RUTH SUNDERLAND: Shadow of the jobs axe 


Maybe it will come as a huge relief to learn that the Bank of England is no longer forecasting the worst downturn in 300 years and only the biggest for a century but then again maybe not.

Doomy historical comparisons are one way of illustrating the scale of the crisis. But our economy, from Amazon to Zoom, bears very little resemblance to that in the reign of King George I.

Though I suppose in fairness I should point out that 1720 was the year of the South Sea Bubble, a story of crazy government borrowing, boom and bust that has been a template for financial folly ever since. Things have also changed a bit since 1920.

An audit by the Daily Mail has found that since lockdown began more than 130,000 jobs at leading firms are facing the axe, and those are just the ones we know about

In the here and now, the Bank is warning that vulnerable firms face a formidable cash-flow crisis, and that there will be more insolvencies and more job losses.

An audit by the Daily Mail has found that since lockdown began more than 130,000 jobs at leading firms are facing the axe, and those are just the ones we know about.

Most people are employed by small and medium-sized companies where redundancies slip below the radar and only show up later in the statistics.

The Bank’s prognosis for unemployment of 7.5 per cent is actually quite optimistic and lower than in the aftermath of the financial crisis when it ran above 8 per cent. Most other analysts are pitching higher.

The Bank’s forecasting is based on input from a network of regional agents and must be taken seriously, but it is not infallible.

Early in his tenure, Mark Carney, the previous governor, was way off in his expectations for unemployment, which fell far faster than he anticipated.

Economic predictions have less chance than usual of being even vaguely accurate under current conditions.

It isn’t just economists being incompetent. The data is not as comprehensive as it usually is because fewer firms are responding to surveys. 

Government policy is in crisis mode and harder to predict than normal and, of course, much depends on the behaviour of the virus. 

Which is all a rather long way of saying: everyone knows the economy will take a horrible hit, but no one knows exactly how horrible.

What we do know is that if we want to reduce the level of job losses and economic harm, we need to get back to work.

And, as far as is safely possible, this should be in offices, factories and shops, not attics and kitchen tables.

Viva Amanda

More than half a million private investors in Aviva are pinning hopes on new boss Amanda Blanc.

The company, and its shares, have struggled in the past five years.

Previous chief executive Maurice Tulloch failed to articulate a distinctive strategy as did his predecessor.

The plan from Blanc is to become Britain’s leading insurer and to focus on Aviva’s strongest markets, namely the UK, Ireland and Canada. Other parts of the international empire will be scaled back.

She won’t, as some have speculated, split the UK general insurance business from the life assurance side. 

That’s an idea that has done the rounds for some time, but diversification is more efficient from a capital point of view. 

Aviva, which was formed out of a constellation of businesses including Norwich Union and General Accident, has a great heritage and has been doing a good job for customers.

It has not managed so far to convert that into a payday for investors, who will also be disappointed at hints the dividend will be cut. It will be a tough job to succeed where her male predecessors have stumbled, but Blanc has already injected a dose of energy and verve.

Ivan’s lost divi

Not much sympathy, I expect, for Ivan Glasenberg, the chief executive of commodities giant Glencore, who has missed out on around £180million of dividends and who yesterday made paper share losses of around the same again.

His pay arrangements are, however, amongst the most sensible in the FTSE 100. Indeed, his package, which all told adds up to a relatively modest £1.1million, puts him at the bottom end of the remuneration league.

As one of the architects of Glencore, he has a substantial shareholding in the business and relies on that for his rewards, so his interests and those of other investors are far better aligned than in many big companies.

He may be a billionaire, but he is an entrepreneur and not your conventional fat cat.

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