown in growth to just 0.3 per cent in January to March, most analysts expect a pick-up in the current quarter, and the IMF now agrees with the Budget forecast of 2 per cent for 2017. The construction, services and manufacturing sectors all reported rising activity in April. Helped by the weaker pound, factory activity was actually at a three-year high. Job creation continues apace, and the latest reports say many employers are struggling to fill skilled vacancies. On the negative side, consumer confidence has weakened in response to the uptick of inflation, with YouGov’s monthly index for April giving a reading of 108, its lowest since last July — but still indicating that more people are confident than the reverse.
So what can go wrong? The answer comes in three parts. First, inflation could go higher (despite the rash Tory promise of an energy price cap), squeezing real wages, denting spending and forcing the Bank of England at last to contemplate raising interest rates. Second, related to that, the consumer debt bubble — credit cards, personal loans and financing deals for new cars — could go pop. Third and most likely, a hostile Brexit stand-off could create uncertainty on all fronts. Let’s get real: some or all of this is bound to happen, even if we’re not talking about it now. But none of it constitutes a reason not to vote for Mrs May.
A job for Archie
Shareholders in Marks & Spencer can take comfort from the appointment of Archie Norman as the store group’s new chairman, while board members should probably expect a more bracing style of leadership than they experienced under his predecessor, City veteran Robert Swannell.
Norman is a no-nonsense, hands-on turnaround specialist who prefers small boards that take firm decisions. He famously transformed the Asda supermarket chain as its chief executive in the 1990s and oversaw a quadrupling of ITV’s share price as its chairman from 2010 until recently — while also chairing Lazard in London and commuting regularly to Australia to advise a retailer there. Now he’ll be breathing down the neck of M&S chief executive Steve Rowe, who made his name in the successful food division but faces the challenge of arresting the decline of the clothing side with which the brand is indelibly associated, both by shoppers and the stock market.
Norman’s only career mistake, incidentally, was to go into politics as a Conservative MP at the nadir of the party’s fortunes in 1997. Power interested him, but opposition didn’t: after an unhappy stint as shadow environment secretary, he was succeeded in that role by Theresa May and left parliament in 2005, to be succeeded in the safe Tunbridge Wells seat by Greg Clark, now business secretary. If he’d stuck it out, I wonder which of their jobs he’d be doing today.
Hats off to Mr Yip
The Sunday Times Rich List is an annual source of fascination, but its top tier of multibillionaires now tells us nothing more than that great wealth breeds upon itself — as Thomas Piketty might argue — with little connection to ordinary economic life. Those mysterious Hindujas, Blavatniks, Reubens and Usmanovs exist in a heavily guarded parallel universe where they cannot possibly spend what they earn and probably envy the rest of us our freedom.
Far more inspirational is the steerage class of the 1,000-strong list. Down at 962nd equal is a colourful cross-section whose only common denominator is relatively modest wealth of £110 million apiece.
Here are the carpet entrepreneur Lord Harris, the East Anglian vegetable farming Bartlett family, the Houser brothers who created the Grand Theft Auto video game, the City gent Sir Simon Robertson, the femme fatale of Middle Eastern finance Amanda Staveley, the ageing rocker Phil Collins and the Lottery mega-winner Neil Trotter, who is ‘a former Coulsdon car mechanic’.
As admirable as any is the last name of all (alphabetically, that is): Woon Wing Yip OBE, a native of Guangdong who arrived in Birmingham in 1959 with £10, built a chain of Chinese supermarkets and founded an educational charity. A perfect role model for those who hope luck, talent, effort and risk-taking might one day win them recognition, even if only in the vulgar form of a list of the rich.
Le village en marche
Regular readers will be anxious to know whether my Dordogne holiday village of St Pompon maintained its record as a presidential election indicator, having threatened to do the opposite in the first round by putting Marine Le Pen, the Trotskyite Jean-Luc Mélenchon and the scandal-hit François Fillon all ahead of Emmanuel Macron, to whom they gave just 45 votes. The good news is that in the second round my neighbours gave Macron 147 against 93 for Le Pen. A pragmatic swing — presumably requiring much holding of noses in polling booths — but good news because after the dire era of François Hollande, France’s economic prospects can only improve under Macron, even if reform comes slowly. And in the post-Brexit long run, the UK would surely rather have a prosperous neighbour than a sullen and failing one.
As for the financial markets, like your columnist they prefer the least chaotic
outcome at election time, and the one most likely to allow business to get on with its job. So relief all round.