That is the Labour party’s point of view. While the Conservatives in government want us to believe they have turned the economy around, Her Majesty’s Official Opposition wants to convince us of… well, the opposite.
They say it’s an unsustainable recovery led by consumer spending, on the back of artificially inflated house values and record-low interest rates on borrowing.
But even if that is true, what does it mean for marketers? One thing it doesn’t mean is: stop spending so much on marketing.
Of course, a consumer-led recovery is exactly the right kind of recovery for marketers — it means consumers are looking to buy more, brands (hopefully) have a bit more cash to throw around and marketing becomes a key vehicle for ensuring your company takes full advantage of the upturn.
But a note of caution: marketing alone can’t keep consumer spending going. It also emerged today that the Bank of England is about to subject the UK’s banks to a ‘stress test’ to ensure they could survive a sudden change in the economic weather — if, for example, interest rates leapt to 4 per cent and house prices crashed by 35 per cent.
While that’s a worst-case scenario rather a forecast — and an unprecedented one at that — it’s still chastening to imagine it. And while those figures are outlandish, interest rates will undoubtedly have to rise gradually in the next year or two. The rising cost of repayments on mortgages, credit cards and corporate borrowing will also inevitably rein in spending.
But, again, if that is true, what does it mean for marketers? There’s little sense in cutting back marketing now, or even adjusting the message, for a hypothetical scenario that’s probably over a year away. In that sense, then, you can probably ignore the data — for now.
As always, though, you can never stop planning. And for marketers, the key decisions will come when the squeeze is put back on. So plan now how you’ll make the case that, if growth and spending level off, marketing is your company’s crucial tool for cutting through in a more competitive environment.