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UK should look east to build confidence

Microscope contributor

 

With the financial markets getting jittery again, there are no immediate signs that things will settle down, and to some extent, the US is to blame.

 

The Federal Reserve is showing its desperation by cutting interest rates in a bid to shore up a failing economy, which only has the effect of undermining what little confidence was left. Of course, all of that uncertainty blows across the Atlantic and everyone starts to wonder when things will take a similar turn here.

 

Night after night, some of the greatest and most self-opinionated economic minds can be seen talking on television trying to work out what the current uncertainty means for the UK.

 

The reality is that we are in a different situation from the US and those resellers with strong pipelines are continuing evidence that the channel has reasons to remain upbeat. There are many dealers that seem determined — and all credit to them — to talk up the market and the future of IT.

 

Things in the UK are different from the last time a recession hit and the technology sector is now embedded to such a degree that cuts are not the option they were when it performed a distinct and separate function. In addition, you have to have some faith that the Government and Bank of England will be able to stave off the worst.

 

Strip away the financial hyperbole and what has landed the US in this mess is in most cases pure and simple greed: investors and institutions trying to make money too quickly on the back of debts being generated by people who simply wanted to achieve the dream of buying their own home.

 

It is difficult to feel too sorry for a world where maverick traders can lose billions and taxpayers are drafted in to pay the bills.

 

It might be a good idea for Gordon Brown and his chancellor, Alistair Darling, to put some distance between the UK and US. Confidence is a fragile thing, but when Germany seems to be performing strongly again and the business optimism is all to the east of us, then maybe it makes sense to look in a different direction.


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