Seeing London through a Global Financial Prism

Spending time in London with overseas visitors is to see the UK’s capital through different eyes. When those eyes belong to insolvency practitioners from all over the world, the risk is that the view will inevitably be jaundiced, especially when these vampires of the recession start comparing their countries’ financial woes and the incompetence of their political leaders.

If you then expose your visitors to the varied delights of a celebrity chef restaurant, a jazz club now grown seedy as London’s premier speed dating pick up joint and the quintessential Britishness of afternoon tea at Fortnum & Mason, you can begin to get some interesting feedback about the mood of these troubled economic times. The final ingredients in this global opinion soufflé were a walk down Oxford Street on a Saturday morning, turning down New Bond Street and eventually through Burlington Arcade.

Almost everywhere seemed busy to our gallant band of business tourists, with the Paris contingent wondering why all of France seemed to be intent on boosting our flagging retail sales with their fistfuls of euros. The man from Beirut commented that some streets in the West End were dirtier than at home and the pavements more dangerous to walk, a judgement enthusiastically supported by the group from Delhi, surely a wakeup call for all who care about London’s image ahead of next year’s Olympics.

Gradually, some consensus emerged. A cynical restructuring expert from New York asked why we Europeans were so obsessed with the parlous state of our economies, when the situation in the US was little better, especially in the real estate market there. He suggested whatever we might think about the fragility of our banks and the scale of their capital requirements, at least on the whole we are no longer extending and pretending unlike the fiction still rampant in his financial sector.

The view from Budapest was equally scathing. Why all the focus on the troubles of Southern Europe, when much of Central and Eastern Europe was drowning in utterly unsustainable foreign currency denominated mortgages, while discredited politicians tried to keep the lid on smouldering social unrest about soaring prices and savage unemployment levels.

There was more talk of social issues, this time from a Chinese perspective as rampant inflation overwhelms the benefits of the years of runaway growth and middle class development and the authorities in Beijing struggle to rebalance the economy towards domestic consumption and away from exports to flat-lining developed economies.

Our Austrian born German delegate complained about being the bailers-out of last resort for the whole Eurozone, even as their export led economy falters in the face of the latest global slowdown. They know that the collapse of the euro and the re-establishment of a strong deutschmark, or “heavy” euro would be a financial disaster, but try telling that to politicians facing elections next year.

Almost the only ray of sunshine came from Malta, where the economy is in good shape, the banks are largely untroubled and there is much lip-smacking anticipation of the benefits to come from exploiting their traditionally strong commercial links with the newly liberated Libya.

Our group of happy cynics said their goodbyes and scattered to the four corners of the globe, cases bulging with over-priced but heavily-discounted gifts, most of them produced almost anywhere but in the UK. What they wondered, would the world economy look like next Spring, when they are due to meet again in Salzburg? Even the clearest of crystal balls might struggle to offer any sort of reliable answer to that conundrum.