4 The Sunday Times May 1, 2022
BUSINESS
was asked to provide squat
racks and power bags. “The
bags were used prior to that
by the England rugby world
cup-winning team [in 2003],”
said Coleman. Since their
launch, 30,000 of the bags
have been sent to Iraq and
Afghanistan for use by the UK
Armed Forces, he added.
A third of IndigoFitness’s
sales are now to the forces,
which helped it weather
lockdowns. The biggest
Covid-related challenges
were long delays in stock
shipped from China and
Canada, Coleman said. About
“50 to 60 per cent” of the
firm’s products are made at
its 2.5-acre site in Nuneaton,
Warwickshire.
Two container loads of
stock worth £150,000 were
also missing for months last
year after the cargo ship they
were on, the Ever Given, got
stuck in the Suez Canal.
Covid also brought
opportunities. Direct sales to
shoppers via the firm’s
website rose, as consumers
grew impatient with gyms
being shut.
Coleman said that one of
the best decisions he and his
three fellow directors had
made was not to take external
investment. They each own
25 per cent of the company.
“We’ve grown organically and
not taken investment... we
still control of our destiny.”R
ob Coleman was 17 and
halfway through an
early-morning shift on a
farm near Twycross in
Leicestershire when he
came a cropper on a quad
bike. After herding the cows
across the farm for milking,
he drove over a wire fence he
had left on the track. The
loose end flew up and
knocked him off his bike.
“I was unhurt but I found
myself lying on a dirt track,
seeing stars. I lay there
thinking, ‘Why am I doing
this?’ I finished my shift,
walked down to the army
careers office and said, ‘I
want to join.’ ”
But his brief spell in
agriculture later gave him the
idea for IndigoFitness —a
maker of gym equipment he
started after leaving the army
— which aimed to help gym-
goers gain “farmer’s
strength”. The company has
since expanded into design
and installation of gyms and
has fitted out spaces for
Premier League football clubsand Wasps, the rugby union
team. It counts the UK Armed
Forces as one of its biggest
clients, helping it beef up
sales from £4.2 million in
2020 to £7.6 million in 2021.
Coleman was in the Royal
Artillery for four years and
grew frustrated with what he
saw as an old-fashioned
approach to fitness. “I was
really fast — you need to be
able to run long distances
with weapons and weights
and stuff — but I wasn’t
particularly strong, and there
wasn’t a way that that could
be achieved in the army at
that time,” said Coleman.
While on leave in the early
1990s, he met Andy Turner at
a gym in the Midlands.
Turner was also interested in
starting a business making
gym equipment. Their
differentiator would be
designing weights and other
products to build actual
strength, rather than rippling
muscles for aesthetic reasons.
“The industry was driven
by multinational businesses
that were predominantly
developing... fixed
machines,” said Coleman.
“The problem... is that ifOur gym gear has seen a lot of action
you’re on a chest press...
there isn’t anywhere outside
the gym you do that.”
Exercise, he added, should
replicate “primal human
movements” such as squats
to improve core strength.
After “dabbling” for a few
years, making some gym
equipment for other brands,
Coleman and Turner started
Leisure Lines — later
rebranded as IndigoFitness —
in 1996. They received a grant
of £2,800 from the Prince’s
Trust charity to help launch
their first product — a squat
rack. “We were cutting pieces
of steel, drilling holes in them,
welding them, assembling
them,” said Coleman.
A tipping point came in
2006, when the firm caught
the eye of Aston Villa FC andHOW I MADE IT
ROB COLEMAN
MANAGING DIRECTOR OF INDIGOFITNESSHannah Prevett
Deputy editor, Times
Enterprise NetworkRob Coleman started out
making his own machinesIt became standard for governors to
give broadcast interviews after independ-
ence and after rate changes, and these
appeared to step up after Carney
replaced Lord Mervyn King in 2012.
At the European Central Bank, then
president Mario Draghi, who famously
said he would do “whatever it takes” to
keep the eurozone intact, was listed by
Forbes magazine in 2018 as the eighth
most powerful person in the world.
Otmar Issing, himself a former central
banker at the ECB, cautioned against his
peers letting the power get to their heads.
Describing them as “unelected techno-
crats”, he said: “Central banks seem to be
the saviour of the world... but this leads
to overestimation of their capabilities.”T
heir capabilities will certainly be
put to the test as inflation bites and a
confluence of events — the Ukraine
war straight after Covid — provide
arguably the greatest test yet. Kate
Barker, who sat on the Bank’s monetary
policy committee (MPC) for nine years
until 2010, said: “The four horsemen of
the apocalypse — they seem to have gal-
loped upon us. And that hasn’t really
been the case before.”
Central banks now have to weigh up if
a rate rise will stymie economies that are
already slowing down. “Do you control
inflation and know that growth is going to
go down? Or do you allow inflation to stay
high and keep growth?” asked Reid.
It could also highlight a tension
between central bankers and govern-
ments, as emerged after the financial cri-
sis. Brown, who was prime minister dur-
ing the crisis, revealed years later that he
felt the Bank of England under King had
left rates too high for too long, but he did
not intervene in its independence. King
was more outspoken at the time about
the need for fiscal restraint.
Now the risk is that rates will rise in the
teeth of a recession, which might ordinar-
ily have required a rate cut. “Independ-
ence will start to come under pressure in
the next few years if central bankers’
decisions on inflation impact the econ-
omy in a way that starts to impact politi-
cal life,” Reid said.
This is a topic that exercises David
Blanchflower, a member of the MPC in
the financial crisis, who is concerned that
the UK economy needs a rate cut, not a
rise. He sees inflation as being driven by
supply constraints caused by China’s
lockdown, rather than by demand from
customers pushing up prices.
“How is a rate rise going to do any-
thing?” he said
Yet others think the Bank has been too
slow to hike the cost of borrowing and
that it focused on stimulating the econ-
omy after the pandemic struck without
looking at the bigger picture. Sir Howard
Davies, who was deputy governor at the
time of independence in 1997, has said
that rates need to go up.
“It certainly seems that the central
banks were so preoccupied by respond-
ing to Covid that they neglected the
thought that pumping all this money into
the economy would, in the end, produce
a price reaction,” said Davies, whose
book The Chancellors will be published
later this month.
Now chairman of NatWest, he added:
“The tectonic plates are shifting. The
view that independent central banks
were absolutely terrific and you can
shovel anything in there [for them to sort
out] is starting to look a bit threadbare.”A
s the black, chauffeur-driven
Daimler swept out of the
Treasury, the men inside had
a secret. The limousine was
transporting officials from
the Bank of England, includ-
ing the governor, Eddie
George. Just days after
Labour swept into power in a
landslide election victory,
chancellor Gordon Brown had handed
him a power given to none of his 117 pre-
decessors: independence from the gov-
ernment in setting interest rates.
That was 25 years ago this week. Brown
wanted to win the confidence of financial
markets, which wondered whether a
Labour government could be trusted with
the country’s finances and would keep a
lid on inflation. When Brown announced
an interest rate rise that day, he was the
last politician in Britain to do so.
On Thursday, the 121st governor,
Andrew Bailey, is expected to announce a
quarter-point rise in rates, taking the cost
of borrowing up to 1 per cent — its highest
level since the 2008 financial crisis.
But after a quarter of a century in
which inflation has remained subdued at
an average of 2 per cent, investors are
now losing faith in the ability of central
banks around the world to tame prices,
which are rising at their fastest pace in 40
years. Inflation is expected to hit 8 per
cent this year, possibly even 10 per cent —
well above the 2 per cent target set by the
Treasury. Inflation in America has
already topped 8 per cent.
Mohamed El-Erian, the respected
bond investor who is now president of
Queens’ College, Cambridge, said: “Cen-
tral banks have been late in recognising
the inflation problems, and been late in
doing anything about it.” He said this was
particularly true of the Federal Reserve.
Markets are pricing in rate rises. In the
US, one closely watched gauge indicates
that the Fed funds rate will reach 3 per
cent by the end of the year, from 0.5 per
cent now. In Britain, where the Bank
moved faster than other central banks to
raise borrowing costs last December, the
markets are expecting rates to hit more
than 2 per cent by the end of 2022.
Acting now, some economists argue, is
crucial. Jim Reid, head of thematic
research at Deutsche Bank, said: “Mar-
kets just need to be shown that the Fed
will do what is necessary and not tolerate
prolonged inflation.”
It is a rude awakening for central bank-
ers, who have gained rock star status in
recent times for pumping in billions —They were stars in
past crises, says Jill
Treanor. But as
inflation bites,
markets are losing
faith in their power
The four
horsemen of
the apocalypse
seem to have
galloped upon us
Christine
Lagarde is facing
questions about
negative rates in
the eurozoneAndrew Bailey is
expected to
announce a
quarter-point rise
in rates this weekJerome Powell,
chairman of the
Fed, is also under
huge pressure
over inflation£895 billion in the case of the Bank — to
prop up economies during the banking
crisis, the near-implosion of the euro-
zone and the Covid-19 recessions.
Whereas the names of previous cen-
tral bankers would be largely unknown,
now they have become fixtures on news
bulletins for sweeping into action amid a
string of crises.
Their public outings have not always
been flattering. Mark Carney, Bailey’s
predecessor, was dubbed the “unreliable
boyfriend” over warnings of rate rises
that never came, while Bailey has been in
hot water for suggesting workers should
not ask for pay rises that might stoke
inflationary pressures.
Jerome Powell, chairman of the Fed, is
also under huge pressure over inflation.
He is expected to announce a rise in inter-
est rates on Wednesday — just as the
world’s biggest economy risks tipping
into recession. Last week, data showed
an unexpected 0.4 per cent contraction
in America’s gross domestic product in
the first quarter of the year — the first fall
in GDP since the Covid-induced slow-
down in the early part of 2020.
Christine Lagarde, head of the Euro-
pean Central Bank, is facing questions
about when the central bank for the euro-
zone will lift rates out of negative territory.T
he Fed was the first big central bank
to gain formal independence over
rates, which it started to have over-
sight of in 1913. President Harry Tru-
man was trying to fund the war in
Korea in 1951 and demanded that Fed
chairman Thomas McCabe cap borrow-
ing rates. McCabe refused and won the
battle of wills, whose result set a prece-
dent that is meant to last to this day.
It was put to the test in the early 1980s
when Fed chief Paul Volcker brutally
raised interest rates to 20 per cent when
inflation was running at 10 per cent. Infla-
tion was tamed but America was plunged
into recession.
Arguably the first rock star banker was
Alan Greenspan, whose tenure at the Fedbetween 1987 and 2006 was charted in a
book by Watergate journalist Bob Wood-
ward entitled Maestro. Yet, he had barely
left before his low-rate policies were cited
as laying the seeds for the banking crisis.
Independence infuriated President
Trump; he wanted Powell — who was
reappointed by his successor Joe Biden —
to cut rates, with tweets accusing him of
“no guts, no sense, no vision”.
In Britain, Eddie George was already a
public figure prior to independence day
in 1997 due to the “Ken and Eddie” show.
That was the audience each month with
then chancellor Ken Clarke, where the
duo set interest rates. The monthly sum-
mits had been brought in after Black
Wednesday in 1992, when the pound was
ejected from the European exchange rate
mechanism. The likely reality was that it
was more Ken’s show than Eddie’s.ILLUSTRATION: JAMES COWENIs the age
of central
banker
celebrities
over?
THE BIG THREE