Ed Milliband in his speech to the Labour Party Conference spoke of ‘good’ and ‘bad’ companies apparently judging them on whether they were community minded or not. It reminded me of a question I am often asked ‘why don’t businesses contribute more’. My stock answer? ‘What, apart from providing over 300,000 jobs in the county, paying many tens of millions of pounds in business rates and taxes not to mention the support that many give to local charities, schools, etc.’ I could add that without the many successful businesses we have in this country people would not be able to pay their mortgages, nobody would meet the cost of health care and the transport system would grind to a halt. I could have course say a great deal more but usually by that point I have become more than a little ‘tetchy’ and further comment might become somewhat less measured in tone and content.
Whether Mr Milliband and his friends like it or not businesses are the wealth creators and should be respected as such. Certainly if you dig very deep you will find some that fall short of the high standards most of us set but, frankly, however you legislate you will have little impact on them. As I have said many times in this column the country needs business men and women many of whom are prepared to risk their homes, reputation and a great deal more to build and grow the organisations that are essential to the wellbeing of us all. It should also be said that by and large these businesses are created at no expense to the Government and if the people that have invested in them reap rich rewards good luck to them, sadly of course many do not.
What we need from politicians is not the all too frequent gibes but their genuine, well considered support by creating an economic environment that enables us all to prosper. Regardless of whom it might be, or what party they represent, it is my view that we are all more than a little tired of their posturing and apparent unwillingness to stick their heads over the parapet in an effort to find solutions to what currently ails us all. I think it was Tony Blair that commented that unless politicians are in government there is little they can do which may be true but, surely, a politician without conviction is even less use whether in government or not.
All this is important because currently politicians seem to focus more effort on attaching blame and opprobrium to their opponents than they do on finding solutions. Frankly I do not care who said what to whom or who is to blame for the situation we find ourselves in, I want to know who is going to come up with the solutions that are required to move us forward. I recognise that not all suggestions will work but the inert nature of the current debate is not going to get us anywhere either.
If they are struggling for ideas how about extending the NI holiday for start-ups to cover places like Hertfordshire, it might just increase the number of jobs available and result in even more in taxation. How about speeding up the planning system, there has been much talk on this subject but I remain to be convinced that the proposals currently being discussed will make much difference.
Perhaps, all the new employment legislation that is in the pipe line could be consigned to ‘the long grass’. I feel sure that with a little thought a great many more ideas could be brought forward without undermining government spending plans and, more importantly, that just might restore confidence in both our economy and our politicians. Oh and by the way Mr Milliband, I work on the presumption that all businesses are good businesses unless and until they are proved to be otherwise.
Monday, 3 October 2011
Tuesday, 30 August 2011
Recent history has been littered with schemes...drowned in a sea of mediocrity
I doubt whether many employers will turn their noses up at the government’s contention that there is a need to improve workplace skills and I am certainly not going to join them even if they actually exist. Equally I will not be enrolling into that happy band of people who unquestioningly accept pronouncements, usually put forward by Ministers and their obedient servants, to the effect that qualification alone is the answer to our prayers. Indeed where it is due I intend to be as critical of this government as I was of their predecessors.
Whilst welcoming the government’s commitment to support an increase in skills within the UK workforce I have reservations as to whether the ‘new dawn’ brings with it any more realism than that which accompanied past efforts to do so. Without wishing to be seen to be too curmudgeonly it seems to me that recent history has been littered with schemes posing as the latest panacea which, ultimately, have been drowned in a sea of mediocrity.
Why, despite the enormous investment of public money in recent years, have so many schemes failed to produce little more than short term benefits rather than answer the challenges of a competitive global environment? Could it have been that providers were encouraged by a government obsessed with sound bytes to focus on delivering numbers rather than providing a quality product? Could it be that employers, seduced by the promise of fully funded training, failed to demand the higher standards required to ensure that the training on offer satisfied the needs of their business? Could it be that the whole exercise was about funding and bits of paper? Could it be that many of the schemes were simply designed to reduce the level of the political fallout attached to youth unemployment?
Harsh? Unfair? Maybe, but not entirely I think, but are politicians alone to blame? Not entirely we all have to take some of the rap. In truth many of the schemes were appropriate and well thought out, the fault lies within the execution with the result that many people have regarded some of the qualifications arising from them with a degree of disdain rather than take the trouble to understand how they might contribute to their business plans? How many had been content, simply because they were funded, to take them at face value rather than take the trouble to fully read the curriculum to understand what exactly was involved? The scheme was fully funded, the member of staff got a certificate and the provider got paid. Oh! And the politicians were able to boast about yet another contribution to the wellbeing of mankind.
How many of us have really taken the trouble to understand some of the qualifications on offer and the benefits they offer. I recently read the contents of an NVQ Level 3 in Business Administration and will no longer question its efficacy or usefulness. Properly assessed it is a challenging and comprehensive qualification. Whilst accepting that not all providers have engaged in shortcuts or, indeed, all employers have failed to be sufficiently demanding, too few have been as diligent as they might have been. The result? Despite the merits of various qualifications they have ultimately delivered a great deal less than should have been expected.
The solution? Government should introduce a time served system in which higher standards are sought thus reducing the opportunity for shortcuts to be taken. Employers should be more effectively engaged to ensure that training (particularly that which is funded by Government) actually fits the needs of their business. Finally, we all need to understand that training individuals is not simply a philanthropic exercise, unless we treat it as having real value it will regarded as having none.
It is all too easy to question the credibility of vocational qualifications but the truth is that they are important to the future development of our businesses and the people who work in them. Qualifications alone are not the answer, nonetheless, we all need to do more to ensure that they are challenging and appropriate. We all need to value and support the development of higher level skills, if we do they will be held in higher regard by those achieving them. They in turn will make a greater contribution to the businesses for which they work.
Whilst welcoming the government’s commitment to support an increase in skills within the UK workforce I have reservations as to whether the ‘new dawn’ brings with it any more realism than that which accompanied past efforts to do so. Without wishing to be seen to be too curmudgeonly it seems to me that recent history has been littered with schemes posing as the latest panacea which, ultimately, have been drowned in a sea of mediocrity.
Why, despite the enormous investment of public money in recent years, have so many schemes failed to produce little more than short term benefits rather than answer the challenges of a competitive global environment? Could it have been that providers were encouraged by a government obsessed with sound bytes to focus on delivering numbers rather than providing a quality product? Could it be that employers, seduced by the promise of fully funded training, failed to demand the higher standards required to ensure that the training on offer satisfied the needs of their business? Could it be that the whole exercise was about funding and bits of paper? Could it be that many of the schemes were simply designed to reduce the level of the political fallout attached to youth unemployment?
Harsh? Unfair? Maybe, but not entirely I think, but are politicians alone to blame? Not entirely we all have to take some of the rap. In truth many of the schemes were appropriate and well thought out, the fault lies within the execution with the result that many people have regarded some of the qualifications arising from them with a degree of disdain rather than take the trouble to understand how they might contribute to their business plans? How many had been content, simply because they were funded, to take them at face value rather than take the trouble to fully read the curriculum to understand what exactly was involved? The scheme was fully funded, the member of staff got a certificate and the provider got paid. Oh! And the politicians were able to boast about yet another contribution to the wellbeing of mankind.
How many of us have really taken the trouble to understand some of the qualifications on offer and the benefits they offer. I recently read the contents of an NVQ Level 3 in Business Administration and will no longer question its efficacy or usefulness. Properly assessed it is a challenging and comprehensive qualification. Whilst accepting that not all providers have engaged in shortcuts or, indeed, all employers have failed to be sufficiently demanding, too few have been as diligent as they might have been. The result? Despite the merits of various qualifications they have ultimately delivered a great deal less than should have been expected.
The solution? Government should introduce a time served system in which higher standards are sought thus reducing the opportunity for shortcuts to be taken. Employers should be more effectively engaged to ensure that training (particularly that which is funded by Government) actually fits the needs of their business. Finally, we all need to understand that training individuals is not simply a philanthropic exercise, unless we treat it as having real value it will regarded as having none.
It is all too easy to question the credibility of vocational qualifications but the truth is that they are important to the future development of our businesses and the people who work in them. Qualifications alone are not the answer, nonetheless, we all need to do more to ensure that they are challenging and appropriate. We all need to value and support the development of higher level skills, if we do they will be held in higher regard by those achieving them. They in turn will make a greater contribution to the businesses for which they work.
Thursday, 11 August 2011
Long term solutions not blame
The recent riots in London and elsewhere have, rightly, attracted enormous condemnation of those concerned in the looting, arson, theft and other forms criminality. Whatever challenges, real or imagined, the participants face there can be no conceivable excuse for their actions and I for one hope that the courts treat those that come before them in an exemplary fashion. The indiscriminate and unprovoked attacks on people in their homes, and while working in their businesses, has been truly sickening.
Apart from having to witness a variety of atrocious occurrences I guess the next thing we will be forced to endure will be the in-fighting amongst politicians of all parties whose horizons do not go beyond the next election. It didn’t take long to start and, no doubt, the bickering will grow in intensity during the coming weeks and months. So and so didn’t come back from their holidays soon enough; the cuts and withdrawal of benefits/EMA/community support were bound to result in these poor disenfranchised souls feeling the need to steal the latest 55” TV/i-pad/i-pod or whatever else took their fancy. Before any attempt is made to find solutions the game will largely be about ensuring that no blame attaches to them and, wherever possible, as much mud as possible is slung at the other side. The truth is that these examples of appalling behaviour were not caused by politicians of any party the responsibility lies fairly and squarely upon the shoulders of those who took part.
Despite recognising that politicians are not directly to blame it is clear that they do have a role in developing strategies that will make it less likely that these riots recur. The job to be done is enormous and will not be concluded following the uncovering of some form of miraculous ‘silver bullet’ nor, in my view, will solutions be found in committing the police to attending yet more community meetings.
My Grandmother was fond of reminding me that ‘the devil makes work for idle hands’ so maybe the starting point should be to find these people work. The flaw in that idea, though, is that most seem to be unemployable, unable or unwilling to speak in understandable English and largely of the view that the world owes them a living. On the latter point the world owes them nothing they are not prepared to work for and it is most certainly not incumbent on employers to conform to their strange twisted view of life.
Are they lost causes? Some may be but hopefully most can be redeemed, although this won’t happen if we excuse their every misdemeanour. In the meantime we desperately need to be working on those who are likely to follow them to ensure that they develop respect for themselves and others.
In the short term we need the government to do all it can to support all the businesses affected to get back on their feet and their staff back into work, more profound solutions will take a great deal longer.
Apart from having to witness a variety of atrocious occurrences I guess the next thing we will be forced to endure will be the in-fighting amongst politicians of all parties whose horizons do not go beyond the next election. It didn’t take long to start and, no doubt, the bickering will grow in intensity during the coming weeks and months. So and so didn’t come back from their holidays soon enough; the cuts and withdrawal of benefits/EMA/community support were bound to result in these poor disenfranchised souls feeling the need to steal the latest 55” TV/i-pad/i-pod or whatever else took their fancy. Before any attempt is made to find solutions the game will largely be about ensuring that no blame attaches to them and, wherever possible, as much mud as possible is slung at the other side. The truth is that these examples of appalling behaviour were not caused by politicians of any party the responsibility lies fairly and squarely upon the shoulders of those who took part.
Despite recognising that politicians are not directly to blame it is clear that they do have a role in developing strategies that will make it less likely that these riots recur. The job to be done is enormous and will not be concluded following the uncovering of some form of miraculous ‘silver bullet’ nor, in my view, will solutions be found in committing the police to attending yet more community meetings.
My Grandmother was fond of reminding me that ‘the devil makes work for idle hands’ so maybe the starting point should be to find these people work. The flaw in that idea, though, is that most seem to be unemployable, unable or unwilling to speak in understandable English and largely of the view that the world owes them a living. On the latter point the world owes them nothing they are not prepared to work for and it is most certainly not incumbent on employers to conform to their strange twisted view of life.
Are they lost causes? Some may be but hopefully most can be redeemed, although this won’t happen if we excuse their every misdemeanour. In the meantime we desperately need to be working on those who are likely to follow them to ensure that they develop respect for themselves and others.
In the short term we need the government to do all it can to support all the businesses affected to get back on their feet and their staff back into work, more profound solutions will take a great deal longer.
Thursday, 21 July 2011
Business Optimism Building
At a time, when it seems the only issue of importance to our national politicians and press corps is the so called ‘hacking scandal’, I was delighted to take delivery of a report outlining the results of survey on SME views of the Hertfordshire economy. The report had been undertaken by Rayner Essex and we at the Chamber welcomed the opportunity to be associated with it.
As one sets out on a survey there is often a feeling of trepidation. Will we get the response we expect? Will it support what we have been saying about the economy and the views of the SME community? Or, will it simply show that we have absolutely no idea what’s going on?
The Chamber has been saying for some time now that the economy in Hertfordshire, although challenging, was showing signs of improvement so it was great to hear that 65% of those polled expect to increase turnover during the next 12 months and that only 10% were expecting a decline, combined with 58% expecting an increase in profitability this was, indeed, good news.
Although expectations in relation to employment did not translate directly it was also encouraging to note that 33% expected to increase headcount. Given the number of employers we meet who are reporting difficulties filling some of the vacancies they already have the future is, perhaps, not quite as gloomy as some pundits would have us believe.
Other areas explored in the survey concerned business attitudes to the support they receive from banks and local authorities. As one might have speculated the positive nature of some of the other responses was not present here. Only 27% considered their banks to be supportive whilst 61% believed them to be passive or disinterested at best. 52% thought local councils were unsupportive of local businesses. Despite the presence of a few honourable exceptions neither of these findings was very surprising and reinforces the view that a great deal more effort needs to be made if businesses are to be convinced.
Although one might be forgiven for believing that nothing more important exists than the problems of the chattering classes as they engage in their game of buck passing and self flagellation there are other issues that need our attention. We will all have our ideas of what is more important but for me the economy and its impact on businesses, jobs and our standard of living is far more important. The findings of this survey demonstrate clearly that the economy in Hertfordshire is slowly going in the right direction but I think we all know that much more needs to be done.
Full details of the survey can be found on the Chamber website www.hertschamber.com
As one sets out on a survey there is often a feeling of trepidation. Will we get the response we expect? Will it support what we have been saying about the economy and the views of the SME community? Or, will it simply show that we have absolutely no idea what’s going on?
The Chamber has been saying for some time now that the economy in Hertfordshire, although challenging, was showing signs of improvement so it was great to hear that 65% of those polled expect to increase turnover during the next 12 months and that only 10% were expecting a decline, combined with 58% expecting an increase in profitability this was, indeed, good news.
Although expectations in relation to employment did not translate directly it was also encouraging to note that 33% expected to increase headcount. Given the number of employers we meet who are reporting difficulties filling some of the vacancies they already have the future is, perhaps, not quite as gloomy as some pundits would have us believe.
Other areas explored in the survey concerned business attitudes to the support they receive from banks and local authorities. As one might have speculated the positive nature of some of the other responses was not present here. Only 27% considered their banks to be supportive whilst 61% believed them to be passive or disinterested at best. 52% thought local councils were unsupportive of local businesses. Despite the presence of a few honourable exceptions neither of these findings was very surprising and reinforces the view that a great deal more effort needs to be made if businesses are to be convinced.
Although one might be forgiven for believing that nothing more important exists than the problems of the chattering classes as they engage in their game of buck passing and self flagellation there are other issues that need our attention. We will all have our ideas of what is more important but for me the economy and its impact on businesses, jobs and our standard of living is far more important. The findings of this survey demonstrate clearly that the economy in Hertfordshire is slowly going in the right direction but I think we all know that much more needs to be done.
Full details of the survey can be found on the Chamber website www.hertschamber.com
Wednesday, 29 June 2011
London 2012 - To The Point
Like many others my potentially bank busting efforts to get a ticket, just about any ticket, for London 2012 have failed. Am I bothered, well yes actually but I expect I’ll get over it. In the meantime, however, and whilst pondering the injustice of it all, my thoughts have turned towards other questions arising from the process. If, for example, we are all experiencing such hard times how come the offer was oversubscribed so many times over? What has been the impact of so much cash being tied up over the last month or so waiting for the call? And, if the chance to attend the Games has passed so many people by will there be other opportunities arising from them?
Maybe less cash was tied up than we might suppose, perhaps most people were simply gambling on their credit cards not getting ‘maxed out’. We will probably never know but it will be interesting to see if there is any impact on the various economic indicators covering the period when they are published over the next few months. In time, though, what may come to be regarded as more important is whether the games were fully exploited for the benefit of the widest number of people.
Lest anyone should think I am anything other than totally supportive of the Games I would just like to say that, like millions of other people, I am delighted that London won the bid for the 2012 Games and will bathe in the glow of what I am sure will be one of the most memorable events to have occurred in the UK during my lifetime. I am delighted that they are here and, apart from the many social and sporting benefits they will undoubtedly bring, I am convinced that they will also have a significant impact on the country’s economy. Nevertheless I am not blind to the opportunities that may be missed.
I have always thought that the best possible Games legacy would be the raising of peoples aspirations in general and those of young people in particular. Not just as the result of witnessing great sporting achievements but also arising from the tremendous feats involved in constructing the stadia and other facilities on time and largely to budget. With a year to go it is not too late, and maybe plans are already in place, to fully exploit the inspiring stories arising from planning, building and delivering the greatest show on earth.
Does it matter? Yes I think so. At a time when more than ever we need to be competitive raising aspirations and developing a greater understanding of the value of skills is essential. The Games presents a wonderful opportunity to facilitate this, and to promote the benefits of Apprenticeships and other forms of training, whilst demonstrating the ability of people in this country to achieve great things and by showcasing the development of new technologies. I understand perfectly well the need to have pushed on and build facilities without undue constraint or distraction but, given that so much seems to have been delivered ahead of time, might more have been done. Thus far it would seem that more effort still is required to engage young people and their teachers in particular in the non-sporting aspects of the games.
I am convinced that the Games will live long in the memory being right up there with events such as Stevenage FC winning back to back promotions and Saracens winning the Guinness Premiership for the first time (many congratulations to them both). We will, of course, remember and celebrate our sporting winners but I also hope that we will look back and recall how the Games inspired a generation of young people to greater achievements in other aspects of their lives.
Maybe less cash was tied up than we might suppose, perhaps most people were simply gambling on their credit cards not getting ‘maxed out’. We will probably never know but it will be interesting to see if there is any impact on the various economic indicators covering the period when they are published over the next few months. In time, though, what may come to be regarded as more important is whether the games were fully exploited for the benefit of the widest number of people.
Lest anyone should think I am anything other than totally supportive of the Games I would just like to say that, like millions of other people, I am delighted that London won the bid for the 2012 Games and will bathe in the glow of what I am sure will be one of the most memorable events to have occurred in the UK during my lifetime. I am delighted that they are here and, apart from the many social and sporting benefits they will undoubtedly bring, I am convinced that they will also have a significant impact on the country’s economy. Nevertheless I am not blind to the opportunities that may be missed.
I have always thought that the best possible Games legacy would be the raising of peoples aspirations in general and those of young people in particular. Not just as the result of witnessing great sporting achievements but also arising from the tremendous feats involved in constructing the stadia and other facilities on time and largely to budget. With a year to go it is not too late, and maybe plans are already in place, to fully exploit the inspiring stories arising from planning, building and delivering the greatest show on earth.
Does it matter? Yes I think so. At a time when more than ever we need to be competitive raising aspirations and developing a greater understanding of the value of skills is essential. The Games presents a wonderful opportunity to facilitate this, and to promote the benefits of Apprenticeships and other forms of training, whilst demonstrating the ability of people in this country to achieve great things and by showcasing the development of new technologies. I understand perfectly well the need to have pushed on and build facilities without undue constraint or distraction but, given that so much seems to have been delivered ahead of time, might more have been done. Thus far it would seem that more effort still is required to engage young people and their teachers in particular in the non-sporting aspects of the games.
I am convinced that the Games will live long in the memory being right up there with events such as Stevenage FC winning back to back promotions and Saracens winning the Guinness Premiership for the first time (many congratulations to them both). We will, of course, remember and celebrate our sporting winners but I also hope that we will look back and recall how the Games inspired a generation of young people to greater achievements in other aspects of their lives.
Wednesday, 25 May 2011
Businesses Need Support Too!
As the Government calls for business to lead the country out of the economic difficulties we have faced over the past two or three years I am inclined to ask the question ‘can it do it on its own’? Whilst I am absolutely positive that business will give it its best shot I am becoming increasingly concerned that collectively British society needs to do more to help. I know it’s tough out there and, that for perfectly understandable reasons people are concerned about the future, but the truth is we all need to knuckle down and do our bit.
Over the years I have visited parts of the world where the local population would give their eye teeth to be able to enjoy some of the advantages we have. Anyone who has walked the back streets of a Chinese city or parts of Eastern Europe would be staggered at how people eke out a living without complaint and certainly without expectation that someone else will bail them out. Here our default position seems to be that someone else should find a solution for us.
Most business people, particularly those running small businesses, understand that if they are to succeed they will need to do so through their own drive and determination. I am yet to meet a successful business person that has factored in support from government as being key to their growth, nor have I met one that has folded at the first sign of adversity. The fact is that successful people get on with it and make things happen but they need support and encouragement the same as everyone else.
Several times in recent weeks I have heard people snipe at businesses. Whether it be the man in the street, a journalist or Trade Union leader, ‘they are only in it to make money’ seems to be a frequent refrain. It would be easy to respond that any business that does not make money will soon go out of existence and, perhaps more appositely, will not be able to create the jobs we all need to exist. More fundamentally, though, the remark totally misses the point that making money is a by-product and rarely the initial objective. It also fails to recognise that it is the business people who have backed their own judgment and taken the risk.
Of course the people who have supported them should be able to share in their success but at the end of the day it is people with entrepreneurial drive and eye for innovation and hard work who will make the difference. We need to get behind them.
Over the years I have visited parts of the world where the local population would give their eye teeth to be able to enjoy some of the advantages we have. Anyone who has walked the back streets of a Chinese city or parts of Eastern Europe would be staggered at how people eke out a living without complaint and certainly without expectation that someone else will bail them out. Here our default position seems to be that someone else should find a solution for us.
Most business people, particularly those running small businesses, understand that if they are to succeed they will need to do so through their own drive and determination. I am yet to meet a successful business person that has factored in support from government as being key to their growth, nor have I met one that has folded at the first sign of adversity. The fact is that successful people get on with it and make things happen but they need support and encouragement the same as everyone else.
Several times in recent weeks I have heard people snipe at businesses. Whether it be the man in the street, a journalist or Trade Union leader, ‘they are only in it to make money’ seems to be a frequent refrain. It would be easy to respond that any business that does not make money will soon go out of existence and, perhaps more appositely, will not be able to create the jobs we all need to exist. More fundamentally, though, the remark totally misses the point that making money is a by-product and rarely the initial objective. It also fails to recognise that it is the business people who have backed their own judgment and taken the risk.
Of course the people who have supported them should be able to share in their success but at the end of the day it is people with entrepreneurial drive and eye for innovation and hard work who will make the difference. We need to get behind them.
Tuesday, 19 April 2011
Interest Rates – Just go along with the ride
It was good to open my paper this morning to discover that a number of renowned economists had begun to realise what businesses had been telling us for months, a rise in interests rates at the moment would be anything but good news. Businesses who had been speaking to us had not applied any great economic academic ‘know how’ to their thinking just the highly valuable, but all too sadly rare commodity, common sense.
Who would have thought that adding to the costs of people mortgages at a time of economic uncertainty would not have an effect on already fragile growth? Who would believe that raising rates would have an impact on inflation largely caused by increased taxation, rises in the cost of oil and soaring world food prices? Well at least three members of the Bank of England Monetary Policy Committee apparently.
There are occasions when one should ‘doff one’s cap’ to the experts but when they are driven by old fashioned dogma which dictates that when prices rise too fast the only cure is adding to the cost of borrowing they deserve to be castigated. We find ourselves in a world which is very different to the one that used to respond to such a course of action. If proof of that were needed one has only to consider that on a day when Portugal is seeking to be ‘bailed out’ there are also mutterings about the credit rating of the good old USA.
I have no doubt that the world will work its way through this challenging period but it will be made more difficult if we get our strategies wrong. There will certainly be times when it will be essential to stick doggedly to old beliefs but for the time being, and as far as interest rates are concerned, now is the time to hold our nerve and be pragmatic. It might not be a comfortable experience for some members of the MPC but they should just accept that there is little they can do and that they should hold tight and go along with the ride.
Who would have thought that adding to the costs of people mortgages at a time of economic uncertainty would not have an effect on already fragile growth? Who would believe that raising rates would have an impact on inflation largely caused by increased taxation, rises in the cost of oil and soaring world food prices? Well at least three members of the Bank of England Monetary Policy Committee apparently.
There are occasions when one should ‘doff one’s cap’ to the experts but when they are driven by old fashioned dogma which dictates that when prices rise too fast the only cure is adding to the cost of borrowing they deserve to be castigated. We find ourselves in a world which is very different to the one that used to respond to such a course of action. If proof of that were needed one has only to consider that on a day when Portugal is seeking to be ‘bailed out’ there are also mutterings about the credit rating of the good old USA.
I have no doubt that the world will work its way through this challenging period but it will be made more difficult if we get our strategies wrong. There will certainly be times when it will be essential to stick doggedly to old beliefs but for the time being, and as far as interest rates are concerned, now is the time to hold our nerve and be pragmatic. It might not be a comfortable experience for some members of the MPC but they should just accept that there is little they can do and that they should hold tight and go along with the ride.
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