PM Gordon Brown may have snorted into his cornflakes this weekend after hearing Ben Bernanke, the chairman of the US Federal Reserve, predict that the US recession would end later this year. After meeting EU President Jose Manuel Barroso this morning, all eyes were on Brown to see if he would follow suit – but he wasn’t tempted, saying only that the speed of recovery depended on the results of the forthcoming G20 summit. And nobody seems to be holding their breath for a breakthrough there...
‘We’ll see recovery beginning next year,’ Bernanke confidently told CBS TV yesterday – assuming, he added, that the US maintains the ‘political will’ and ‘commitment’ to keep supporting the financial sector (he acknowledged that it seemed unfair for badly-run companies like AIG to be receiving so much money, but insisted the knock-on effect of them failing altogether would have been much worse). Fix the banks, he said, and the recession could be done by the end of 2009.
Perhaps it's right for Bernanke to be talking up the market - even if this does sound suspiciously optimistic. But Brown’s Government appears to have less cause for optimism than most. With UK unemployment rising (there’s now 10 jobseekers for every vacancy, according to the TUC) as thousands of companies go out of business, the chances of our economy recovering by Christmas look slimmer than Cheryl Cole after a week on Kilimanjaro – although with an election year looming, Brown will hope desperately that Big Ben is right.
Brown chose to stick to more familiar ground this morning, banging his usual anti-protectionism drum; he and Barroso apparently agreed that international cooperation was crucial. Unfortunately, this weekend’s meeting of finance ministers appears to have achieved precisely nothing of any substance, just some vague ideas about tightening the regulatory regime for hedge funds (which is arguably a waste of legislators’ time and effort, since hedge funds clearly weren’t to blame the world financial crisis – but unfortunately for them, they’re about as soft a political target as you can get).
With policy-makers still deeply divided about the value of a worldwide fiscal stimulus – the US is keen, Germany thinks it’s a daft idea – Brown's idea of close international cooperation looks about as far off as the end of the recession...
In today's bulletin:
Barclays jumps 20% as bosses eye sale of iShares
Brown less bullish than Bernanke
'Cheryl Cole effect' helps Kilimanjaro interest mount
Are B&Q staff really the most engaged in the UK?
Five steps to better flexible working