If you like things Retro it’s difficult to see what else to add to the mix in the UK Economy at the moment other than double-digit interest rates and no membership of the European Union if you fancy a taste of the 1970s.
Not since the time of the Conservative government of the mid-1970s have we had such a heady mix of political turmoil, party-political in-fighting, European dis-harmony and economic disruption.
The sad news today of British Steel’s decline into insolvency was an ever-present theme of the late 20th Century and the blame squarely placed on the rise of the Chinese economy and the UK’s inability to compete in the face of burgeoning materials prices and fractured labour relations.
I’m not sure we should be surprised at the similarities. This seems so much like a typical type of recession gradually falling into sharper focus before our eyes.
Perhaps there are too few people around in positions of power to recall those days when we experienced a recession every 7 years or so. It used to be almost symbolic of the UK economy that it reset itself from time to time with almost metronomic regularity and emerged afterwards seemingly stronger and more resilient from the experience.
At some point ahead of the crash of 2008, the metronome must have broken and when the recession arrived it was like the cumulative effect of random waves rolling simultaneously upon a beach in a tsunami of economic disruption. Perhaps we had become complacent and failed to recognise the typical signs of impending calamity but what followed the crash of 2008 resulted in the sweeping away of our collective experience of what a normal economy feels like.
When it’s your business to operate permanently on the twilight side of the economy, assisting other individuals and businesses that are in financial difficulty, you sense the ebb and flow of things more intensely. At no time since 2008 have I thought that the economy of the UK was anywhere near having been repaired and the strange anomalies of this particular post-recession re-set have put me constantly in mind of a stopped watch where the owner may have wound it up (“insert battery here”) but forgotten to adjust the date. It is, effectively, permanently wrong; not even correct twice a day/month/year which it may have been when it was stopped. Since 2008 we have been living in a dystopic representation of a post-recessive economy when the clearer image is actually an economic fractal.
If the UK is on the edge of a classical recession then all of the current bad economic news is typical. It may be that the contrast between our pre-recession and in-recession state and the means by which economists measure the change are more difficult to assess because we live in new times of excessive information, false news and white noise but I firmly believe that we are already beyond the tipping point. I’m no Jonah. I believe that economically we have effectively already gone Back to the Future!
Charles Brook, Partner at Poppleton & Appleby Licensed Insolvency Practitioners comments on British Steel’s decline