A plea from the Bank of England’s deputy governor for Britons to embark on a spending spree to inject new life into the economy was among the most farcical examples of pots and kettles that I have ever encountered.
By his own admission, Charles Bean is sitting on interest rates to discourage savers because he wants us to splash out to get the economy moving.
His recommendation that we refrain from building up cash savings – which generate little income due to historically low interest rates – is hypocritical, confusing and contradictory to previous advice to save every penny.
Mr Bean should be cajoling the British public to move from the red into the black and I agree with those who say that banks should be legally obliged to hold sufficient reserves for all their loans.
His advice is irresponsible in light of the swingeing public sector cuts which are forecast to herald the loss of 725,000 jobs over the next five years. It is also dangerous when applied to the millions of SMEs like ourselves who constitute the lifeblood of the economy – employing over 13 million people and accounting for 51% of UK GDP.
What message does urging consumers to spend more give to small businesses constantly seeking to innovate while staying lean?
What message does this give to small businesses constantly seeking to innovate while staying lean, and working even harder in this tough financial climate to keep our valued teams?
Amid warnings of a double-dip recession, a high level of uncertainly and a low level of confidence abounds – with some economists predicting another ‘dip’ and forecasting that we won’t start to claw our way out of the recession until 2013.
Mr Bean’s nonsense also flies in the face of proper financial planning for critical things such as pensions, which are posing a major worry for SMEs with the retirement age increasing coupled with pension funds’ low investment returns.
While as a manager of a third-generation family-run business I would dearly love for consumers and businesses the breadth and depth of the UK to spark a Fracino coffee machine buying frenzy, the after effects would undoubtedly leave a bitter taste.
Hardly any wonder that there’s been resignation calls for Mr Bean to become a ’has been’.
