Starbucks tells it straight - British Government in denial

British Trade Minister, Lord Mandelson, doesn't like the truth when it comes to the British Economy after 12 years of Labour government. He certainly didn't like what Starbucks' CEO, Howard Schultz had to say on CNBC:

"The place that concerns us the most is western Europe, and specifically the UK. The UK is in a spiral...Unemployment, the sub-prime mortgage crisis, particularly in the UK, and I think consumer confidence, particularly in the UK, is very, very poor."

Mandelson's response was impolite, to say the least. However, a look at today's economic data suggests that it may be time to ask Howard Schultz to take over the reigns of running the British Economy - at least he recognises the problems which Lord Mandelson seems so deny:

• Government borrowing set to overshoot November's projected £77bn, already a record.
• Zavvi, Britain's largest independent entertainment retailer which combines the renowned Virgin Megastore and Ourprice groups is to close all its remaining stores, having failed to attract a buyer after two months in administration.
• JJB Sports' administrators are closing almost all of its Qube stores and most of its OSC shoe shops. Analysts doubt that a buyer will even be found for the remaining 32 outlets.
  
• Stylo's 220 Barrets and Priceless shoe retailing chains are also closing, with 2,500 job losses. A further 165 stores and 3,000 jobs have be saved by a management buy-out.
  

Meanwhile, the government is mired in more and more scandals. Home Secretary, Jacqui Smith, is now under investigation for embezzling £115,000 taxpayers' money by claiming that her main home is her sister's spare room, and charging the taxpayer for the cost of her mortgage on her constituency home! Not to be outdone, the Chancellor of the Exchequer, Alistair Darling, is under fire for claiming his second home allowance to pay for his mortgage in Edinburgh - even though he is provided with a grace and favour home at 11 Downing Street, courtesy of the taxpayer. Finally, the appropriately-titled Paymaster General (and Minister for the Olympics), Tessa Jowell's husband has been imprisoned for taking US$600,000 in bribes from the Italian Prime Minister Silvio Berlusconi, in return for which he lied during corruption trials.

Apparently, none sees fit to resign or faces the sack. Thankfully, Smith and Darling both represent highly marginal constituencies (Redditch and Edinburgh SW respectively), which they look set to lose at next year's election, especially given the recent opinion polls giving the Conservatives a 20% lead.