Pessimism is a great British tradition, but some think it’s holding the economy back. Should Brits be more optimistic? We look at the case for and against in this week’s Debate

YES: Talking down the economy will become a self-fulfilling prophecy

I think that Britain’s economic problem is not a lack of investment; it’s absolutely a crisis of confidence. The UK is still one of the world’s leading economies and we compete globally in the service industry, and we have a seriously high concentration of top quality SMEs. However, we do persist in talking ourselves down, and the industry press is consistently framing every challenge as proof of decline.

I believe that this narrative is important because when the industry press consistently talks the economy down, it will have an impact on the sentiment of business leaders and investors. Pummelling them with negative narratives will make business owners more cautious about investing, hiring and expanding than they otherwise would be.

In business, sentiment drives behaviour. When the conversation is relentlessly pessimistic, then companies become defensive and hiring is delayed or expansion plans are shelved. Investors are exactly the same, even in some cases applying a discount to British assets not because the fundamentals are weak, but because belief in the future is. We end up pricing in failure before it happens.

This........

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