Reasons to be cheerful
This week we hosted our Breakfast Club 2012 finale at the RAC with an End of Year Review. Discussing the year’s big events were Daniel Finkelstein, Oliver Kamm and Richard Lambert, moderated by BBC Newsnight presenter Emily Maitlis.With so many different issues dominating the headlines over the past 12 months – from the Arab Spring to phone hacking to the death of Osama Bin Laden – only one subject dominated the panel’s discussion – the state of the global economy and what will happen next.
However, despite the general doom and gloom regarding the world’s finances, Richard Lambert chose to buck the trend and take an optimistic view, of the British economy in particular. He had several points to support his argument that, really, things could be a lot worse:
- The Eurozone will muddle through.
- The UK’s bank and corporate balance sheets are strong.
- Most experts agree that UK inflation will fall.
- Even though this didn’t make the headlines, the Office for Budget Responsibility (OBR) also predicted that employment will rise.
- The Coalition government has convinced the bond markets of its credibility, keeping yields low.
- The OBR is probably deliberately over-gloomy with its forecasts, having been too optimistic in the past.
- People tend to exaggerate how bad life is when times are bad, and become over-optimistic when times are good.
Let’s hope he’s right…