Did you you feel the ground shake at lunchtime? There was a financial earthquake, but I imagine it passed most of us by. The Bank of England began its much anticipated experiment in quantitative easing - dumping the first couple of billion into the economy to save us from deflation.
Though some effects can already been seen in financial markets, it may take months before the rest of us know whether this colossal gamble is working. What is rather easier to see is what would happen if it doesn't work. As if on cue, Toyota announced a series of cutbacks in pay and production that presage the deflationary future possibly facing all of us.
The employees at Burnaston in Derbyshire were given a blunt choice between losing many of their jobs or accepting a 10% cut in pay and hours worked. It is to the credit of both unions and management that they chose the later. Faced with the same choice, I imagine most of us would do the same. It could have been worse; there was even talk of going down to a three-day week.
What is scary though is imagining what happens if this becomes commonplace. Once wages and prices start falling unison, it will be very hard to reverse the downward spiral.
In the 1970s, a three-day week was the ultimate symbol of economic malaise: a sign we couldn't arrange society effectively enough to keep the electricity on. Now, part-time working is probably a sensible compromise to buy time in the hope that things improve before mass redundancies start. Next time the earth quakes in Threadneedle Street, it is to be hoped that the ripples reach out to Derbyshire.
