Britain’s Goldilocks moment has arrived in the nick of time
Not too hot, and not too cold. It’s time for the three bears to move over and take the porridge with them, because the temperature of the UK economy points to a Goldilocks moment arriving just in the nick of time.
A low-inflation fairy tale has come to the aid of a nation grappling with a grim Brexit nightmare.
The Office for National Statistics reported last week that inflation fell to 1.7 per cent in August, down from 2.1 per cent in July. It is the lowest rate of inflation since late 2016.
Ian Stewart, chief economist at Deloitte, said that “sharply lower inflation is great news for the UK economy”. It’s proof that, despite all of the uncertainty of the last three years, the UK economy has been the gift that has resolutely kept on giving.
It’s not missed on many in business that if the UK wasn’t facing the political turmoil of Brexit, the economy would be flying, with inflation under control, interest rates at historic lows, and employment at historic highs.
But the “what ifs” are conjecture, while the “what next” will have enormous consequences for the livelihoods of people and the fortunes of business. And whether you see Brexit as the ultimate shot in the foot or the heroic shot on goal, one thing is for certain: we all need to be ready for change.
Given the daily diet of doom, you’d be forgiven for believing that we were deep in the transition into Brexit Britain. But right now, we haven’t even begun day one of life outside of the European Union. We simply don’t know what it means, and that makes it difficult to prepare for.
In an attempt to address this, the government has launched the most expensive public advertising campaign since the Second World War, aimed at convincing businesses to fill the economic sandbags and shine the commercial searchlights on global trade.
Since its launch in early September, “Get ready for Brexit” has been the advertising message donning billboards and broadsheets alike. But are we listening? The government’s own research shows that only 50 per cent of Britons think it’s likely the UK will even leave on 31 October.
If you only half believe in something, it begs the question how likely are you to prepare? And for the government, this is more than a moot point. It needs businesses to address Brexit readiness with a sense of urgency for a commercial world that might feel very different, very quickly.
Instead, the business world appears to be despairing, despondent, dismissing of the mixed political signals, and wishing that it would all go away – something that the Bank of England euphemistically describes as the impact of “Brexit-related uncertainties”. The cost of not being prepared could be a rapidly slowing economy. But that hasn’t happened yet.
For this reason, politics is no longer somewhere else, it is at the heart of the boardroom – and if you’re in business, you need to wake up to the fact. It’s volatile, uncertain, and catching many off guard. And as much as you might yearn for personal certainty, you can’t hide from the consequences of this type of all-encompassing emotional change.
But if you visit gov.uk, you’ll see none of this. The questions on Brexit preparations appear disarmingly rational and reasonable: do you export to the EU, employ its nationals, or hold its data? Of course, the answers to these queries might lead to some of the organisational changes that are needed, but what they don’t prepare businesses for is the shift in mindset required to master the unknown.
After all, fortune favours the prepared mind. And while much has been done to dismiss positivity within political circles this summer, business in general (and entrepreneurs in particular) know just how important mindset is in overcoming challenges.
In spite of all of the turmoil, the UK and its reputation for great business continues to flourish. For the most part – and despite the headlines – we have won through as a high-functioning economy and the most successful destination for inward investment in Europe.
But things change, and with it the reputation of nations rise and fall. It was the US investor Warren Buffet who said “It takes 20 years to build a reputation and five minutes to destroy it.”
Our reputation could be undone if the world sees us as unprepared for the very changes that many asked for.
And as last week’s €5bn tech investment announcement by the French government shows, many want what Britain has. In this case, our mantle as Europe’s tech leader.
As the three bears might tell you, “Someone’s been eating my porridge” is never a happy refrain.
Main image: Getty