10
ECONOMIC SUMMARY
A general election or
a referendum in the
UK is necessary to
determine whether
the people wish to
follow a totalitarian
or tolerant destiny
counter counterpoint point
History suggests the UK has
always made the right call
BY ROGER NIGHTINGALE,
INDEPENDENT ECONOMIST
Relations between the UK
and Europe have rarely
been good. Over the past
500 years, disputes have
been almost continuous.
Sometimes, the conflict has
been military, mostly it has
been philosophical. The
basic problem has been
the mainlanders’ predisposition
to to ta litarian ism, the
islanders’ to individualism.
Initially, religion was the
central issue: Catholic authority
colliding with Protestant
conscience. Subsequently,
politics aggravated
the divide: an autocratic
Louis XIV contending with
a constitutional William III;
a tyrannous Napoleon with
a liberal Pitt; a fascist Hitler
with a democratic Churchill.
Each time, the UK found
itself in the minority. The
European majority chose,
shamelessly, not to get
involved. It preferred
expedi en cy to prin ciple. In
doing so, the mainland
demonstrated an almost
un blemis hed capacity for
getting things wrong; the
island, an almost equally
impressive one for getting
them right.
The current spat with
the EU should be seen in
this context. Most member
states had chosen, banally,
to lumber themselves with
an unworkable common
currency. The UK, in a tiny
minority, wisely, refused to
do so. Predictably, the
system collapsed; and, pre-
dictably also, those who
had em broil ed them selves
in it most enthusiastically
vented their fury most
vituperatively on those
who had not.
The parallels with 1940
are stark. France is beside
herself with petulant rage,
envious of Germa ny’s econo
mic competence and of
the UK’s economic insight.
The UK, 70 years ago,
was not wholly united; nor
is it today. Cameron is
unreliable; a latter-day
Cham ber lain. He has on ly
reluc t ant ly drawn a line in
the sand. He would prefer
to compromise, to sacrifice
another Sudetenland. He
has being encouraged in
this regard by comparably
unreliable colleagues.
Clarke is Lord Halifax;
Clegg, Lord Haw-Haw.
What is needed is a
general election; alternatively,
a referendum. Let
the people decide whether
to live under European
authoritarianism or Anglo-
Saxon tolerance.
Do not let menda cious
poli ti cians fudge the issue
any longer.
United Kingdom
� Retail sales fell in November, by 0.4% on October’s
level, although for the three months to the end of
November sales rose by 0.7% representing the
strongest three-month gain since August 2010.
� Unemployment rose to its highest level since 1984
when it reached 2.64 million, an increase of 128,000
in the three months to October.
� CPI inflation fell to 4.8% in November, down from 5%
in October; over the same time period, RPI dropped
from 5.4% to 5.%.
� Industrial output fell in October by its quickest rate in
six months, down by 1.7% from October last year.
United States
� The price of goods rose in November, rising by 0.3%
following October’s fall of 0.3%.
� The number of weekly welfare payment applications fell
in the middle of December to 366,000, its lowest level
since May 2008.
� Unemployment fell from 9% to 8.6%, although it is still
considerably higher than the rate of 5.4% in May 2008.
� Consumer prices in November held steady from October;
on an annual basis they are 3.4% higher than November
2010, down from 3.5% YoY on the previous month.
Japan
� A strong yen and the ongoing crisis in Europe has
pushed business confidence in Japan down, with
its latest quarterly level falling to -4, from +2 three
months ago.
� Its economy grew in Q3 for the first time since March’s
earthquake, rising by 1.5% compared to Q2.
� A report from the IMF includes comment that Japan’s
government debt will reach 250% of GDP by the end
of 2015.
PORTFOLIO ADVISER [www.portfolio-adviser.com] JANUARY 2012
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