Back in August, when I was looking through retail sales figures for this newsletter, I wrote:
Thus far, despite rising prices, people have maintained the volume of consumption - trying to dig their heels in and hold their ground.
That’s possible for a while, you spend down savings, you use credit cards and overdrafts, you haven’t felt the full hit of interest rate rises yet because your mortgage fixed rate hasn’t expired…but, eventually you run out of road.
That worries me, because with government spending falling, business investment low, consumer demand is probably what’s been keeping economic growth bumping along. The Bank of England seems set on more interest rate rises, even as inflation falls and growth staggers along (0.2% in April to June)…it just feels to me that a recession is still on the cards.
And then, in my predictions for 2024, I said…
We'll have a recession - only a little one, and it won't feel much different to how this year felt. We've been bumping along at or near zero growth for so long, and the last quarter was negative, so it wouldn't be a surprise for us to get two negative quarters in a row. Maybe even Q1 2024.
I was perhaps being a little optimistic, because it turns out (once the figures were revised) we were already in a recession, triggered in part by the stuff I was talking about…falling consumer spending.
As I said at the end of the year, I don’t think it would have felt much different to have been a fraction of a percentage point in growth rather than contraction. The real story is we’ve been bouncing along at near zero really since the end of 2021, and scrabbling to put together any sort of consistent economic growth which isn’t related to lifting Covid restrictions.
Retail sales have bounced back in January, and the Bank of England reckon we might already be out of recession. Which I suppose is good news, but I’m struggling to feel cheered. They also used an appearance in front of the Treasury Committee to suggest that the definition of a recession (two consecutive quarters of negative growth), was unhelpful.
I’m afraid I’m with the chair of Asda on this one, who said last week “It looks like a duck, it quacks like a duck, it walks like a duck, it is a duck - it is a recession.”
How many North East Tory MPs?
The Guardian has done some analysis of which seats the Conservatives are likely to lose based on current polling. It’s obviously hypothetical, swings aren’t uniform, local issues reign, and there’s still a long way to go. There’s also some boundary changes in there which make direct comparisons difficult anyway.
However, it suggests the North East will go from the 11 Tory MPs it has today down to just three…those being Berwick, Blyth and Hartlepool.
If, as is expected, Ben Houchen is re-elected Tees Valley mayor, he could end up a fairly lonely figure at that end of the region.
£157,557 for a house
That was the North East average in December 2023. In the North East, prices peaked in August (at about £163k) and fell 0.8% in the 12 months to December.
That’s the smallest annual fall of those regions which did fall, but the North West and West Midlands both saw growth.
The English average price is still just over £300k, despite a fall of 2.1% in 2023.
The child poverty gap is 55 percentage points between Jesmond and Elswick
The North East Child Poverty Commission had a new report out on Friday, with some in-depth stuff on child poverty in the region.
It’s a topic I’ve mentioned before in this newsletter, as well as in my column for The QT, and I rely lots on the Commission’s work whenever I write on the topic.
This report draws out a number of the characteristics of child poverty in the North East, going beyond that big headline figure of 35%.
In the North East Mayoral Combined Authority area, the highest child poverty rate is Elswick in Newcastle, and the lowest is North Jesmond (also Newcastle) and the difference is 55 percentage points
The proportion of children in poverty from working families has gone up 11 percentage points (56% to 67%) since 2014/15
One in five (21.5%) children in the region in households where all parents work are in poverty - that’s doubled since 2014/15
One in five children in the region (over 100,000) are classed as living below the ‘deep poverty’ line, with 60,000 of those in ‘very deep poverty’.
The Commission recommends working on three priorities.
First, maximising family incomes by doing things like making sure people are claiming benefits they are eligible for and reducing barriers to accessing services.
Second, making work a route out of poverty by increasing the commitment to the Living Wage, filling childcare gaps, and other measures to ensure people across the region benefit form economic opportunities.
Third, ensuring the best start in life for the next generation by expanding free school meals, expanding a Baby Box scheme across the region, and focusing Mayoral money to support these and other schemes.
All of this sits under a region-wide anti-poverty commitment.
What I’ve been reading this week
Jamie Hardesty’s Tech Digest from Friday contained a section remembering Ian Birtwistle, who had long been part of the North East tech scene with Enigma Interactive. I didn’t know Ian, but I did hear him tell his story at a Business Beats Cancer dinner just over a year ago. Well, most of his story anyway, it moved me so much I had to step out for a bit of it. That was just my internal reaction rather than his delivery though, as he seemed every bit as funny, charming and relentlessly positive as those who knew him better say he was. It certainly wasn’t a sob story. Jamie has written some of his own recollections, as well as shared a few from others.
Changing tone completely….my latest piece for Pattern (my tenth feature for them, incredibly) was an interview with ERNIE, the musician also known as Joe Allan. Joe is also a chef, and we talked about the commonalities between music and kitchen work, as well as the inspiration for his music and where he finds his confidence.
What to look out for in the next week or so
PMQs later on - North Tyneside’s Mary Glindon is down to ask a question
The last Commons debate of the day is due to be on water pollution on the East Durham Coastline, led by Easington’s Grahame Morris
Data on divorces in 2022, due tomorrow
Data on births in 2022, due on Friday (hopefully they’ll also tell us how many of those divorces were soap opera style due to impending births…)
Business R&D figures, including a regional spread, due on the 27th
A&E wait times data for across the UK, potentially (provisionally) on the 28th
Data on trust in government, due on 1st March
Working with me
I’m coming up to a year in full-time self-employment, and tremendously pleased to still be paying the bills. I’ll probably reflect on and celebrate that milestone and the people who helped me get to it (and hopefully well beyond) in March.
In the meantime, I’m available for policy and content needs. Let’s have a chat if I can do things like write stakeholder briefings and consultation responses for you, or update your senior team on the state of the region, or help you tell interesting stories in one way or another.
You can find out more about me on my website.
You can email me on worroom@substack.com or arlen@arlenpettitt.co.uk
I’m @arlenpettitt on Twitter, and you’ll find me on LinkedIn.
There is a confusion here in the election piece, which comes from The Guardian’s list of potential Conservative losses. These are the 2024 seats based on notional majorities after boundary changes. The Conservatives will not hold Blyth - but it doesn’t make the list because they don’t hold it. The new seat, Blyth and Ashington, had a notional Labour majority in 2019. They won’t hold Berwick on Tweed either but mainly because it will now be known as North Northumberland (though some landslide scenarios question this). How The Guardian are projecting Hartlepool is not clear. Again, it would not be a Tory loss from 2019 as Labour held it. Whether the Conservatives would hold on to their by-election gain is another question - and hard to predict but I suspect not. “They’s funny folks doon there”, as my Granddad would have had it. So the probability is that The Guardian’s list of losses imply a sole hypothetical Conservative.