Now is not the time for the economics of Chicken Licken”
Could Andy Haldane be right that excessive pessimism is holding the economy back?
The Bank of England’s chief economist sent out a warning this week that “collective anxiety” could be as damaging to both our wellbeing and the economy as Covid itself. Haldane argued that good economic news is being under-reported, with the media focusing on the more dramatic statistics. The press sensationalising stories? Surely not! He likened the undue pessimism, caution and panic to Chicken Licken screaming in a blind panic that the sky is falling down. Certainly a vivid image. But is he right? Is our fear holding the economy back?
Positive mental attitudes only!
I have always been a ‘can do’ person, never accepting that things can’t improve or be improved. Definitely a glass half-full sort of guy. Of course, I haven’t been immune to the effects from the fallout from the pandemic and neither has the recruitment industry. I think anyone would be lying if they said that Covid-19 hadn’t affected them in some way, left them feeling low at some point. It has undoubtedly had a devastating effect on so many. But I strongly feel that now is the time for optimism, for pulling together and striving forwards.
Bank of England advisors are now saying that they expect GDP to be around 3-4% under its pre-Covid levels by the end of the third quarter. “In other words,” says Haldane, “the economy has already recovered just under 90% of its earlier losses”. According to the Bank of England, consumer spending has also been higher than expected, with UK consumption rising by an average of around 2% per week since May and consumer spending now at pre-Covid levels, a whole year earlier than previously forecast. This is all great news but no-one is talking about it! Yes, there are scary statistics, the unemployment rate is set to rise with the end of furlough and we’re heading into a winter where no-one can predict what might happen, but what we all need is a boost, not more scaremongering.
It’s getting better
Personally speaking all the businesses I’m involved in during the first lockdown took a hit, Wave especially – being in job distribution and recruitment technology we saw a steep decline, but I am pleased to say that generally since the end of the summer, we’ve seen all businesses recover and continue to do so.
What we don’t want is for this fear for the future to become a self-fulfilling prophecy. “Planning for the worst is important, but needs to be accompanied by hope for the best” – Haldane’s words but an ethos that we all share here at Wave. We can all play our part in the economic recovery of our country and the recruitment industry will have a huge role in that. Let’s ensure we are equipped to deal with the worst this virus throws at us but strive towards the future with optimism.