Drat and double drat as Dick Dastardly used to say. Or should that be dip and double-dip. A Deloitte survey has just revealed that confidence has reached an 18 month low among CFOs in the City, and that more than a third of those questioned believed that the UK was heading for a double-dip recession.
Finance chiefs are not paid to be cheerful (well not until they become CEOs and are magically transformed into over optimistic flag waving cheerleaders for their businesses) so for them to be so pessimistic is clearly par for the course. But there is at best an eerie silence surrounding the economy at the moment as UK plc waits with bated breath for the comprehensive spending review to unveil its conclusions on October 20th.
There is even a sense within the coalition government that maybe they have managed expectations too well, and Whitehall is now echoing to the sound of ministers furiously back peddling and letting it be known that these cuts may not be as bad as feared, or maybe scaled back if the economy starts tanking again.
Then you have Philip Green saying that the Government is rubbish at buying stuff and could save billions just by better procurement. Great stuff, until you realise that Government buys from the private sector and these “efficiency gains” are actually cuts by another name.
We all recognise that the public sector is living beyond its means, and that spending has to be reined back now to avoid more serious austerity in the future. However the necessary initiatives to help smaller businesses take up the slack are conspicuous by their absence.
Economies feed off of confidence, and this is a commodity that is in very short supply at the moment. It is particularly frustrating as many businesses are having a good year, and in normal circumstance would probably be planning for further growth. Now all I hear is “well let’s just wait and see how the cuts affect us.”
For what it is worth, most of the evidence I have come across so far is pointing to the fact that we will probably avoid a double dip. However there is a danger that it probably won’t seem like it, which to my mind is the worst of all worlds.