Don't panic, Mr Mannering! The message being delivered by everyone from Europe's finance ministers to the Bank of England seems to be one of wartime stoicism. But is that enough?

Here in Britain, the wartime poster with stark white lettering on a red background which says 'Keep Calm and Carry On' has become ubiquitous. It's found its way onto mugs, t-shirts and screensavers.

Come Thursday (UK time) we may well be hearing it from the Bank of England. The Bank's Monetary Policy Committee will be announcing its latest interest rate decision and we might get another round of quantitative easing.  QE still essentially amounts to printing money, no matter how you dress it up.  But QE sounds cleverer, especially if you say it in full.

And plenty of clever people think we do need to print more money in the UK.  Many of them come to talk to us on CNBC and say another round of QE before the end of the year would be both necessary and welcome.

But there is another view. That's the view you can find down at the pub on a Friday night.

Because people are still going to the pub and they are still enjoying a beer or two and talking about the Rugby World Cup. And they still mostly have jobs and houses and can put food on the table. OK, so that food is noticeably more expensive than it was a year ago, but for those people, that's a good reason not to print any more money, as it almost always results in higher inflation.

Unfortunately for all of those employed, drinking, relaxing types, they will just have to learn to keep calm while the Bank of England carries on printing.

What's really going on here is that people aren't so much in a tizzy about what's happening to them now. It’s not stalled growth so much that scares people. Yes, unemployment is high but at 8% it’s still lower than the US (just over 9%) and the EU (at 10%, which is an average that takes in Spain and its 20% jobless rate).

People aren't panicking about now, they're worried about the future.

Britain's Chancellor George Osborne had to acknowledge that this week, when he gave his speech at the Conservative Party Conference on Tuesday. Together we'll ride out the storm, he said.  That's not terribly reassuring really is it?  He didn't say anything about it all being fine really and he certainly didn't say anything about cutting back on cutting back. He has staked his credibility on deficit reduction and so is not abandoning the coalition government's austerity measures and adopting a gentler plan B that many think is necessary as growth fails to materialise.

His message: keep clam while I carry on cutting.

But what neither he, nor the Bank of England can control is Europe. It's the UK's biggest trading partner and its horrible debt problems just keep on getting worse. (And the series of political meetings and deadlines in the next few week makes for a volatile mix).

After his speech to the Conservative Party faithful in Manchester, Osborne headed for Luxembourg to meet with other European finance ministers. The news from that meeting so far includes the announcement that the sixth tranche of bailout money for Greece is actually not going to be delivered in October, as planned. No, it will now be in November. But that's fine, they tell us. Greece can cope till then. And we'll all just have to cope till then too apparently, even if share markets can't.

Keep calm while European policy makers carry on dragging their feet.

Anyone else feel the need to buy the poster?

Comments (0)

No comments yet.

Post new comment

You must be logged in to post a comment.