The Great Debate UK
- Steve Radley is Director of Policy at EEF, Britain’s manufacturers’ organisation. The views expressed are his own.
This week the index of manufacturing activity in the UK moved into growth territory for the first time in more than a year. While that does not necessarily mean that the recession is over, it does suggest that we should be thinking a bit more about what sort of recovery we are likely to see and how well placed the UK is to meet it.
A common assumption is that a UK recovery will be export-led, taking advantage of a cheaper pound and the large stimulus packages which are likely to lift overseas markets such as China and United States out of the global recession faster than in this country. Looking longer-term, shared global challenges such as security, ageing populations and slowing climate change and adapting to it will create major opportunities for UK companies, particularly in manufacturing.
This raises questions as to how well equipped we are to take advantage of these opportunities. On the positive side, UK manufacturing has become much competitive in recent years with productivity gains outstripping most of our major competitors. A greater focus on innovation, design, niche products and service offerings has helped UK firms shift away from competing on price terns with lower wage cost countries. At the same time, though, we have been slow to take advantage of growth opportunities. Other European countries have made faster inroads into rapidly expanding Asian markets, while nations such as Germany, Denmark and Spain have stolen a march on us in the onshore wind industry, despite the substantial advantages our physical geography provides us.
- Peter Dixon is a guest columnist, the views expressed are his own. He is global financial economist at Commerzbank -
The popular image of economists is one of pointy-headed analysts, poring over data and running models in order to make predictions about the future which will invariably prove to be wrong.
Investors like simple narratives, which is why markets swing erratically and illogically between extremes of hope and fear. Reality is more complex. As F. Scott Fitzgerald remarked “the true test of a first-rate mind is the ability to hold two contradictory ideas at the same time”.
from The Great Debate:
The recession will soon be dead, laid to rest alongside the idea of the "Great Moderation", a set of hopeful assumptions that underpins expectations about economic growth and asset valuations.
This, when investors, bankers and executives ultimately realise it will cause them to pull in their horns, take less risks and be less willing to pay high prices for assets.
from The Great Debate:
Even without a huge fiscal boost or a hell-for-leather central bank, Europe could have a recovery, albeit a tepid one, on the cards by the end of the year.
Recent forward looking economic data is still grim, but hides within it the seeds of a rebound, as the absolutely brutal fall in manufacturing over the past six months burns itself out.
–Gerard Lyons is chief economist at Standard Chartered. Any opinions expressed are his own. –
Britain is clearly a Jekyll and Hyde economy. Or that at least is what the Chancellor would like us to believe. The bad news we are now seeing in the economy, public finances and across parts of the financial sector will not last. We are in the Mr Hyde phase. But, don’t worry, we will soon be back to the normal Dr Jekyll soon.
– David Kuo is a director at the financial Web site The Motley Fool. The views expressed are his own. –
The 2009 Budget could be the toughest that any Chancellor will ever have to produce. There is a gaping hole in the country’s finances. Alistair Darling, as custodian of the country’s cheque book, has to find a way to plug it. Not bridge it, not tiptoe around it, not spin across it, but to close it before it gets bigger.
– Neil Collins is a Reuters columnist. The opinions expressed are his own –
Quantitative easing is like drinking. Nothing much seems to happen at first, so you take a little more. As the warm alcoholic glow spreads over you, it feels pretty good, and surely another glass will make you feel even better. Stop soon enough, before you start feeling woozy, and there are no ill effects. Go on until you can’t stand, and the effects can be disastrous.
from The Great Debate:
- Jorge Maia is head of Research and Information for Industrial Development Corporation of South Africa, established in 1940 to promote economic growth and industrial development. The opinions expressed are his own -
Serious shockwaves are hitting Africa's shores as the global economic crisis unfolds.