More than two hundred students and professionals packed the lecture theatre in the Rose Bowl to hear Will provide an articulate exposition of the state of the UK economy. The following are five messages taken from the lecture:
- The growth capacity of the economy is now lower than in the past - whilst unemployment is at a 40-year low, vacancy rate is at a record high.
- Consumers are subdued –UK quarterly growth has been slowing, real income growth has been under pressure (but with some reasons for optimism) and the housing market is cooling (particularly in London).
- Businesses are wary – almost four in ten are adopting defensive business strategies according to a Deloitte survey - cutting costs and putting off decisions to invest in growth. Brexit has become the top source of uncertainly for one in five businesses.
- Gradual and limited tightening in monetary policy – Bank interest rate is still very low, inflation is set to fall to 2% target.
- UK banking system is resilient – even after some capital is used up in the Bank of England’s stress test, banks would still have twice as much capital when compared with 2007.