Economy

‘Always be cheerful’ – a motto to which I’ll return in the final item – speaks to my natural demeanour. But when asked whether I see grounds for optimism in the UK business scene, I’ve struggled lately to find anything positive in the near-certain advent of a Labour government, the agonisingly slow retreat of inflation and the damage of still-rising interest rates. Nevertheless, let me take a step back. In an ONS survey this month, four times as many respondents (36 per cent) thought their business performance would improve over the next 12 months compared with those who thought it would decline (9 per cent). There were also upticks in expectations for manufacturing output and in consumer confidence.

Should US regulators ban short-selling of bank stocks? That’s a hot topic as investors refuse to accept reassurance from the Fed chairman Jerome Powell that the recent banking crisis-that-wasn’t is over. Following JPMorgan’s rescue of First Republic, shares in other regional banks such as PacWest in Los Angeles, Western Alliance (Phoenix) and First Horizon (Memphis) have fluctuated wildly and fingers have pointed at short-sellers – who borrow shares they think are about to fall in order to sell, buy back cheaper and pocket a profit. That’s bad, say critics, in the broad sense that it’s a negative form of investment, the reverse of backing companies you believe in; and much worse if sellers spread false rumours to push shares down.

It was, admittedly, not quite as thrilling as an action sequence from Call of Duty. Even so, the statement put out by Bobby Kotick, chief executive of US video game publisher Activision, following the UK’s bizarre decision to block the company’s acquisition by Microsoft was about as bloodthirsty as any ever put out by a major corporation. The ruling ‘contradicts the ambitions of the UK to become an attractive country to build a technology business,’ he argued. Even worse, ‘it does a disservice to UK citizens, who face increasingly dire economic prospects’, and, to cap it all off, it shows that Britain is ‘closed for business’. Of course, it would be easy to dismiss that as sour grapes from a man who has just seen $70 billion of Microsoft’s money slip through his fingers.

Fulfil your civic duty. Get married. Have children. That was the message from Miriam Cates, the increasingly prominent Conservative backbencher, to guests at a drink reception earlier this week. In what even her fiercest critics would have to concede was an impressively bold speech, Cates suggested that many of her female constituents want to work less and spend more time with their children. She claimed that politicians belonged to a class that had been protected by marriage and family, insulated from family breakdown to such a degree that they fail to realise how important it is. Few politicians can ride out a Twitterstorm without some sort of retraction, and Cates is no exception.

There have been celebrations this morning about a government surplus of £5.4 billion last month, and people are even talking about a ‘windfall’ for Chancellor Jeremy Hunt in next month’s Budget. But all this shows is how conditioned we have become to appalling economic news – and that we will grab at anything which seems to indicate a shaft of light. Nevertheless, any talk of a government ‘surplus’ masks the very real problem the government still has While any surplus is to be welcomed – and last month’s borrowing figures are far better than the Office for Budget Responsibility predicted – we would be in serious trouble if the government had not succeeded in running a surplus last month.

Rishi Sunak ruffled his own party’s feathers last week when – in reference to last autumn’s market turmoil – he told an audience in Lancashire: ‘You’re not idiots, you know what’s happened.’ This was quickly interpreted as the Prime Minister branding the MPs and business leaders calling for immediate tax cuts as ‘idiots’, sparking not only backlash but also another round of debates on a topic that has been dividing the Tory party since last summer. Just how quickly and aggressively can the party start to cut the tax burden down from its 72-year high?

If you’re the sort who rarely checks your 401K and other investment accounts, you may be blissfully unaware of what a dismal year (plus) its been for the stock market. Many prominent media personalities, particularly ones on CNBC, promised us that Biden would be a boon to the stock market because Trump was too erratic. But while the market started hot in 2021, it's mostly been ice cold ever since, with a few fake rallies thrown in to tease us. How bad has the Biden era been for stocks? Consider some numbers I crunched prior to the market opening on December 12.

The Great Resignation continues, with a new study revealing that employees in many industries are quitting at higher rates than 2021. Accommodation and food services lost 5.8 percent of its workforce — 773,600 workers — in 2022, an increase of about 128,000 over the same period in 2021. Retail lost 3.82 percent, or about 600,000 workers, though this is 109,000 fewer than the same period in 2021. In third is the entertainment sector at 3.58 percent, accounting for 82,200 jobs, rising 7,000 compared to 2021. These industries happen to be where employees are in closest contact with customers — which would probably cause Cockburn to quit too, given how rude folks can be. Manufacturing and mining, by contrast, saw 2.42 and 2.3 percent respectively.