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Letter From The UK: Good News Is Not Newsworthy

Letter from the UK

Ever since Great Britain voted to leave the European Union last June, the country has been riven with dissent as both sides of the argument have become increasingly nasty. It is rare for this country to be so divided. We are supposed to be a United Kingdom but the cracks are beginning to show with Scotland being especially tiresome and annoying.

Although they cannot change the will of the people, a couple of wealthy folk whose finances will likely suffer when we leave, have taken the UK Government to law to get their own way.

Even the self-aggrandizing, discredited former Prime Minister, Tony Blair, is trying to get the country to backtrack. It is very sad that vested interests consider themselves above the nation.

The Media

Needless to say the media loves all this. There’s nothing like a bit of strife to get the juices flowing at the TV stations. Doom and gloom have been the order of the day. The economy is going to go down faster than Justin Bieber’s career, apparently. We are all going to go back to a lifestyle equivalent of the Middle Ages. We will live in hovels and eat tree bark while ebullient, healthy European nationals look across the English Channel at us and laugh caustically at our folly.

But Wait . . .

In fact, our economy is doing rather well and certainly better than many European nations. In particular, the UK new car market achieved yet another record year in 2016, with annual new vehicle registrations climbing for the fifth year in a row to almost 2.7 million.

Further, UK engine manufacturing rose by twenty percent in November, with 250,879 units produced – the highest on record. Overall for the year, in the domestic market only, production was over one million units. There has also been an up-turn in the production of small commercial vehicles, described as vans in the UK.

Not bad for a so-called broken economy.

Overall, the British economic growth held up better than expected immediately after the Brexit vote, particularly as it regards consumer spending and services. For 2016 as a whole, growth now looks likely to average around two percent Gross Domestic Product.

In September of 2016, Jaguar Land Rover’s Castle Bromwich plant began production of the Jaguar XE. In order to properly build the car, Jaguar Land Rover committed to a state-of-the art aluminum body shop – the largest single investment in the history of the Castle Bromwich plant. Other investments included a new blanker line and Aida press line. The automaker continues to emphasize their commitment to both the Birmingham plant and the greater scope of British manufacturing. Jaguar Land Rover’s West Midlands manufacturing operations have been instrumental in employing a workforce of 3,000 at the plant. Over the past five years, Jaguar Land Rover has doubled sales and employment, more than tripled turnover, and invested over £12 billion in new product creation and capital expenditure. Photo: Jaguar Land Rover.

Getting It Wrong. Again.

In the same way that political polls continually get it terribly wrong (witness your presidential elections) so economic forecasters have slipped up here too. It seems to me that economists are rarely right. I believe their thinking is based on some sort of shamanic ritual using bones. There isn’t an algorithm available that can second-guess the actions of this volatile world.

Our very own Bank of England has quite rightly come under criticism for predicting a dramatic slowdown in the UK’s economy in the event of a vote for Brexit. How wrong can you be? Remember, these are the people who run our finances. They are supposed to manage the money. Not so expert after all then? Why should we listen to them at all? Ironically, the former Governor of the BoE and a guy who really knows his economics, Mervyn King, is very up-beat about Brexit.

Maybe he should come back?

The reality is that their predictions were totally contrary to the evidence, and our economy has bounced back strongly and remains one of the best performing in the developed world. The present Governor of the Bank of England has been attacked by politicians for predicting a dramatic slowdown in growth if the country voted to leave the EU.

Bank of England
Bank of England via Creative Commons.

Future Prospects

The truth is, nobody can predict the future. There are simply too many variables which is why pollsters so often get it wrong.

Right now, the UK does not have an economic problem, yet still – still – the doom-mongers keep predicting the worst for 2017. Who Knows? This may well be so. We have not yet left the EU, but considerable auto price rises are predicted for this year.

The UK car market, we are told, could see a nine percent sales dip in 2017 as Britain’s re-negotiations with Europe damage consumer and manufacturer confidence.

Future Considerations

Of course Britain is faced with numerous challenges in renegotiating trade agreements with the European Union, and with the fifty other countries with which it has similar arrangements. It is going to be a rocky road but all parties surely have a vested interest in making a good deal. Certainly there are some European leaders who are throwing their toys out of the buggy because the British won’t toe the European line, but it is the business market that must have the final say, not dogmatic politicians.

Why can we not enjoy some good news for a change? Why is it always necessary for politicians and the media to take a pessimistic line and project negative vibes out into the world like the Wicked Witch of the West?

Right now, the UK economy is in decent shape. Let’s just celebrate that for once. Certainly, our economy could go to hell in a handcart next week but that is just another bridge we will have to cross when – and if – the worst happens. Maybe it won’t.

Geoff Maxted is a motoring writer, photographer, and author of our Letter From The UK series. Follow his work on Twitter: @DriveWrite

Cover Photo: Silentpilot.