Business Eye: One thing is certain and that is uncertainty

Alex Pratt
Alex Pratt

If there is one condition business craves, it is a degree of certainty in the underlying economy.

Being able to understand the broad direction of travel has a powerful impact on decisions taken on business investments, new staff, and launching new products.

Since the crash in 2008 we have been living in uncertain times, with the prospect of banks, countries and even the Euro zone collapse a daily discussion on the news. While the impending threat of financial collapse is no longer a daily headline, one has to wonder at the future stability of the USA and Europe, including the UK, with such a huge debt overhang.

Deep uncertainty remains just beneath the headlines.

On the other hand, last week a significant fall in the UK unemployment rate to 7% had the Bank of England scrambling to ease interest rate hike fears and the Pound is trading high against the Euro and the Dollar, so the outlook for the currency is uncertain.

The uncertainty is amplified by the prospect of Scottish independence, which would have implications for Sterling, and in and of itself is stoking fears about jobs and growth to the extent that I notice the CBI has just come out campaigning strongly for a ‘no’ vote.

We then have the immediate prospect of the Euro elections, which look like offering a strong vote of confidence in UKIP, less to do with their ardent opposition to HS2 than their strong conviction that the UK (with or without Scotland) is big enough to look after its own affairs. We might end up with an independent Scotland in Europe and the rest of us out.

Uncertainty indeed.

While we are on the subject of elections, we are of course already headed into the roller coaster lead up to the May 2015 General Election, which is certain to deliver a new Government of one sort or another: more uncertainty.

Add to this the grim potential impact of the Ukrainian affair that has so many chilling parallels with the outbreak of WW2. Adolf Hitler annexed Austria in March 1938 and took over the Sudentenland to break up Czechoslovakia on the ruse of protecting ethnic Germans. Sound familiar?

Last week, in Donetsk a letter was issued to all ‘citizens of Jewish nationality’ asking them to register with the new pro-Russian regional administration.

Certainty is not going to break out any time so we may as well crack on.