Martin Vander Weyer

I admire the Chancellor for his clarity of mind and his coolness under fire, but I don’t believe a word of his forecasts. I didn’t even believe the forecasts he read out on Tuesday from the independent Office for Budget Responsibility, and I’ll hazard a guess that the Chancellor wasn’t really putting much faith in them either. The key predictions of 0.9 per cent growth this year and 0.7 per cent next year, and all the borrowing numbers that flow from them, depend, he was careful to point out, on whether the eurozone finds a way through the current crisis: ‘If they don’t then the OBR warn that there could be a much worse outcome for Britain.

I wrote here in July that I was hoping to see history reversed at Northern Rock. Shortly after that, Swiss boffins declared that time travel really might be possible, after discovering they could fire neutrinos through an Alpine tunnel at a fraction faster than the speed of light. But the idea of propelling the privatised remains of the Rock backwards through several decades — to emerge as a mutually owned and socially responsible provider of mortgages to sensible savers in the north-east — was never high on the Treasury’s agenda. The bank whose 2007 collapse heralded 2008’s financial armageddon was always going to be sold to the highest bidder at the earliest moment a deal could be made to stand up and not look too embarrassing for George Osborne.

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.

What are bond markets saying about Italy? With my usual proviso that markets are best understood as shoals of piranhas, communicating moods of panic, indifference, bloodlust and satiety rather than coherent ideas, the relatively clear message earlier this week was that Italian government bond yields were perilously close to the threshold of panic. That threshold is widely deemed to be 7 per cent, more than 4 per cent above benchmark yields for German, French and Dutch debt. Let me try to put this in perspective. The incremental interest cost to the Italian treasury is about €2 billion per percentage point per year, which doesn’t sound too terrifying.

‘The boom in top people’s pay is gathering momentum,’ I wrote before some of you were born — those of you who are still at school, that is. I went on to quote a leading industrialist of the day: ‘Shareholders won’t be able to stop it. Moderation will have to come through pressure of public opinion.’ Statistics from the same source two decades apart suggest public opinion has done a pretty feeble job. In a piece headed ‘Snouts in the Trough’ (1 May 1993), I quoted an Income Data Services (IDS) survey of FTSE 100 companies whose chief executives had received average annual pay increases in the depths of the 1991-92 recession of 15 per cent, to £463,220.

Deep in autumnal France, it’s eerily quiet except for a flock of magpies in the trees — an omen of ‘death and hard times ahead’, or so I read on a website for druids which is as informative as any of the more mainstream sources about the chances of successful resolution of the euro crisis. ‘Le plan sera decidé mercredi’ declares the most mainstream, Le Figaro, in the de haut en bas tone of a paid-up member of the Euro-establishment. But my neighbours here are more agitated by the second story, ‘Rugby: la defaite avec panache’, and at least mildly interested in the third: ‘Carla et Giulia sortent de la maternité’.

As mass expressions of anti-capitalist rage go, ‘Occupy London Stock Exchange’ has been a bit of a damp squib. What was meant to be an assault on the epicentre of evil dealing, co-ordinated with similar eruptions in New York and elsewhere, swiftly turned into an extended coffee morning on the steps of St Paul’s Cathedral. Perhaps the genteel protesters did not realise that their target was ill-chosen anyway because the Stock Exchange building in heavily defended Paternoster Square (owned by the Mitsubishi Estate company of Japan — there’s globalisation for you) houses only the market’s bureaucrats, while the evil dealing itself takes place in cyberspace above.

Hang on to your popcorn – this could be the final reel of the euro disaster movie The good news is we’re in a new phase of the euro crisis. The bad news is we don’t know how it’s going to end. In every good disaster movie, there’s a moment when bickering bureaucrats who have failed to tackle the threat — epidemic, earthquake, invasion — are sidelined to make way for the maverick (and unkillable) hero or heroine. A classic example comes in Independence Day (1993) with the sacking of spineless secretary of defense Nimzicki and the triumph of the computer nerd played by Jeff Goldblum, who figures out how to zap giant alien spacecraft.

UBS: the bank that lost the formula to turn Mr Hyde back into Dr Jekyll ‘Thank you, UBS,’ writes the FT columnist Martin Wolf, who as a member of the Vickers commission on banking reform was one of its strongest proponents of the ‘ring-fencing’ of retail banks to protect them from the casino follies of securities trading. There could hardly have been ‘a better illustration of the unregulatable risks to which investment banks are exposed’. Indeed, the management failure that allowed Kweku Adoboli to rack up $2.

Safer banking will mean the same rotten service at a higher price Cross-party support made the release of the Vickers report on banking reform less of an event than it might otherwise have been. Vince Cable looked almost benign on the Commons bench beside George Osborne. Ed Balls had nothing new to say. After all their lobbying beforehand, bankers got no sympathy for the £7 billion that Vickers says ring-fencing and re­capitalising their retail operations will cost, and barely bothered to protest. Ring-fencing, as I have repeatedly argued, is far from a complete defence against the full range of banking follies. But nor need it be a disaster for banks’ profitability, given the eight-year implementation timetable within which they will be able to squeeze costs to fit.

A thunderous collapse could drown out the clamour over banking reform The banking lobby doth protest too much, methinks — to misquote Hamlet’s mother — and so doth its enemies, not to mention the opponents of planning reform. In fact, there’s a whole lot of grandstanding going on in the public arena which I fear may suddenly be silenced either by a thunderous collapse of the eurozone or the giant toilet-flush that will signal the onset of renewed global recession. Or both.

Steve Jobs: the perfectionist who raised industrial design to the level of high art I’m no techie but I have long been an admirer of Steve Jobs, whose declining health has forced him to step down as chief executive of Apple, the Californian technology giant he co-founded 35 years ago. Many tributes have been paid, the Sunday Times even asking whether he is ‘the greatest businessman of all time’. That would be too big a claim: Henry Ford might feel the title is still his. In Jobs’s own field of consumer gadgetry, however, I’d say his only peers were Akio Morita and Masaru Ibuka, who founded Sony in a workshop in bombed-out Tokyo in 1946 and built a global electronics brand that, like Apple, is associated with bold innovation and engineering quality.

Why Merkel and Sarkozy cannot deflect blame onto Anglo-Saxon speculators Chemistry between the frumpy hausfrau Angela Merkel and the vain little egomaniac Nicolas Sarkozy never looks warm, but their summit in Paris on Tuesday must have been more than usually fraught. The French economy failed to grow in the second quarter, while Germany achieved just 0.1 per cent and the eurozone as a whole notched up only 0.2 per cent, the same as the UK.

The hard-working bloke in his burned-out shop is the true symbol for our times What horrors. As I write, the FTSE 100 index has dived below 5,000 for the first time since last July, the mood of the London investment community darkened by the sense that civilisation is breaking down. There’s no glimmer of goodness or optimism in the morning’s news: everything — not only the economic outlook but also human nature itself — looks nastier and more incorrigible than it did a fortnight ago. But the combination of mass criminal damage with the destruction of many months’ gains in investment values (unless you’re a gold bug or a holder of Swiss franc bonds) at least reminds us who it is that deserves a proper portion of sympathy.

The greatest nation? This debt fiasco makes Washington look like a parish council I love America, and if you look at my Wikipedia entry — which I have neither the vanity nor the knowhow to bother to edit — you might suspect that I’ve been brainwashed to say so, because I am ‘a leading figure within the British-American Project’. I am indeed active in that excellent networking organisation, which has never been anything like the sinister Reaganite propaganda vehicle that Pilgerists and Guardianistas imagine it to be. And it has given me valuable insights into the national characters of movers and shakers from both sides of the pond who form its membership. The Brits, mostly arts graduates, tend to be argumentative free-thinkers with opinions about everything.

Barely a flicker of growth, but Osborne mustfollow his instincts and stick to his guns Cut taxes now, or pile more taxes on to the bankers? Cut spending even faster to compensate for flagging tax revenues, or slow the cuts to ease the dole queues and boost confidence among consumers who still have public-sector jobs? Ban royal weddings, or at least the ones that cause the nation to stop work for a week and a half? Print more money, or tell Vince Cable to sod off and stop rocking the boat? George Osborne has a rich menu of choices as to how to respond to the news that second-quarter growth barely crawled into positive territory, at 0.2 per cent. But they’re all tough ones, and apparently he now has the Prime Minister breathing down his neck as well.

Another Murdoch lesson: when the iceberg looms, it’s too late to change course The sixth most famous Murdoch in history, after Rupert, James, Wendi and Rupert’s parents Sir Keith and Dame Elisabeth (the latter still with us at 102, and presumably wondering what the boy will get up to next) was of course William McMaster Murdoch, First Officer of the Titanic. If space permitted, I’d expatiate on how cruelly this heroic Scotsman was misrepresented in the 1997 cinema epic in which he is seen taking a bribe and shooting two passengers before turning his gun on himself.