Gloom? Don’t trust consensus?

Less confidence about the UK economy and expectation of a UK pensions crisis were the almost unanimous view of the excellent ACT Annual Conference in Manchester.

John Humphrys, chaired a fascinating “Question Time” as the last conference session. A very well balanced panel (Paul Boyle, CEO of the Financial Reporting Council, Barbara Cassani, Executive Chairman of Jurys Inn, Trevor Williams, Chief Economist of Lloyds TSB, and Alastair Clark, former Executive Director and Advisor to the Governor, Bank of England).

But there was astonishing unanimity of view in the audience to two questions John Humphrys put to them:

• Did this week’s budget improve your confidence in the economy? and
• Do you expect a UK pensions crisis?

One rarely sees an audience with one mind – but in an audience of several hundred, only three voted for improved confidence and no one voted for not expecting a pensions crisis.

If these views of corporate treasurers are representative of industry as a whole, business decision making is not going to be as supportive of economic recovery as perhaps the Chancellor was hoping in his budget. More needs to be done to help confidence recover.

I am always sceptical of economic predictions which seem to be so widely held. In this case they either represent a low point for confidence or we really are in trouble. The two questions are somewhat linked. We could have a pensions crisis even though the economy, overall, recovers, but a failing economy is not the best environment for pensions savings.

Make what you will of the audience response – but such monochrome response leaves me concerned that the market place for ideas is as blocked as some financial markets.

Barbara Cassani in a slot earlier this morning gave some sound advice about managing in the current environment and ensuring companies are fitted for responding to opportunities which will be found. The negative implications of the audience response are perhaps not as profound as they might seem at first glance.

We are not all doomed.

By John Grout