OK, that’s it. I’m calling the bottom of the global slump.
It ended on Thursday 9 April 2009 around noon, when the BoE decided to hold interest rates at a negligible 0.5%.
Retail sales in the UK are up; so are house prices. Jobless figures have stabilised although they’re still high (and of course their true magnitude is disguised by the vast numbers classified as ‘incapacity benefit’.) People have started to realise just what poor value for money the UK receives from its early-retiring, index-link pensioned, job-protected and home-by-5:30 civil servants and have started making noises about cutting Britain’s bloated public sector down to a decent size.
Low interest rates, low inflation, and a weak pound will boost exports, and a new government (surely Brown can’t recover?) will put Britain back on track. The Big Fear signalled by bond yield rises last year – that the UK was in danger of defaulting on its debt like some third-world banana republic – has subsided.
But most of all, what matters is the mood on the street. Central London seems chirpier somehow; people I know are getting jobs; Americans seem more optimistic than – well, they do normally. Europeans are cheerfully striking this summer as normal; the Chinese are taking the pain of sub-8%, India is plunging into its glorious elections, the political elite on the streets of Bangkok have retreated and factories worldwide are whirring back to life as the stocks they’d survived on start to sell out.
Of course, problems remain. Thanks to Brown, Britain’s public finances are a complete basket-case, as always happens under Labour governments. And Obama – what happened to you? He’s missed his moment. This could have been the quarter that defined his presidency, and instead he’s coming out of it looking like a damp dishcloth, farming out the stimulus to Congress instead of writing it in the Oval Office himself.
Italy remains in its economic death spiral, Sarkozy isn’t making much change in France, the empty construction sites amid a sea of concrete I saw last week testify to Spain’s overbuilding, and Germany is – well, Germany. And I have to keep checking the satellites to make sure Iceland hasn’t actually sunk beneath the waves.
Across the Atlantic, Latin America’s saunter towards towards stability is being sputtered by the maniac in Venezuela and the tribalism in the Andes… and, to a less understood but far greater extent, the descent of amazing Mexico into a narco-state. (And how, with a huge neighbour hungry for what you’re selling, is this stoppable?)
Israel’s system of proportional representation has just delivered yet another ineffectual government, in thrall to militants with no interest in peace. And the societies of our supposed friends, Saudi Arabia and Pakistan, are shot through with hatred and extremism from a toxic mix of underemployment, miseducation, and too many young males with a grudge. Across the world, religionistas continue to spread their corrosive views, with beautiful Indonesia walking the line between the tolerance I saw years ago and the bile of ethnic hate.
But Iraq is cooling. Afghanistan may settle. And the USA shows signs of engaging properly with the vast, educated, and culturally advanced nation of Iran.
And that’s why I’m calling it. There are a lot of indicators, but in the macro view the positives seem to outpunch the negatives for the first time in two years. Let’s hope…