Consumer confidence up? Sorry, it's not

And here's why . . .

Many newspapers are carrying the story that the GFK NOP consumer confidence improved between August and September, although apparently not significantly so. It seems that UK consumers became more optimistic about the economic outlook and spending; GFK NOP apparently reported that their index of sentiment gained 1 point from August to minus 30. Sorry, it didn't.

This presents data watchers like this correspondent with a puzzle, because, on the same day, the EU Commission reported the results of the same survey. (Note that the GFK conducts the survey for the EU, which pays for it.) And the answers are completely different.

This is where the puzzle really starts, because on its website yesterday, the commission argued that the survey of consumer confidence, using the same data actually fell in September, to its lowest level since April. You can take a look here and even download the data as an Excel file across all the EU countries here.

 

A decline does seem rather more likely than a rise, given that answers to seven questions show that confidence worsened between August and September. So surely it's going to be pretty hard to get the survey to improve?

The EU calculates its index as (Q2+Q4-Q7+Q11)/4. Note, of course, that a higher number to Question 7 is bad. So consumer confidence fell between August and September from -20 to -22. It looks pretty hard to get a positive from 12 numbers when seven of them worsen and two show no change.

Also the overall index that the EU publishes, which is a combination of business and consumer confidence, worsened sharply to 89.5, down from 92.9, which is its lowest level since September 2009.

Up or down? Which is it? GFK and the EU had better sort this one out. It makes little sense to produce estimates that go in different directions from the same bloody survey. It looks very much to me that consumer confidence worsened in September, not improved. Somebody at GFK has a bit of explaining to do!

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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The problems with ending encryption to fight terrorism

Forcing tech firms to create a "backdoor" to access messages would be a gift to cyber-hackers.

The UK has endured its worst terrorist atrocity since 7 July 2005 and the threat level has been raised to "critical" for the first time in a decade. Though election campaigning has been suspended, the debate over potential new powers has already begun.

Today's Sun reports that the Conservatives will seek to force technology companies to hand over encrypted messages to the police and security services. The new Technical Capability Notices were proposed by Amber Rudd following the Westminster terrorist attack and a month-long consultation closed last week. A Tory minister told the Sun: "We will do this as soon as we can after the election, as long as we get back in. The level of threat clearly proves there is no more time to waste now. The social media companies have been laughing in our faces for too long."

Put that way, the plan sounds reasonable (orders would be approved by the home secretary and a senior judge). But there are irrefutable problems. Encryption means tech firms such as WhatsApp and Apple can't simply "hand over" suspect messages - they can't access them at all. The technology is designed precisely so that conversations are genuinely private (unless a suspect's device is obtained or hacked into). Were companies to create an encryption "backdoor", as the government proposes, they would also create new opportunities for criminals and cyberhackers (as in the case of the recent NHS attack).

Ian Levy, the technical director of the National Cyber Security, told the New Statesman's Will Dunn earlier this year: "Nobody in this organisation or our parent organisation will ever ask for a 'back door' in a large-scale encryption system, because it's dumb."

But there is a more profound problem: once created, a technology cannot be uninvented. Should large tech firms end encryption, terrorists will merely turn to other, lesser-known platforms. The only means of barring UK citizens from using the service would be a Chinese-style "great firewall", cutting Britain off from the rest of the internet. In 2015, before entering the cabinet, Brexit Secretary David Davis warned of ending encryption: "Such a move would have had devastating consequences for all financial transactions and online commerce, not to mention the security of all personal data. Its consequences for the City do not bear thinking about."

Labour's manifesto pledged to "provide our security agencies with the resources and the powers they need to protect our country and keep us all safe." But added: "We will also ensure that such powers do not weaken our individual rights or civil liberties". The Liberal Democrats have vowed to "oppose Conservative attempts to undermine encryption."

But with a large Conservative majority inevitable, according to polls, ministers will be confident of winning parliamentary support for the plan. Only a rebellion led by Davis-esque liberals is likely to stop them.

George Eaton is political editor of the New Statesman.

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