Often such people are to be heard lecturing us about what we are doing wrong and why extra tax breaks or subsidies for their businesses amount to the only sensible way forward. But yesterday the transatlantic drawl of Barclays chief executive Jes Staley came as music to our ears. For Mr Staley became the latest heavyweight economic figure to herald the good news: Britain is on the brink of a remarkable boom. What is more, it is shaping up to be a sustainable job-creating boom rather than a reckless inflationary one.
“We estimate the UK economy will grow at its fastest rate since 1948. That’s pretty spectacular,” he said, adding that the second half of this year “will be quite something”. The Roaring Twenties really are on the way – they just turned up a year late.
Mr Staley says there is £200billion worth of pent-up demand in the economy, with consumers ready to spend their share as we unlock after Covid and businesses poised to unleash a tidal wave of investment. And there is enough spare capacity to cope without igniting uncontrollable inflation or pushing interest rates up to a point where they will choke off the growth.
The UK, he said, is also poised to leave the eurozone economy trailing behind it – something that will no doubt come as a further blow to those who wish us to rejoin the EU.
That even the BBC decided to give Mr Staley’s remarks plenty of coverage is probably explained by the fact that over the past month more than a dozen major financial institutions, think tanks and forecasters have upped their projections for UK economic performance.
For example, the EY Item Club has raised its growth forecast from 5.0 to 6.8 percent, saying the economy has “proven to be more resilient than seemed possible”. Goldman Sachs is predicting “striking” growth of 7.8 percent.
In a saner climate of political debate it would go without saying that this outlook is rather more important to the state of the nation than are confected rows about Downing Street curtains or text messages. But given the current priorities of the opposition parties and their media cheerleaders, that does indeed need stating.
More importantly still, these dry-sounding percentages are going to transform the lives of hundreds of thousands – particularly young workers who may have been made redundant during the 10 percent economic contraction we suffered in 2020.
When Chancellor Rishi Sunak gave his Budget statement at the start of March, he already had an inkling of the improving picture, telling MPs that the independent Office for Budget Responsibility now expected unemployment to peak at 2.2million, rather than the 4million it had forecast a year earlier. That was based on the OBR’s prediction of 4.0 percent growth this year.
If growth comes in significantly higher than that then the joblessness peak will be much lower still. Indeed, the EY Item Club has lopped 400,000 off its own unemployment forecast.
And the good news does not end there either. Higher growth will mean higher tax revenues too and therefore big and much-needed improvements to the public finances.
Some will say that overseeing such a rebound is easy given the extent of the shrinkage last year. But recent history tells us this is not the case. Indeed, it took five years for the economy to make up lost ground from the six percent contraction that followed the 2008 crash. On current trends it will make up the lost 10 percent of last year before the middle of next year.
Mr Sunak and Boris Johnson deserve to be congratulated because much of it stems from the very big call they made at the start of the pandemic.
Bringing in hugely expensive policies such as the furlough scheme and borrowing enormous sums to support the economy was a leap of faith. If things had gone wrong they would now be heading for the exit door at high velocity.
But, as Mr Johnson said, the Government chose to “put its arms around people at a time of crisis” and it worked. There is going to be far less long-term “scarring” than most economists expected.
Having already got big calls right in forcing a Brexit deal and setting up an independent UK vaccines task force, the PM is going to make it a hat-trick. His critics may find him maddening, but it’s not a bad knack for a leader to have.