Friday, January 28, 2011

Are they at all surprised?

UK consumer confidence, we are told has suffered an "astonishing collapse" with an eight-point plunge in the most closely-watched barometer of consumer confidence.

This is the GfK NOP Social Research index of consumer confidence, a survey of 2,000 people, conducted on behalf of the EU commission. It tumbled eight points in January to -29, the sharpest fall since 1992 and the lowest reading in 22 months, "hit by high prices, a rise in value-added tax and looming public spending cuts."

The survey was conducted earlier this month, before official figures had indicated that the economy had shrunk in the final quarter of 2010. Separately, a survey from the Confederation of British Industry reported that sales growth on the high street slowed this month, as expected, after spiking ahead of the VAT increase.

Straight out of the department of the trite and superficial, The Daily Telegraph says these findings "will prompt more questions as to whether the coalition risks tipping the economy back into recession through its programme of tax rises and spending cuts to reduce the budget deficit."

Not withstanding that a goodly few might raise their eyebrows at the claim that the recession ever ended, since there aren't any "cuts" and the Cleggerons are simply shifting increased expenditure from general categories to debt repayment, can we at least please stop talking about reducing the deficit?