CUTTING ROOM: Strange fallout from the terrorist attack; Gordon's future; euro dissenters kick off with a bar-room brawl; meet the Bank's special agent ... Evan Davis at large

CUTTING ROOM: Strange fallout from the terrorist attack; Gordon's future; euro dissenters kick off with a bar-room brawl; meet the Bank's special agent ... Evan Davis at large - With all the gloomy news around at the moment, and the inveterate tendency fo

by EVAN DAVIS, economics editor, BBC
Last Updated: 31 Aug 2010

With all the gloomy news around at the moment, and the inveterate tendency for news programmes to focus on the negative, it is perhaps time to re-state a golden rule of economic consequences: few episodes that occur in life have unambiguous economic results; almost every event produces business winners as well as losers.

I say this in the wake of the attack of 11 September not to belittle the magnitude of the bad news but to help assign the correct dimension of badness to it. The attack on the World Trade Center was far more a human disaster than an economic one, and we should not let talk of the economic impact distract us from that view.

Of course, the economics can be ambiguous, but we should be careful how we report it; I'm not sure the FT should have passed the headline 'Loss of office space may lift New York property market' quite as soon as 14 September.

But in the aftermath of 11 September, I've been keeping tabs on some little-publicised effects of the attack. For example, I observe a new-found enthusiasm for the EBRD and IMF to give support to the states neighbouring Afghanistan.

At a more parochial level, I've been told that the popular celebrity-trivia magazine Heat, which might have expected to suffer from the preponderance of really serious news, has weathered events well. Presumably, if people are depressed by the grim atmosphere and are reluctant to go out, they need some escape. Trying to predict all the effects using your intuition is a tough business.

Spare a thought for the chancellor. It's hard for the man to shine when the main headlines are on diplomacy and defence, and when the economic news primarily concerns deficient demand and deficits.

And even though it's November - time for him to shine with his pre-Budget report again - Gordon Brown will find it hard to conjure up good news.

For the first time since Labour came to power, the public finances are set to come in no better than planned. And this occurs just as public deficits were projected to appear on the horizon again.

This parliament does not promise to be quite as beneficent for the chancellor as the last. So if he can pull us through all this with his dignity intact, with no serious crisis and with the worst of the doom-mongers proven wrong, look for an unstoppable rise in Brown's stock.

But if things turn out badly, he presides over bust without a boom and one or two big companies run into trouble, be prepared to think the unthinkable - a move for Brown to some other post, where his anti-euro sentiments will not have their present bite.

Talking of the euro, the 'No' campaign has just sent me a load of new material. It does not augur well for the quality of any future referendum debate. The campaign includes anti-euro beermats to be launched in JD Wetherspoon pubs ('Euro Let's get shot of it') and a postcard that compares the cost of conversion with the euro to the annual NHS budget ('pounds 35 billion NHS budget; pounds 30 billion to join the euro'). Alas, it makes no reference to the fact that euro-conversion is a one-off investment; the NHS bill is an on-going annual sum, so the two should not be compared. Nor does it point out that the more reliable estimates of conversion costs are about pounds 12 billion. Oh, and it forgets to mention that the true NHS budget is actually pounds 47 billion. Apart from that, it is all quite accurate.

The Bank of England may not offer the career excitement of MI5 or MI6, but it does actually employ its own agents, one of which I had the pleasure of spending a little time with recently. There are 12 in all, assigned to the regions of the UK. Their mission is to take the pulse of the economy by talking to the business community in their territory. Each month, four of them brief the Monetary Policy Committee on the Friday ahead of the regular interest rate meeting, thus helping the committee frame its decision.

Given that the agents are all licensed to lunch (that is, after all, the best way of enticing business people to talk about their trading conditions), I was impressed at how slim the agent I met was. Moreover, he had a dry sense of humour and a robust honesty about the state of the economy - refreshingly open for the Bank.

So if you get a call from an agent seeking your views about how things are going, I recommend you accept.

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