Friday, 28 October 2016

Nissan And The Noddlers

Two bits of news to celebrate and I would actually prefer to celebrate than be down about things. One, our GDP, that's the gross domestic product of the UK is up, a tiny amount but it's up, especially in relation to post referendum forecasts. The second bit of really good news is that Nissan has announced its intention to build two new models at Sunderland, thus securing the jobs of thousands of workers for some years, both their own workers and others in the supply chain and local economy, so that's great.

Now the caveats. GDP is up because services grew more than expected, unfortunately manufacturing, agriculture and construction are all down, which is serious, especially if you work in one of those sectors rather than banking for example. Another caveat is that the figures are more or less backward looking, that makes them real, but not necessarily a reliable indicator. People are still spending, which you would ordinarily say is a good thing, but the caveat is that personal loans and credit card debt are growing at the fastest rate for thirty years. That's a fragile bubble and nothing to do with a so called metropolitan elite.

Debt's all well and good if you can afford the repayments and are happy to live in the red, personally I think you'd be off your noddle to want to love like that, also it's not so good if your job in manufacturing, agriculture or construction disappears. It's also a problem if historically low interest rates don't last and inflation returns. When I was paying a mortgage, those interest rates briefly peaked at around 17%, 15% lasted quite a while. Add the difference on to your current mortgage and gauge the risk you might be running in an uncertain future.

Even though interest rates are at an historic low, we still see television advertisements for loans at over one thousand percent, which is immoral, dangerous, profiteering from desperation and, much as I don't like to see government dictating prices to businesses, really should be legislated out of existence.

Final caveat on the good news about Nissan is that one has to wonder what Mrs May has promised Nissan, the boss of which company was recently in Downing Street for a private tête-à-tête with her secretiveness herself. Can whatever was promised be delivered if negotiations don't go as one country wants but as twenty seven countries want? Government needs to be even handed and to be seen to be even handed, political meddling always leads to disaster, be it relationships with doctors, education or business. Therefore what Nissan gets, others should get, watch carefully.

I see that the pound has not shot up to previous levels, or even at all, on the back of all this good news, maybe I'm not the only one thinking there's a bigger picture here. For all that well done Nissan.

My gifts for car enthusiasts if you're still spending or looking to Christmas.

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