Feel the gloom. With more bad news on the economy this week, is there no comfort, no end to pessimism? Yes! The Magazine challenged statistical sleuths Michael Blastland and Andrew Dilnot to scour the data - and find us five reasons to be cheerful.
Feel the gloom. With more bad news on the economy this week, is there no comfort, no end to pessimism? Yes! The Magazine challenged statistical sleuths Michael Blastland and Andrew Dilnot to scour the data - and find us five reasons to be cheerful.
"They're out of sorts in Sunderland And terribly cross in Kent,They're dull in HullAnd the Isle of Mull Is seething with discontent,
"They're out of sorts in Sunderland And terribly cross in Kent,They're dull in HullAnd the Isle of Mull Is seething with discontent,
They're nervous in NorthumberlandAnd Devon is down the drain,They're filled with wrathOn the firth of ForthAnd sullen on Salisbury Plain."
They're nervous in NorthumberlandAnd Devon is down the drain,They're filled with wrathOn the firth of ForthAnd sullen on Salisbury Plain."
Noel Coward sang of bad times just around the corner. According to the headlines, they've arrived.
Noel Coward sang of bad times just around the corner. According to the headlines, they've arrived.
"With a scowl and a frownWe'll keep our peckers down, And prepare for depression and doom and dread."
"With a scowl and a frownWe'll keep our peckers down, And prepare for depression and doom and dread."
It's no joke if you work, or used to, in the building trade, if your food bill has ratcheted up or your house depreciated. For 10 years, word had it that our economy was on a path of roses. That path now seems strewn with cut-up credit cards.
It's no joke if you work, or used to, in the building trade, if your food bill has ratcheted up or your house depreciated. For 10 years, word had it that our economy was on a path of roses. That path now seems strewn with cut-up credit cards.
Caught between the evils of the credit crunch and the oil price - prompting falling confidence and rising inflation - the authorities seem stuck. They watch, and wait, and hope... while Gordon Brown chews his nails.
Caught between the evils of the credit crunch and the oil price - prompting falling confidence and rising inflation - the authorities seem stuck. They watch, and wait, and hope... while Gordon Brown chews his nails.
But what does the data show? Though some people unquestionably face a rough time, has the gloom been overdone? If you are a house buyer not a house owner, for example, falling prices are good news. Dig into the statistics - if you believe the statistics - and you might even wonder if there's a media conspiracy to depress us by avoiding anything positive.
But what does the data show? Though some people unquestionably face a rough time, has the gloom been overdone? If you are a house buyer not a house owner, for example, falling prices are good news. Dig into the statistics - if you believe the statistics - and you might even wonder if there's a media conspiracy to depress us by avoiding anything positive.
So, with a favourable reading of the recent data, here's our pick of what might have been. 1. HOUSE PRICES ARE UP
So, with a favourable reading of the recent data, here's our pick of what might have been. 1. HOUSE PRICES ARE UP
Believe it or not, they're still going up in places and still higher than a year ago almost everywhere. It was roundly ignored last week in favour of more gloomy surveys but, according to the house price index compiled by the Department of Communities and Local Government, using data on all completed sales (and so more comprehensive than the partial surveys by the Halifax and Nationwide), in most areas house prices are still up on a year ago. Only in Northern Ireland do they show a fall. In London, the annual rate of house price rises actually went up - from 7.5% in April to 7.8% in May.
Believe it or not, they're still going up in places and still higher than a year ago almost everywhere. It was roundly ignored last week in favour of more gloomy surveys but, according to the house price index compiled by the Department of Communities and Local Government, using data on all completed sales (and so more comprehensive than the partial surveys by the Halifax and Nationwide), in most areas house prices are still up on a year ago. Only in Northern Ireland do they show a fall. In London, the annual rate of house price rises actually went up - from 7.5% in April to 7.8% in May.
2. EMPLOYMENT RATE IS HIGH
2. EMPLOYMENT RATE IS HIGH
Despite the evident woes of the building trade, more of those who want jobs have had them in the first half of this year than at any time since Harold Wilson was prime minister. Incredible, but true. The employment rate for the working-age population is about 75%, the highest rate in our recent history - and one of the highest in the OECD. Unemployment has taken a so-far small turn in the wrong direction only in the very latest figures (and will probably continue that way) but, on a longer perspective, it's not since Tom Baker was Dr Who that jobs were as plentiful as for most of 2008.
Despite the evident woes of the building trade, more of those who want jobs have had them in the first half of this year than at any time since Harold Wilson was prime minister. Incredible, but true. The employment rate for the working-age population is about 75%, the highest rate in our recent history - and one of the highest in the OECD. Unemployment has taken a so-far small turn in the wrong direction only in the very latest figures (and will probably continue that way) but, on a longer perspective, it's not since Tom Baker was Dr Who that jobs were as plentiful as for most of 2008.
3. INFLATION HAS FALLEN The Retail Price Index - the old way of measuring prices before the government changed things to produce a lower rate, known as the Consumer Price Index - has actually fallen from where it was just over a year ago.
3. INFLATION HAS FALLEN The Retail Price Index - the old way of measuring prices before the government changed things to produce a lower rate, known as the Consumer Price Index - has actually fallen from where it was just over a year ago.
And since the RPI, unlike the CPI, takes account of mortgage interest payments and the level of house prices, there will be downward pressure on this index as last year's interest rate increases drop out of the calculation and we see the effect of slowing house price inflation. This will help counteract rising energy and food costs. Although these are going up fast, clothing and footwear costs have been plummeting with heavy discounting. Alcohol has also been falling in price. So even if you're still unimpressed, at least drinking away your sorrows has seldom been cheaper.
And since the RPI, unlike the CPI, takes account of mortgage interest payments and the level of house prices, there will be downward pressure on this index as last year's interest rate increases drop out of the calculation and we see the effect of slowing house price inflation. This will help counteract rising energy and food costs. Although these are going up fast, clothing and footwear costs have been plummeting with heavy discounting. Alcohol has also been falling in price. So even if you're still unimpressed, at least drinking away your sorrows has seldom been cheaper.
4. LOWER EARNINGS ARE GOOD Bestruck by gloom? No, Mervyn King's just shading his eyes from the sun at Wimbledon Swallow hard (see 3 above), but squeezed incomes are good - for now. How come? The rising oil price has made us poorer. The Bank of England Governor Mervyn King's big fear is that we will all try to compensate with higher pay, and this will feed into even higher prices and an inflationary spiral, forcing him to raise interest rates.
4. LOWER EARNINGS ARE GOOD Bestruck by gloom? No, Mervyn King's just shading his eyes from the sun at Wimbledon Swallow hard (see 3 above), but squeezed incomes are good - for now. How come? The rising oil price has made us poorer. The Bank of England Governor Mervyn King's big fear is that we will all try to compensate with higher pay, and this will feed into even higher prices and an inflationary spiral, forcing him to raise interest rates.
So data this week showing that income growth is down a smidgen - from 3.9% a year in April to 3.8% in May - will have Mervyn sighing with relief. Yes, it means we all face a lower standard of living as prices outstrip earnings. But if we bite that bullet rather than trying to match inflation, inflation will soon plummet and recovery will be quicker. If we try to avoid the pain, the Governor will feel no choice but to make us pay, perhaps more heavily in the end. A little medicine now, or a lot later? That's right, even bad news on pay could be good news really.
So data this week showing that income growth is down a smidgen - from 3.9% a year in April to 3.8% in May - will have Mervyn sighing with relief. Yes, it means we all face a lower standard of living as prices outstrip earnings. But if we bite that bullet rather than trying to match inflation, inflation will soon plummet and recovery will be quicker. If we try to avoid the pain, the Governor will feel no choice but to make us pay, perhaps more heavily in the end. A little medicine now, or a lot later? That's right, even bad news on pay could be good news really.
5. WE'RE LIVING LONGER Feeling better? No? Then finally, if the economy still depresses you, try this: living longer, working longer, and staying healthy longer all go hand in hand according to data this week from massive and continuing research known as ELSA (The English Longitudinal Study of Ageing). And more of us are doing all three. The study confirms previous evidence from National Statistics that we are, men in particular, putting on extra lifespan faster than ever before, becoming more prosperous in older age than previous generations, and staying healthy with it.
5. WE'RE LIVING LONGER Feeling better? No? Then finally, if the economy still depresses you, try this: living longer, working longer, and staying healthy longer all go hand in hand according to data this week from massive and continuing research known as ELSA (The English Longitudinal Study of Ageing). And more of us are doing all three. The study confirms previous evidence from National Statistics that we are, men in particular, putting on extra lifespan faster than ever before, becoming more prosperous in older age than previous generations, and staying healthy with it.
Though you have to ask, if life is as miserable as they say, who wants more?
Though you have to ask, if life is as miserable as they say, who wants more?
As Noel Coward put it:
As Noel Coward put it:
"We're going to unpack our troubles from our old kit bagAnd wait until we drop down dead."
"We're going to unpack our troubles from our old kit bagAnd wait until we drop down dead."
Alas, now even that takes longer.
Alas, now even that takes longer.
Michael Blastland are Andrew Dilnot are authors of The Tiger that Isn't - Seeing Through a World of Numbers, published by Profile Books.
Michael Blastland and Andrew Dilnot are authors of The Tiger that Isn't - Seeing Through a World of Numbers, published by Profile Books.
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