We’re all going to suffer in long run

Dec 11 2008 by Peter McCusker, The Journal

ONLY weeks ago the refrain was that, while people acknowledged a crisis in the City and the international money markets, the so-called real economy was ticking along nicely.

It was, though, all those effete bankers – being largely southern big girls’ blouses – who were bemoaning a sort of economic “man flu”, while the hardier and more stoical types in manufacturing were just rolling up their sleeves and getting on with the job.

Well now everyone is starting to suffer. Bank of England policy maker Andrew Sentence has said the recession is likely to be comparable in length and depth with the three major UK downturns since the Second World War. Unemployment is rising, the housing market is collapsing and industrial output fell by 1.7% in October, the biggest fall in nearly six years.

Nor is there any sign that the weaker pound is going to bring relief through making our exports cheaper, as our trade deficit with the rest of the world widened to £7.75bn in October.

All this is just numbers, but each dismal new statistic represents real hardship for businesses large and small and, over the weekend, in the course of a few hours I had three examples of firms chasing custom.

First, a bathroom fitting outfit which we consulted months ago contacted us to see whether we would like another quote. Then a local electrician, which we last used a couple of years ago, put a flyer through the door offering us, as loyal customers, a big discount off our next invoice.

Finally, the dealers where we bought our last car rang to offer a heavy discount and an impressive range of free features if we bought a new model.

This only mirrors the high street where Marks & Spencer and Debenhams have both said they will be offering more price cuts to encourage shoppers.

But surely things will not get as desperate as they seem to have done in Belgium. There, Antwerp car dealer Cardoen is so anxious to drum up trade it is offering a buy one, get one free deal on certain new cars.

This sort of thing may be good news for a few people in the short term, but, in the long run, we’re all going to suffer.

Peter Jackson is a freelance writer and former business editor of The Journal – p.jackson77@ btinternet.com