Attention Returns to the Dismal Economy

The Olympics are barely over yet the talk in the media is already returning to Britain’s dismal economic news. The Bank of England has predicted that growth for this year will be non-existent; we also know that the UK is still in the recession it entered earlier this year. The bizarre thing is, the UK has somehow managed to add jobs. This is confusing economists and politicians alike, the deputy governor of the Bank of England, Charlie Bean, said that the bank was completely confused by the figures and further reviews would need to be conducted.

What we do know is that half of the jobs created were in London and a significant proportion of the jobs were self-employed. Temporary jobs created thanks to the Olympics are expected to take up a significant proportion of the London-based job growth. The description of “self-employed” disguises what most of those jobs really are, these aren’t entrepreneurs, many have been hired on zero hour contracts. Basically these contracts stipulate that you have a job, but it’s not regular; basically each day you will receive a message from your employer to tell you whether or not you will be needed for that day or not. (I don’t fully understand why their classed as self-employed either).

Yet if we leave aside the surprising, if bizarre, job figures, the picture of the economy is bleak. The recession will continue for the time being, but it will remain relatively mild.

There was a surprise outburst from London’s mayor, Boris Johnson; in an interview with the London Evening Standard he attacked David Cameron and the “institutional inertia of government.” In his interview he said “This is the time to be ambitious about London and what it can do for Britain. One of the ways of doing that would be to commit to further infrastructure – Crossrail 2, more river crossings, a massive house building programme for the city… The government needs to stop pussyfooting around.” I find myself in the unusual position of completely agreeing with Boris, I do believe that investment in infrastructure is exactly what this country needs, after all a poor construction sector is the primary cause of this current recession. Whatever they decide to do, I would encourage Cameron and Osborne to follow Boris’ advice on this issue.