It is your patriotic duty to spend spend spend on the high street, says LEO McKINSTRY | Leo McKinstry | Columnists | Comment

The grim outlook on jobs is part of a wider picture of economic gloom. Entire sectors like the arts, hospitality, travel, aviation and entertainment are in serious trouble. Overall, the Bank of England estimates that gross domestic product (GDP) fell by 20 percent in the second quarter of the year, one of the biggest drops this country has ever experienced. Yet that figure, shocking though it is, contains some seeds of hope. For the Bank had initially forecast in May that the decline would be 27 percent, but the latest, more positive assessment, is that a V-Shaped economic revival is underway.

That optimism was spelt out yesterday by Andy Haldane, the Bank of England’s chief economist, who said that “the recovery has come somewhat sooner, and has been materially faster, than in our May scenario.”

Given the dismal news on the jobs front, his claim might seem dubious, yet it is supported by a wealth of other evidence, like that produced by Barclays UK economist Fabrice Montagne, who says there has been “quite a jump” in retail spending since restrictions were lifted.

In the same vein, the latest IHS Markit survey of industrial purchasing managers showed that its index is above 50 points for the first time since February, a clear sign of confidence returning.

Contrary to many predictions, the housing market has not collapsed.

Property prices are remarkably stable.

Nor have pubs closed at anything like the level expected, with the total number down just 228 in the first six months of the year to 40,835.

Just as unfounded has been the scaremongering over Brexit.

At the weekend the European Space Agency announced it is to build a new “space tech incubation unit” at Leicester, costing £100million, creating 2,500 jobs.

The reality is that we are in the middle of a unique recession, created by deliberate Government action to save lives.

The economy, fundamentally sound, was put into an artificially induced coma and is now being resuscitated.

But to ensure that the damage is neither permanent nor severe, drastic action is needed by both the public and by the Government.

Consumers can give an immediate boost to businesses by increasing their spending, particularly in the high street.

Because of lockdown, many people have made substantial savings over the past three months, as highlighted by the Office for National Statistics, which revealed that deposits by households into accounts rose by a record £25.6billion in May, after major increases of £16.7billion in April and £14.3billion in March.

Some of that cash should be deployed for the economic benefit of the county.

Retail therapy is a patriotic duty.

There is a lot of talk at present about “pent-up” consumer demand.

It is time to release it.

Nor is this a moment for caution or austerity by the Government.

Led by imaginative Chancellor Rishi Sunak, the fiscal response to the pandemic has so far been admirable, but now further steps are needed to reinforce the foundations of recovery.

Mr Sunak’s financial statement next week to the Commons would be the perfect opportunity to announce other measures to support enterprise, such as cuts in business rates and corporation tax or a rise in national insurance thresholds.

But even more vital is new expenditure on public services and the civic infrastructure.

Social care, schools, transport, policing and the NHS are all crying out for far-reaching improvements.

This week Boris Johnson wrapped himself in the mantle of President Franklin D Roosevelt’s famous New Deal that saved the USA in the 1930s.

But the Prime Minister’s pledge of an extra £5billion of investment was miniscule compared with the £664billion (in today’s money) that went on huge federal New Deal programmes.

The Government should embrace not just the words but also real ambitions of FDR.

“Act swiftly against the dark realities of the moment,” said President Roosevelt in 1933.

That is exactly the spirit we need today.