Showing posts with label Bank Of England. Show all posts
Showing posts with label Bank Of England. Show all posts

Friday, 8 May 2020

We’ve got so much to be thankful for

The contrasts couldn’t be greater. 75 years ago, thousands of people thronged into central London and other cities, towns and villages to wave flags and, crammed together, sang, danced and embraced. Today there will be none of that. Not for want of celebrating 75 years since victory in Europe was declared, but because we can’t. Save for a few patriotic neighbourhoods who rarely need an excuse to get out the bunting and have a street party, the lockdown has muted, somewhat, the VE Day commemorations.

But before anyone carps, some perspective. Yes, it’s a drag that we can’t celebrate en masse; yes, it’s frustrating that there is a stilted atmosphere to the day that not even a Red Arrows flypast will lift. For some of us, there is little change on the horizon from being confined to base and in some cases of extreme medical risk, confined to quarters with clinical shielding applied. But whatever inconvenience and even financial hardships COVID-19 is bringing - and an existential threat that this represents - 8 May, 1945 should put it into some perspective.

450,000 Britons lost their lives in World War Two, including those fighting in Europe, Africa and the Pacific theatres, as well as those on the home front, enduring almost six years of the Luftwaffe’s bombs and Hitler’s V rockets. When the war formally ended after the Japanese surrender in August 1945, the financial sacrifice made by Britain in its defence of liberty had been enormous. Even taking into account the material support that came the UK’s way from the United States, Britain was financially crippled. Post-war national debt peaked in the late 1940s to more than 230% of GDP. 

The hardships of wartime rationing on the home front were met by conscripts returning from the war to face unprecedented difficulties that pale into insignificance even when compared to the bleak outlook we face today. Indeed, in 1945, it would be many, many years before the hardships receded, with rationing continuing well into the 1950s. Out of that period, however, emerged the National Health Service, the very institution we now stand on our doorsteps applauding every Thursday evening. The period after the war also produced the longest - and continued - era of global peace and, eventually, prosperity. Organisations like the UN came about. You could even argue that NATO was created to provide a potent buffer to any renewed military ambition from the east. While some of that - particularly the prosperity - may have been arrested by the coronavirus, the optimist must conclude that we will not be in lockdown forever. A recession, predicted to be the worst in 300 years by the Bank of England, may be over faster than any in living memory (though the scars will take longer to heal).

I guess I’m saying that we may still be at the 1941 stage of this pandemic, with no end in sight and an attrition rate ruthlessly keeping us at home (even if the trend is downward, deaths are still equivalent to at least one loaded jumbo jet crashing every single day...). But we have to believe that the summer of 1945 will be here soon. Optimism, even if it was fuelled by a cocktail of patriotic fervour and government propaganda, kept the country going during the Second World War. Today we celebrate and commemorate the incredible suffering of everyone who lived through and fought in that conflict. I think of my own parents (especially my dad who probably only missed a call-up by a couple of years) as teenagers, denied all of the freedoms today’s teens still enjoy, even in the current circumstances. I think of the D-Day soldiers who never made it to the Normandy shore, the Lancaster bomber crews who had a one-in-three chance of coming home alive, and the sailors on Atlantic convoys risking all to bring in vital supplies. And I think of everyone back home who went to work, took on factory jobs and literally put their backs into keeping the country alive. It may sound trite, but we really do have so much to be thankful for.

I have lived in the Netherlands and in France, and have always found fascinating their attitudes to the war. The Dutch, in particular, have two events to commemorate their occupation by the Nazis, and the unfathomable suffering they were subjected to (just look at their war in late 1944 when the Allies were supposedly moving through occupied Europe, and yet the Dutch were being effectively starved to death as the last front of rearguard German defiance). On 4 May, the Netherlands holds its herdenking day (remembrance of the dead), a very sombre commemoration of people who’ve died in all conflicts, including the 70% of the pre-war Dutch Jewish population murdered by the Nazis). On 5 May, the Dutch celebrate Bevrijdingsdag - Liberation Day - a far more colourful and joyous occasion which, as the name suggests celebrates the end of the tyrannous occupation. These two days were always a reminder to me of what the UK escaped, even if that escape came at an incredible price. Life in wartime Britain was one of permanent darkness. Dad’s Army might caricature the stiffened upper lips of bucolic Warmington-on-Sea, but it rarely captured the extent of austerity, of making-do, of living, literally, off meagre rations. Now we’re past the initial madness of toilet paper shortages and tinned tomatoes going missing at least our supermarkets are stocked, Deliveroo will bring a family feast to the doorstep at the touch of an app, and with some obvious exceptions, we are comfortable. We have so much to be thankful for today.

Wednesday, 2 May 2018

Mood music

Picture: Philips

If there's one thing I know about music it's that it's there when I need it most: soothing on a Sunday morning, uplifting on a Saturday night, energising on my way to work and relaxing on my way home. Just yesterday I finally got around to playing my Record Store Day purchase of David Bowie's Welcome To The Blackout (Live London 1978), and hearing rich and previously unreleased arrangements of Heroes, TVC15, Ziggy Stardust and Alabama Song put me in an extraordinary soak of good humour.

Several years ago, when I was working at Philips, we collaborated with the Canadian neuroscientist Daniel Levitin in a PR exercise to tie together the findings of his book, This Is Your Brain on Music - a deep examination of how we humans relate to music - with our personal audio products, used by gym bunnies in their endorphin-generating, natural high-producing workouts.

Levitin's book outlined how elements of music - timbre, rhythm, pitch, harmonies and so on - influenced neural function, neurochemistry and even cognitive psychology. Music, Levitin revealed, has a profound effect on cognitive, emotional and even physical health, and from an early age, too: the auditory system of a human fetus is fully functional after just 20 weeks and year-old infants will respond to the music they’d been exposed to while still in the womb. At the other end of life, Levitin wrote, music had a beneficial part to play in the care of Alzheimer’s patients, helping them connect with the depths of their ravaged memories. Music therapy has indeed been a well known practice for almost 60 years, dating back to 1959 when American composer Paul Nordoff and special needs teacher Clive Robbins started the work that would later lead to the Nordoff-Robbins charity and the incredible work it does in helping children and adults (such as stroke victims) with cognitive skill development.

Picture: Bank of England
So, knowing that music has a profound effect on mood, what about its effect on the economy? In a speech published earlier this week by Andy Haldane (left), the very forward-thinking chief economist of the Bank of England, he outlined the role of so-called 'Big Data' in providing semantic insight into human behaviour and how, in good times and bad, that might influence the economy. "Capturing people’s true sentiments and preferences is devilishly difficult," Haldane revealed, saying that "non-traditional" methods of opening up the consumer's mood were under examination.

"To give one recent example, data on music downloads from Spotify has been used, in tandem with semantic search techniques applied to the words of songs, to provide an indicator of people's sentiment. Intriguingly, the resulting index of sentiment does at least as well in tracking consumer spending as the Michigan survey of consumer confidence," a reference to a study which interpreted key themes from lyrics in songs in the Billboard Top 100 in the US and how their popularity corresponded rises and falls on market indices like the Nasdaq, Dow Jones and the S&P 500. The study, called The Rhythm of Markets, found that even a 1% increase in the frequency of the word "anticipation" led to a 0.444% drop in the Nasdaq.

Haldane also suggested that music might not be alone: "People’s tastes in books, TV and radio may also offer a window on their soul," he said, adding that gaming , in particular, might also be useful, since some games providing virtual environments that made observing behaviour easier than in the real world. Multiplayer online games and the fantasy World of Warcraft already had "primitive" economies that economists were studying, Haldane said, adding that such games could facilitate the study of player reactions to policy intervention on monetary and regulatory issues.

Quite how all this will have a defining impact on fiscal policies remains to be seen. I'm sure Mr. Haldane's need to be tapped into every vital sign affecting economic mood gives credence to mining Spotify download statistics to see what its subscribers might be feeling, given the sometimes impulsive nature of plugging into the platform to satisfy a particular musical craving. But as someone who still prefers physical music formats (and the purchasing of it) to lift my mood, the only fiscal correlation I can draw from the mood created by musical habits is that my disposable income will be significantly less in the days and weeks immediately after Record Store Day, or when there's a decent-sized box set on the way.

Picture: Spotify