It’s time our Doomsters in Chief stopped talking the UK down

RECESSION? What recession? The Bank of england, the office for Budget Responsibility, the BBC’S Today programme and the rest of the doomsters may be convinced that we face an economic apocalypse.

But the facts refuse to oblige. confounding all expectations, output in Britain grew by 0.1 per cent in november, leading city analysts to upgrade forecasts. That means we’re not in a recession after all.

And it could get even better when we see the official December data. in spite of all the doom and gloom about a disastrous seasonal shopping season, British consumers did what they do best and opened their wallets.

The result? Retail sales soared – right in the midst of the ‘cost of living crisis’.

Growth in november was driven by the UK’s resilient services sector – everything from haircuts and shopping malls to the banks and legal services of the city, as well as entertainment and communications. it accounts for nearly 79 per cent of our national output.

so in spite of months of bad news from Downing street in the form of tax hikes and budget cuts – as well as a stream of headlines about soaring energy bills, rampant inflation and relentless strike actions – christmas 2022 brought excellent economic news.

From the high street to the retail park, sales were brisk. shopping boomed across the country, in almost every category – be it supermarket groceries, beauty products at Boots, or nike Air Force trainers – keeping the tills rattling throughout the festive period.

Marks and spencer, far from being a busted flush, saw turkeys and sparkling wine help to deliver a 6.3 per cent gain in sales. Midmarket sainsbury’s, thought to be a victim of competition from value retailers Aldi and Lidl, also defied the odds with a 7.1 per cent rise in sales over christmas.

CORKS were also popping at the UK’s biggest wine retailer Majestic, where price cuts brought shoppers through the doors in droves. stunningly, sales were 21.1 per cent above pre-pandemic levels.

JD sports, meanwhile, recorded a 20 per cent lift in sales over the holiday period, driven by 2.6million pairs of nike trainers.

But it’s not just shops. in aviation, passenger numbers at Heathrow were up 90 per cent on the 2021 festive period – when the omicron variant of covid-19 blighted festive getaways – defying industrial action by border staff.

Meanwhile, the office for national statistics reported this week that, in 2021, UK output per hour worked ‘had the fastest growth of the G7 countries’. not something likely to lead BBC headlines.

Banking giant JP Morgan chase says about three-quarters of its mid-size UK business leaders plan to grow their enterprises this year – and have no plans to shed jobs.

so despite all the dire talk from the Bank of england and others about the longest recession in our history, things could be turning out far better than expected.

And saying this matters. Because drumbeats of bad economic forecasts can fast become self-perpetuating, ramping up the gloom and helping to delay our recovery. even the Doomster-in-chief – chancellor Jeremy Hunt – now believes that the economic slowdown will be milder than forecast.

so why isn’t he – and our glum Prime Minister – shouting the positive news from the rooftops?

After all, it is the Tory party’s ‘energy price guarantee’ on bills, along with targeted help for the poorest families, that together have taken the sting out of household gas and electricity costs.

And that’s in addition to the recent sharp fall in the price of wholesale gas, as a result of the extraordinarily mild european winter. This has reduced demand and lowered tariffs.

Yet nos 10 and 11 have echoed the pessimistic economists.

THe British Retail consortium’s chief executive Helen Dickinson said in early December that ‘the cost of living crisis means many families might dial back their festive plans’. she could not have been more wrong.

it’s clear that, while pressures are real, people have not stopped spending. Amid the purported misery, it seems families are still determined to enjoy themselves.

My view is that the soothsayers have underestimated two post-pandemic factors. That savings approaching £200billion, built up during the pandemic, have been waiting to be spent. And that, ahead of the holidays, fewer credit cards had been swiped to their limits than in previous years.

The British Retail consortium continues to warn that because of further rises in the cost of living, retailers face headwinds in 2023.

Maybe so. But inflation is forecast to fall, wholesale gas prices have tumbled and the employment market remains strong.

The pessimism is being overdone. There is still some way to go, but that should not preclude our leaders hailing the resilience of consumers or the skill with which industries are managing their way through difficult times.