23.06.08 by Andrew Montlake

Media Myth

A survey I chanced upon last week from Zurich UK Life stated that 21% of the public in the UK believe that the Credit Crunch is a "media created myth" !

Now to be honest I am not sure if this is good or bad news. Bad because it means many people have got a rude awakening coming to them as the effects spread out to the wider economy, and good because it means that consumer confidence may not be as badly effected as everyone fears.

We are a funny lot really, but then we hear so many things from politicians and the media that are plainly exaggerated that sometimes we do not know what to believe. Personally I love a good conspiracy theory, and it wouldn't surprise me if the financial crises was engineered by the Illuminati to keep all of us workers in our places !

On a serious note, whilst it is important not to panic and keep things in perspective, people really do need to keep their finances in check and ensure that their protection is up to date.

Meanwhile, Mr Darling has been calling for everyone to be realistic in their wage expectations and increases, except MP's obviously, in order to ensure inflation does not spread.

With the cost of food, oil and just about everything else rising, inflation is tipped to hit the 4% level. As a guide, an average loaf of bread in 2003 cost a mere 58p. Now you are looking at paying £1.15, that is quite a jump and means I have to ration my cheese and vegemite sandwiches.

Stagflation is a real issue now which, for those who scraped by in their economics remedial classes like myself, means a period of rising prices and slow economic growth much like we saw in the 70’s. Before we go breaking out our flares and platform heels again though, let’s put things into perspective. Unlike the 1970’s it is unlikely that wages will follow suit dramatically, especially if my recent conversations are anything to go by, and, perhaps more importantly, house prices are not going north.

A bit of perspective is needed as well. We are not talking about inflation rates at 24% as in 1975, 8% in 1982 or 9.5% in 1990. It is still historically low. Granted it is rising but many of the rising costs, as Mr King suggests, could well be temporary.

Finally, it was nice to see justice in football last night as Spain put an end to the boredom which is Italian football.

Viva Torres, Viva Villa, Viva Espana !!!

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