It isn’t hard to predict the reaction of Boris Brexit to the economic growth figure of 0.5 per cent for the fourth quarter of 2017: Yowza! Look at that! Project Fear be damned. Believe in Britain. We’re flying!
Solid, said the BBC, more modestly. Dear old Auntie. It would be an exaggeration to say it has become Brexit Pravda, but describing 0.5 per cent as solid is akin to calling the old Austin Allegro a thoroughly decent car.
For those who’ve never heard of that creature, it was a British built motor that you’ll find prominently featured in many of those books running down the worst of the worst alongside the likes of communist East Germany's Trabant and the Russian Lada.
The figure, which is still subject to revision at a later date, is, it is true, a tad better than the forecast 0.4 per cent.
But while the British economy was formerly driving a decent looking Ford Focus, Brexit Britain traded that in and its coughing and spluttering Allegro has been confined to the global slow lane ever since.
It’s all the more galling given that the rest of the world is testing the speed limit and chuckling as it looks in its rear view mirror. The global economy is enjoying a period of sustained expansion that Britain has opted to eschew.
Evidence of where that coughing and spluttering is hurting can be seen in the insolvency figures, released at the same time as those for GDP growth.
The story they tell will very likely get buried in the really aggressive Brexit Pravdas because it casts a harsh light on where we really are.
Stripping out a “bulk event” the Insolvency Service says was driven by a change to tax rules, underlying corporate insolvencies last year hit 15,112. That puts them at their highest level for four years.
Carillon is set to help with pushing them higher still this year while Brian Johnson, insolvency partner at chartered accountant HW Fisher, said any further interest rate rises could push “Britain’s army of zombie companies – the weak businesses being kept afloat solely by rock bottom interest rates – over the edge.”
The signs, he opined, are not good. Indeed so.
It looks even worse when you consider personal insolvencies. They hit 99,196 in 2017, a rise of 9.4 per cent, which put them at their highest level for three years.
The UK economy might be growing but real wages adjusted for inflation are moving in the other direction. Meanwhile, levels of unsecured debt have been rising at a pace that alarms the Bank of England.
Put together with November’s first interest rate rise in a decade and something was bound to give. And that looks set to continue.
Yes the economy is growing, and a teensy bit faster than the City had expected. But the hard shoulder is beckoning for our Allegro.
It’s still possible to trade it in for something with a little more zip. Trouble is, while Philip Hammond, the driver in Number 11 Downing Street, sometimes seems to understand the rules of the road, he’s got Boris Brexit leading a gang full of unruly five-year-olds playing the role of back seat drivers and baying in his ear. And they're driving the Government's agenda too.
