Ignoring The Economic Crisis

I bring you tidings of great gloom this Christmas time. Sir Richard Branson has just joined the long queue of experts saying that our economy is in a less than healthy state.

What he actually said was much more specific. And not repeatable here. And he's right. Like with you, things on this side of the pond are going from bad to worse.

But the problem with us British, is that when the chips are down, we never seem to be able to face reality. During the Second World War, we couldn't countenance the possibility of defeat by Nazi Germany, and now as a nation we still don't seem to have grasped quite how awful everything has become. There's a feeling of unreality and it's all because of falling interest rates.

Traditionally, when interest rates go down, the Germans save and we Brits go out and spend, spend, spend. And the incentives are there. The sales have started early. No waiting until after Christmas. There's ten, twenty and even fifty percent off pretty much everything in the top London stores -- even supermodel Kate Moss has been spotted trudging round buying bargains. You can get a new Toyota for half the ticket price. Property values are sliding and foreclosures are set to rise. People are worried about their jobs. The signs of a serious collapse are out there, even in the run up to Christmas, the nation's busiest shopping period by far.

One of our leading chain stores, Woolworths, is closing all its 800 branches after more than a hundred years on Main Street. That's 27,000 layoffs to add to the list.

But this week, our Office for National Statistics has put out surprise figures that suggest retail sales here are on the rise. And the truth is that many Brits have turned their faces away from the awful truth. They've taken their credit cards on one last spree before the grim reality of Winter 2009 hits them in a few weeks time. You'll hear claims that our failing economy is being hyped by the media. That we'll just have to ride it out for a few months before things come right. I don't think so. Trust me, the worst is yet to come. Happy Christmas, America.
By Simon Bates