The Bank of England was expected this week to slash its growth forecast for the current year and next to around 1 per cent, down from previous forecasts of 1.5 and 2.1 per cent — but that’s still optimistic according to a European Commission report which projects no better than 0.7. Official figures were also expected to show the number of unemployed 16- to 24-year-olds passing a million for the first time. In the eurozone, where Marios are suddenly in the ascendant, the new ECB president Mario Draghi admitted that ‘mild recession’ is in prospect while pundits gave Italy’s new prime minister Mario Monti a month at most before his country’s bond yields move back into meltdown territory. Meanwhile the shoal of market piranhas darted towards Spain, where yields passed the 6 per cent marker.
Dismal statistics and rampant pessimism abound, and that’s the way it’s going to be all winter — so I feel obliged, in my usual way, to scour the globe for positive news. Here goes. The IMF food commodity price index has been trending downwards since April and now stands only 1.4 per cent above where it was a year ago — evidence for the theory that inflation (which eased a fraction in the UK in October) will fall so long as central banks don’t start printing oodles of money again. The US economy grew at an annualised rate of 2.5 per cent in the third quarter, up from 1.3 per cent in the second and boosted by consumer spending; Germany and France fared a little better than expected in the third quarter — and Japan likewise showed a stronger than expected rebound after the devastation of the earthquake in March.
As evidence that big business and serious investors are looking across the slough of despond towards the next upswing, Emirates Airlines placed an $18 billion order for 50 Boeing 777s, with options for 20 more, while Warren Buffett took an $11 billion stake in the information technology giant IBM. As evidence that it’s still possible to tempt the British shopper — if only to drown his sorrows at home instead of going out — Majestic Wine announced record six-month profits on sales up by 9 per cent. To prove that Britain is still a player in the export game, Jaguar Land Rover was expected to announce a two-thirds increase in sales to China. And Tamara Mellon departed from Jimmy Choo, or possibly the other way round; either way, I’m sure it’s for the best.
• Groß Zentral
The rule of modern railways, I suggest, is that the more your passengers like you the less likely you are to survive — at least as an independent venture. GNER, the East Coast franchisee that set a benchmark for civility to customers, ran out of cash in 2007. Its successor National Express East Coast tried hard but lasted less than three years, as did the charmingly quixotic Wrexham & Shropshire service from Marylebone. Now Grand Central, the four-year-old operator of friendly trains from Sunderland and Bradford to London (and the preferred service for everyone I know in the north), has fallen victim to financial pressures and sold itself to Arriva, which is in turn owned by German taxpayers through their state railway company, Deutsche Bahn. Proving my rule the other way round, FirstGroup, operator of the deeply unloved First Great Western, Capital Connect and TransPennine franchises, has just announced a 56 per cent half-year profit rise to £128 million.
Grand Central is by no means down and out, however, and loyalists will hope that it flourishes under its new owner — though it was also Deutsche Bahn that owned and closed the Wrexham & Shropshire, and we can’t expect German taxpayers to invest a whole lot more in British trains while they have an entire bankrupt eurozone to support. It’s a bizarre outcome of the mayhem of rail privatisation that more than half of our passenger services have now been renationalised, but largely by other nations: the French and Dutch are here in a big way too. If the trend continues, perhaps our railways will one day be wholly owned by a European fiscal superstate. Then they can be privatised again — and next time, let’s do it properly.
• Dark Matter
Much of our transport is run by continental operators; the Jaguar Land Rover brand is as British as Sir Jimmy Savile but it is actually owned by Tata of India; and this week another great British corporate name of yesteryear migrated abroad. The remains of EMI, once the biggest recorded music business in the world, were carved up between Sony of Japan and Universal, which is owned by Vivendi of France — having been auctioned for a better-than-expected $4.1 billion by its interim owner Citigroup, the US bank. The passage of iconic British businesses into foreign hands is not always to be lamented — Tata’s stewardship of Jaguar has so far been a triumph — but the trend is so relentless that it suggests, at the very least, an excess of pessimism in British boardrooms.
I’ve just come across a startling example of foreign ownership in unexpected places. Potash, you will recall, is a hot commodity these days — a mineral fertiliser much sought after to help improve crop yields and feed the world’s seven billion. Cresting a hilltop near the coast north of Whitby on Saturday, I found myself facing a huge industrial complex in the middle of nowhere called Boulby Mine — Britain’s biggest potash workings, producing half the UK’s output plus large quantities of rock salt. Who owns it? An Israeli group called ICL, listed on the Tel Aviv stock exchange. And what else happens at the bottom of its 1,400-metre shaft, one of Europe’s deepest? The UK ‘Dark Matter’ laboratory — ‘searching for the missing mass of the universe’, as the sign on the guarded gate matter-of-factly describes it. Suddenly I felt transported back to a gripping 1980s television drama called Edge of Darkness, which involved sinister goings-on down mineshafts and elsewhere. And it occurred to me that if we need a title for the drama we’re all about to live through this winter, ‘Edge of Darkness’ it is.
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