After the blockbusting success of Top Gun: Maverick, Tom Cruise’s single-handed mission to save the multiplex continues in July with Mission: Impossible - Dead Reckoning Part One. The seventh movie in this franchise will doubtless follow the same pattern as its predecessors, as Ethan Hunt (played by our hero) is set a ludicrous task by his paymasters, the Impossible Mission Force, and after a series of unforeseen setbacks saves the day while dangling from a helicopter or motorbike. Hunt should be seeking new employers. Over the past three decades, the Impossible Mission Force has repeatedly been compromised, tagged as a rogue agency, and has overseen a death rate for corporate-level management that warrants serious investigation.
It is safe to say that Rishi Sunak is no Ethan Hunt, although he is coincidentally the same height as the diminutive hero. Thankfully, though, the task facing him when he became Prime Minister was very much Mission: Possible – don’t do crazy things that terrify investors/society-at-large and be broadly sensible. He has, though, also had to deal with an IMF, the International Monetary Fund. In this world, the IMF don’t send their messages through self-destructing gadgets but instead via regular updates regarding the health, or otherwise, of the global economy. And for most of the past year, their messaging about the UK economy has been relentlessly gloomy. In October 2022 they cut their UK 2023 GDP forecast by over 1%, predicting the country faced the largest slowdown in growth of any major advanced economy. By January 2023 they were expecting the UK to enter recession, cutting forecasts for 2023 by another 0.9%. Over recent weeks, however, the IMF’s attitude has brightened. In April there were marginal upgrades to forecasts but the bigger move arrived this week when they decided that the UK economy would, in fact, grow by 0.4% during 2023 versus their prior expectation of a 0.3% contraction.
Messaging matters. This applies to an even greater extent when those messages come from supranational institutions that are listened to around the globe. The narrative of UK ‘declinism’ has been adopted by all sides looking to serve their own ambitions. In reality, the UK economy has faced a trifecta of crises over the past year (inflation; US regional bank meltdown; Liz Truss) and emerged not wholly unscathed, but in reasonable shape. Relatively tight labour markets have given workers a degree of bargaining power, providing some mitigations against the impacts of rising food and energy bills. The UK’s banking system, with balance sheets bolstered post the GFC, has weathered recent turbulence and should be viewed as a bulwark to the broader economy, not a threat. The UK housing market, often used as a bellwether, is showing signs of renewed life. The listed housebuilders, such as Taylor Wimpey and Persimmon, have all cited improving sales rates and resilient pricing in their spring updates.
Like every country, the UK faces challenges that are both global and unique in nature. This week’s IMF update belatedly recognises that it also has qualities that help in difficult economic circumstances. The mission for those of us with an interest in seeing the UK prosper, should we choose to accept it, is to keep pushing back on the narrative of terminal UK decline.