Business Eye: It’s still a scary world

The local economic news in Bucks looks pretty good by most all global comparisons.
Alex PrattAlex Pratt
Alex Pratt

Firstly, on a national platform, Bucks is top tier in the productivity and growth leagues, bottom of the unemployment and worklessness tables, and continues to outshine all-comers with our school, skills and environmental standards.

This, in a national economy that is growing above trend at nearly 4%, where there are a lot more people in work than there have ever been, and where unemployment is now a full 1% point lower than the 7% trigger that the Bank of England flagged for interest rate rises.

At a recent meetings with over 100 local medium to large local businesses, each one has been buoyant, growing strongly and looking forward with a strong sense of optimism.

So, why have interest rates not yet started their inevitable climb north, what is causing such volatility in exchange rates, and why has the stock market dived lower?

Globally, only the economies of the USA and Britain now appear strong, with growth in Germany and China now stalling.

The Eurozone is in potential meltdown with GDP still below 2007 levels and a real and present danger of deflation stalks the ECB.

It is very scary out there in the world economy and countries far from vying for the position as the strongest; now face a competition for which country is the least like an economic basket case.

Even here in the UK, the poster child for G7 growth, look under the bonnet and all is far from well.

Real earnings have been negative for many years, the productivity gap with competitor countries is at a 21 year high meaning we produce much the same as we did in 2007 but with 1 million more workers, and in common with other countries income inequalities are ballooning, with the rich doing well while the rest of us suffer.

This represents a destabilising threat to capitalism and democracy and suggests significant business risk.

The downside risks for business and jobs are not reduced by the real potential for an Ebola pandemic, the war with ISIS in Iraq and Syria, the prospect of our leaving the European Union and a year of electioneering where political priorities will be placed above economic realities.

All we can each do is focus hard at getting better at our defining differences and competitive advantage because 
the future looks tougher, not easier.