Gordon Brown’s notoriously bad luck manifested itself again today. On the morning that the PM might have hoped to reap some modest cheer at the formal announcement of the end of the recession with news of 0.1 per cent growth in the last quarter of 2009, a Californian gentleman named Bill Gross went and burst his bubble.
Mr Gross is the founder and chief investment officer of Pimco, the world’s biggest bonds-based fund managers. When he speaks, it matters, and his assessment of the prospects of the British economy is bleak indeed:
“The UK is a must to avoid. Its gilts are resting on a bed of nitroglycerine.
“High debt with the potential to devalue its currency present high risks for bond investors.
“In addition, its interest rates are already artificially influenced by accounting standards that at one point last year produced long-term real interest rates of 0.5 per cent and lower.”
No cheer there for the Prime Minister and, to make matters worse, it turns out that Pimco’s European operation is headed by Andrew Balls, the brother of the PM’s only remaining significant cabinet ally, Ed.
Gordon was absent from PMQs today, stuck in the Northern Ireland talks. Given what he would have faced in the Commons, however, he may have found in Belfast a blessed sanctuary.
Apparently an hour after PMQs finished, the PM decided to head back. He was merely avoiding PMQs, it seems. Good question, by the way.
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How anyone can possibly count the 0.1 % growth rate as a good sign when it is merely the result of pre Christmas spending fuelled by the cut in V.A.T., now restored to it’s previous level is beyond me.
This figure is ominous. The rate should of course have been much better given the circumstances. However, one must clutch at straws. I’m afraid that the real condition of the country will only become apparent to all after the election.