The media was ‘in a sense complicit’ in talking up an economic boom in a bid to make the most of the lucrative property advertising market, BBC business editor Robert Peston has said.
Speaking at the Society of Editors conference this afternoon, Peston said TV home improvement programmes and newspaper property supplements encouraged the public to take advantage of cheap debt.
Peston also said there was a “knowledge gap” among some business journalists, who he felt were not equipped to make sense of the global economic downturn.
“Most business journalists are obsessed with stock markets, they’re obsessed with equities,” he said. “The world is driven far more by what goes on in the debt markets. We need to think about the knowledge that resides within our organisations.
“There was a knowledge gap. Some journalists were ill-equipped to assess some of the information. It is very hard for journalists to say the consensus is wrong.”
Peston said pictures of queues outside Northern Rock last summer after he broke the story that it was seeking emergency help from the Bank of England were caused because the bank had an average of 23,000 savings accounts registered to each branch.
“People felt worried that they couldn’t find out what was going on. In a very basic sense, the run was triggered by a failure by Northern Rock to plan for a disaster,” Peston said.
“I’m not remotely trying to argue that the media has no influence but the notion that it was a scare brought about by the BBC or newspaper coverage is simply wrong.
“Those who criticise the media are broadly saying it’s alright for the City to know what is going on but the populus can’t handle it.”
But he added: “I don’t think this is any reason for us to be self-satisfied or complacent. I do think the media in general were in a sense complicit in this canard that somehow house prices can only ever rise.”
Peston revealed that he saw the crash coming before the credit crunch began in August 2007 – but said he felt unable to go public with it.
He said: “I would have these conversations with editors and say: ‘This is all looking really quite scary, there’s going to be a crash and it’s going to be bad for all of us’. But if I’d gone on the 10 o’clock news I would have been accused of being terribly alarmist.”
He added: “One of the things I regret is that I didn’t shout loud enough about it.”