Britain's high street gloom was made in the City

The crisis on Britain's high streets is not a retailing crisis, it is a financial one, says Matthew Lynn. The City is stretching businesses to the point where they can no longer cope with any kind of adversity.

The headlines almost write themselves. As yet another high-street chain calls in the administrators or puts itself up for sale, the same story gets repeated over and over. The high street is in crisis. The internet is blowing away sales and profits. Cash-strapped consumers have stopped spending. Costs have spiralled out of control. The way things are going, soon all that will be left in your local shopping centre are a couple of charity shops and a bookmaker. It's a good tale, and easily understood. There is a problem, however. It is not really true.

The real story is far more interesting. This is not a retailing crisis, but a financial one. The City has loaded up far too much debt onto companies that can no longer support it. And if there is a question that should be asked, it is why they were allowed to get away with it.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.