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Gloomy rhetoric and the psychology of business owners

ended 24. October 2024

Keen to get your views on how the language of senior politicians can affect the sentiment of business owners and, in turn, the real economy. For example, this morning, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said: “Business activity growth slumped to its lowest for nearly a year in October as gloomy government rhetoric and uncertainty ahead of the Budget has dampened business confidence and spending." Should the Government pay more attention to the language they use as it can become a self-defeating spiral? And do leaks ahead of the Budget, which can create additional uncertainty, further undermine sentiment? Any thoughts on how political language and leaks can undermine the economy, and whether Labour have been naive in the extent of their gloomy rhetoric, send them across ASAP. This is for a national news website.

3 responses from the Newspage community

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Editor
Wes Wilkes
CEO at IronMarket Wealth
Politicians have no idea on the impact their mindless, point scoring rhetoric has on business owners and individuals.
There has been a cacophony of pre budget warning from government and associated experts that has fuelled a worry filled splurge of activity across sectors and sizes in order to avoid some of the pain that we are being told is coming without any guide as to its quantum.
Politicians for budgets, like central bankers for rate decisions should keep quite and do the work! Uncertainty and threat is the way more damaging than anythign they actually end up delivering.
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Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As Labour returns to the corridors of power, they have been quickly reminded that in economics, words are not just words, they are catalysts that can either ignite growth and fuel confidence or fan the flames of uncertainty and pessimism. The government’s near fanatical use of pessimistic rhetoric over the last few months, particularly in the context of its economic policies, has sparked a debate about whether this is naivety or strategy. However, despite this approach potentially being used to underscore the challenges inherited from the previous government and to rally support for necessary fiscal reforms. The current extreme negativity risks inadvertently creating a self-defeating cycle where negative sentiment permeates into economic performance. Furthermore, in the context of the budget, leaks can create additional uncertainty, prompting businesses to delay investment decisions until more clarity is provided, stifling economic growth and innovation at a crucial juncture.
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Dr Felicity Baker
Co-Founder/ Clinical Psychologist at Ultimate Resilience Ltd
As both a clinical psychologist and business owner, I have experienced first-hand the detrimental impact of the negative rhetoric on my clients’ mood and confidence. In simple terms, the more we are fed negative messages, the more they tap into our own worst fears and the more anxious we become. Combine this with the additional uncertainty surrounding leaks ahead of the budget, people start creating their own often negative stories about what will happen, tapping into worst case scenarios that raise anxiety further. In my clinical practice working with business leaders’ I’ve seen anxiety levels skyrocketing in the last few weeks, with several of my clients experiencing sleepless nights over the potential impact of the budget on their bottom line. Even my accountant, who is usually very sanguine has admitted to raised anxiety ahead of this budget given the leaks and negative rhetoric that has preceded it.