One has to admire the Bank of England for its determined optimism in the face of all the facts. The only organisation that is even more adamant that the UK economy is going to grow is the Office for Budget Irresponsibility, and we all know how rarely that body ever gets anything right.
Today, the soon-to-be ex-governor, Sir Mervyn King, said the economy had “cause for optimism” and there was an “encouraging underlying picture”.
What makes this tragic is the timing. Today, the story appeared on the BBC’s business news web page beneath a revelation that the fashion chain Republic has become the latest High Street name to go into receivership, and an announcement that Blockbuster, which bit the bullet earlier this year, would be closing a further 164 shops – threatening 800 jobs.
Cause for optimism, Sir Mervyn? Really?
Comet has gone, Jessops has gone, HMV is hanging on by its forepaws after closing 66 stores. Now Republic. We understand more than 100 other chains are facing financial ruin.
What, in this situation, is the “encouraging underlying picture”? A resurgence in manufacturing? What good will that do, if everybody is out of work and unable to buy anything? Who will benefit?
It won’t be the people on the street. Republic had 2,500 employees; Blockbuster is likely to lose 800 staff. Those job losses follow the many hundreds in the other chains mentioned. If manufacturing does improve, it will be selling abroad, and the only beneficiaries will be company bosses.
You and I won’t see a penny of it.
One aspect of this that did make me smile was the fact that the administrators from accountancy firm Ernst & Young (itself no stranger to controversy – see the previous Vox Political article about tax avoidance for details) sacked all 150 staff at the fashion firm’s head office. All the managers lost their jobs, and quite right, too!