This is rather like the babysitter announcing ‘I think the kids are going to fall down the stairs’ as they stand aside whilst watching your offspring teeter precariously on the top step.
Behold the quality of tenure for which we pay Andrew Bailey £575,000 a year and where we seem to have gone from the unreliable boyfriend of Mark Carney, the hysterical harbinger of doom, to Andrew ‘close the door after the horse has bolted’ Bailey.
We’d perhaps be better off just sticking some random names in a hat and picking one out as the Bank’s Governor – Gladys Jones, 55, a dinner lady from Laindon, would surely do a more impressive job? I’d suggest a role-swap but fear that the schoolchildren of Basildon would starve to death as Bailey, adorned in hairnet and white wellies, bemoans that ‘someone’ had forgotten to turn the oven on.
‘Recession’ is a sinister word. I’ve lived through three actual economic downturns, two in my working life, and recall them as not being all that nice. Soaring unemployment, shuttered shops, financial hardship, bankruptcies, home repossessions, doomsday sentiment all around and further proliferated by political desperation and supercharged unions bringing the country to a halt as they insist on pie-in-the-sky wage settlements to compensate for the effect of the economic climate.
But actually, recession is just a technical term. It means ‘two consecutive quarters of negative GDP growth’. Let’s be honest, even though the most recent GDP numbers show a Q2 decline of 0.1% did you really notice? And if that stat is repeated in Q3 would the statistic in and of itself impact you in any way? No, of course not.
No, ‘recession’ is a hyped prospect but has an impact nonetheless because it is weaponised by a lustful media as something to scare us. Scary stories and sensationalist headlines do sell.
By way of example, in 2008 as some bank traders were throwing themselves out of windows and others were scrambling to find boxes with which to pack their family photos as they were unceremoniously kicked from their offices, we watched the news media whip things up as much as they possibly could. Broadcast journalists in particular, seemed to revel in the impending financial meltdown and added gallons of kerosine to the smouldering fire by speculating that all of the banks would go bust and that world economies would collapse.
In particular they rounded on Northern Rock as vulnerable.
Within 24 hours of speculating that Northern Rock would go to the wall, lo and behold there were news helicopters circling Northern Rock branches accompanied by drooling journalists on the ground claiming amazement at the crowds of customers now snaking around the high streets queuing to withdraw all their money – the queues that they themselves had prompted. And which immediately caused more panic and, inevitably, the collapse of said bank. The media are often very accomplished at bringing about such self-fulfilling prophecies.
As we near 2023, this will happen again. A ravenous media chock-full of editors that are all wired to outdo each other, will tweak, exaggerate and hype any statistical morsel that they can and will exploit all the crank guests and commentators possible in order to prophecise that Britain is set to burn to the ground financially.
The property sector plays an important part in all of this because it’s widely recognised, even by the most intellectually challenged of politicians, that the housing market’s health is linked to the buoyancy of the wider economy. This is why the then Chancellor Rishi Sunak sought to prop up the property market during the pandemic with a stamp duty holiday, not because he has a fondness for estate agents but because positivity amongst homeowners translates to consumer spending and a generally positive sentiment.
Our duty now in the face of the sensationalism that we are about to witness is to remain positive about our market and not to allow doom-monkeys to entice us to contribute to negative sentiment further by talking the market down.
Because for every real estate, consumer or business investment decision that is delayed or cancelled today because of recessionary ‘fears’, for every acquiescence toward house prices dropping, for every supposition around unemployment rising etc etc, there will be ten more people that listen and then follow that lead by sitting on the fence tomorrow.
The more people that are spooked by simple speculation albeit based just entirely on that technical data point that I referred to earlier, the less money will be spent and accordingly, the more likely it is that we do indeed bring about the downturn ourselves based upon our own hyperbole. We will literally talk ourselves poorer by second-guessing economic hardship and abstaining from economic activity accordingly. Doh! As someone once said.
The self-fulfilling prophecy of 2008 beckons once again and we face the same old danger of forcing ourselves into a proper downturn, totally and completely unnecessarily. That is, only if we ourselves allow it.
Russell Quirk is co-founder of ProperPR.