Wednesday 26 January 2011

It's the weather, stupid

The Mirror has today one of it's most effective front pages  for a long time. It is funny and impactful; communicating clearly some difficult to understand economic concepts. I have little doubt that it will be effective in undermining George Osborne's arguments yesterday that the weather had a large impact on the UK's GDP growth figures.

Today's exchanges between David Cameron and Ed Miliband in Prime Minister's Questions have been dominated by the growth figures and criticisms of Osborne's reasoning. The Labour leader ridiculed the government's explanation while Ed Balls sat smugly next to him.

It is interesting then that more than one friend in the City has contacted me this morning to say Osborne's analysis is exactly right. One is a senior transport analyst and another works in an industry which has full or part ownership of a broad range of companies. Both say the same thing: transport, haulage, retail and others have had a shocker as a result of the worst weather for decades.

Actually it is very simple. If we all consider how we as individuals were adversely affected by the weather in December then it is obvious that business - in fact entire industries - will also have been significantly impacted. The Mirror may have a nice picture, Ed Miliband an easy line of attack, but I'd rather listen to those who actually know what they are talking about, and my reply to the two Labour Ed's would be to paraphrase Bill Clinton's 1992 campaign: It's the weather, stupid.

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