Why am I not more worked up about the thought of recession?

There is an article on Times Online today telling us that in all probability we will officially be in a state of recession in Britain by January, despite the bail-out package underway in America. A state of recession is officially reached once two consecutive quarters of negative growth have been recorded. This is what is forecast for the two quarters up to January. Unemployment is expected to rise dramatically and migrant workers from other parts of Europe are not seeing Britain as the promising place to make their fortune in the way that seems to have been the case in recent years, with immigration from these areas allegedly dropping by up to 70% over recent months.

I can’t help wondering though, how much of this situation is caused by the over-dramatising of financial woes in the media? Surely this must happen, after all they want to sell newspapers and I imagine they’re not going to be content with merely publishing a slight downturn in profits where there is a more exciting story to be had with a few etymological frills added. Just look at what happened recently to HBOS, with what amounted to almost a run on the bank when their problems were published, which in all probability made the problems in this institution far worse.

I am ‘lucky’ in that I don’t have enough money to worry about losing my savings if my bank fails. And I can understand that if you do have significant amounts of savings (over £50,000, as that is the amount that the government will guarantee in the event of the collapse of a bank) then you would be understandably worried if you hear about problems within your bank. But I genuinely feel that the media are causing far more panic and worry than was initially justified. The Times is even reporting today about people stockpiling tinned goods as they think the situation is going to get that bad in the coming months. Is there a need to report that sort of thing? Will we see panic buying in supermarkets of long lasting foods soon? Just look at the effect had by panic buying petrol when there was, in reality, very little need for people to do it. Yes, the petrol stations were running out of fuel, but only probably because they couldn’t fill up the tanks quickly enough. This will be the next thing – shops will start reporting food shortages if people are filling their cupboards with tins. Anyone would think that we’re bunkering down for a nuclear attack, or the next ice age! (I do hear that this winter promises to be a cold, bitter one, but more about that another time!) I think that, where possible, we need to carry on with our normal lives, maybe being a little more careful where and on what we spend our money and just try to get through this trying financial time with as little panic and upset as possible. Maybe that way we could restrict the number of jobs that will be lost as well as the predicted surge in customer borrowing. I feel for the people who are losing their jobs, and I think that we all need to think about what we can responsibly do to try to cut back the number of forced redundancies which will occur over the next few months.

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One Response

  1. I do hear that this winter promises to be a cold, bitter one

    Better than a wet, miserable one.

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