He's the voice of the crash, but the words are all his own

Spectator, The, Nov 8, 2008 by Midgley, Dominic

'I can't condition my broadcasts on whether or not a share price is going to move up or down. If people want to think, "Well, whose interest does this serve?" and therefore it must have come from x and y, they can do that. But my experience of journalism and my experience of life is that there are many more cock-ups than there are conspiracies and usually when people look for conspiracies -- certainly in this case -- they turn out to be wrong.' Peston's prediction in his book that the oversupply of cheap credit, the marketing of bonds made up of toxic subprime mortgages, and the hands-off approach of the government and regulatory authorities would all end in tears has come to pass -- but he is less sure of what will happen next. 'We don't yet know how bad it's going to get for the real economy, ' he says. 'We don't know how much our economy will contract by and we don't know when the bounce will come.

'All I will say is, I think we've all got to prepare for it being a tough period of months, probably years. Because the other problem is, even when we've reached the bottom, even when the economy turns, we have borrowed too much.

'If you put together corporate debt, personal debt and government debt, you're at something like 300 per cent of GDP here, and in the States there are very similar levels of debt. We have got to pay that off and because we've got to pay it off there will be less money available in the upturn.' He approves of the government's decision to guarantee the deposits of the socalled 'rate tarts' who put their savings into Icelandic banks -- on the grounds that if it hadn't, it might well have precipitated a run on domestic banks. 'In normal times, of course, you don't want to bail out people who put their money into banks they've never heard of before, simply because they were paying an extra 1 per cent interest, ' he says. 'What you want is people to learn that they've got to think about the risks involved when they're putting their money around. I think one of the things the current crisis has shown us is how naive quite intelligent people are about what to do with their money.' In order to help make sure that we are better equipped as a nation to prevent all this happening again, one thing he would like to see is more business education in schools.

'I went to school in the 1970s. I don't think we had a single five-minute chat with any teacher about how bank accounts worked, let alone anything to do with the stock market. There are attempts at the moment to improve financial knowledge among schoolchildren but it's still pretty basic stuff.' You know Ed Balls (the schools minister and an ex-FT colleague and friend), I say, you can tell him directly. 'Yes, better lecture Ed, ' he laughs.